The plaintiffs sought an interlocutory injunction to prevent an arbitrator from hearing and deciding a challenge to his own jurisdiction until the court determined the plaintiffs' cross-motion to set aside the arbitration agreement.
The plaintiffs had sold two corporations to the defendant for $40 million under a share purchase agreement containing an arbitration clause.
After the transaction closed, disputes arose regarding alleged breaches of warranties and post-closing adjustments.
The plaintiffs subsequently commenced a court action and challenged the arbitrator's jurisdiction in the arbitration proceedings.
The court dismissed the motion for an injunction, finding that the plaintiffs failed to meet the first two prongs of the RJR-MacDonald test: there was no serious question to be tried, and no irreparable harm would result from allowing the arbitration to proceed.
