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Business Organizations Keyed to Cox
Elf Atochem North American, Inc. v. Jaffari
Citation:
727 A.2d 286 (1999)Facts
The members of Malek LLC agreed in writing that any action against a member brought by a member must be submitted to arbitration in San Francisco. Elf initiated direct and derivative suits in Delaware against fellow member Jafari, alleging he had misappropriated funds and business opportunities of the LLC. Jafari moved to dismiss the suit on the ground that their agreement required disputes by a member to be submitted to an arbitrator in California. Elf replied that the agreement only referred to suits by a member. He further argued that since the derivative suit was on behalf of the LLC, the suit was outside the choice of forum and agreement to arbitrate.
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