Judge rules Kalanick’s feud with investor will go to arbitration
SAN FRANCISCO: Travis Kalanick, the former chief executive of Uber, won a preliminary victory on Wednesday in his nasty legal clash with the venture capital firm trying to oust him from the ride-hailing company’s board when a judge ruled that the dispute should be moved to arbitration for now.
The decision, by judge Samuel Glasscock III of Delaware Chancery Court, was the first in a high-profile case brought this summer by the venture capital firm Benchmark, one of Uber’s earliest and largest shareholders. The ruling will enable Kalanick to shield some, if not all, of the squabble — and any potentially damaging disclosures — behind closed doors.
The judge declined to dismiss the complaint, instead sending it to an arbitrator to decide whether the full case should be handled in arbitration or moved partially back to court at a later date.
Benchmark lawyers, who had argued for trying the case in open court, said the company was willing to arbitrate parts of its complaint.
Glasscock said he was concerned that stockholders excluded from the arbitration process might still be able to seek legal recourse and said he would revisit the issue if any came forward.
In its suit, Benchmark has accused Kalanick of fraudulently obtaining control over board seats last year by withholding information about internal company operations.
The judge said there was “overwhelming evidence” that Uber’s voting agreement was drawn up intending to have an arbitrator weigh whether disputes should continue in arbitration, rather than taking controversies straight to court.
“Kalanick is pleased that the court has ruled in his favour and remains confident that he will prevail in the arbitration process,” a representative for Kalanick said.
“Benchmark’s false allegations are wholly without merit and have unnecessarily harmed Uber and its shareholders.”
A Benchmark spokesman said: “We look forward to presenting the facts as the case proceeds. This case is fundamentally a question of integrity and values, and the facts will fully support Benchmark’s position.” NYT