Richards Layton & Finger

Court Sanctions Forum Selection Arrangements and Confirms Power to Restrict Books and Records Inspections

March 2015

In United Technologies Corp. v. Treppel, the Delaware Supreme Court unanimously reversed the Court of Chancery’s ruling denying the defendant’s request to restrict the use of information obtained in plaintiff’s inspection of books and records to actions in the Delaware courts. The opinion sends a clear signal that the Delaware Supreme Court is in favor of forum selection bylaws, which have previously been upheld in the Court of Chancery, and that the Court of Chancery has broad power to limit the nature and scope of an inspection of books and records pursuant to Section 220 of the Delaware General Corporation Law (DGCL).