WILMINGTON, Del. (Legal Newsline) - The Chemours Company couldn’t survive dismissal in its legal issue over a separation agreement with a company it was the subsidiary of previously.
Vice Chancellor Sam Glasscock of the Delaware Court of Chancery dismissed the case because of an arbitration provision on March 30.
The Chemours Company sued chemical plant du Pont de Nemours and Company (DuPont) shortly after becoming an independent company. At issue are the terms of the separation agreement that requires Chemours to indemnify DuPont for damage concerning historical environmental liabilities.
Chemours accused DuPont of misjudging its liabilities by a longshot, and now wants the court to restrict the indemnification requirements.
Judge Glasscock pointed to an arbitration clause in the separation agreement as the reason for the dismissal. Chemours attempted to escape the arbitration clause, claiming it didn’t agree to arbitration, but the court saw otherwise.
“The separation agreement – which contains the arbitration provisions in dispute – and any ‘dispute arising out of, in connection with or relating to’ the separation agreement is to be ‘governed by and construed in accordance with the laws of the state of Delaware,’” wrote Judge Glasscock.
Chemours argued that its vice president at the time, Nigel Pond, oversaw and signed the separation agreement, but that the company didn’t agree to arbitration because DuPont solely executed that part of the agreement. Chemours claims it didn’t have a chance to negotiate the arbitration clause or even hire a lawyer to help with the terms. But this didn’t persuade the court either.
“Chemours cannot show that it did not sent in the contractual sense required by the [Federal Arbitration Act],” wrote Judge Glasscock.
Chemours went as far as saying the agreement wasn’t really a contract, but simply a. mere document. The court pointed out that agreeing with this would infringe on the equal treatment clause in the FAA.