In Driven Intermediate Holdings, Inc. v. Jimenez, C.A. No. 2024-0150-LWW (Del. Ch. Mar. 31, 2026), Vice Chancellor Will addressed a question that arises frequently in post-M&A purchase price adjustment disputes: when the parties submit their disagreement to an independent accountant, does that accountant act as an arbitrator or as an expert? The answer, as the Court explained, carries critical jurisdictional consequences — and here, it was outcome-determinative.

Background

Driven Intermediate Holdings, Inc. (“Driven”), a Virginia corporation and subsidiary of an e-discovery and litigation support provider, acquired all outstanding stock of a target company through a Stock Purchase and Exchange Agreement (“SPEA”) dated September 23, 2021, for $103 million. Oswaldo Jimenez, the target company’s former CEO, served as the Sellers’ Representative on behalf of all sellers under the SPEA.

The SPEA contained a standard post-closing purchase price adjustment mechanism. After closing, Driven delivered a Closing Statement calculating an adjustment of approximately $2.7 million in its favor. The sellers timely delivered a notice of disagreement, and after months of negotiation the parties resolved some items but remained at an impasse on three specific accounting matters. They engaged a partner from Deloitte Financial Advisory Services LLP as the contractually designated “Independent Accountant” to resolve the disputed issues.

Notably, Section 2.3(d) of the SPEA provided that the Independent Accountant “shall act as an arbitrator to calculate the components of the Closing Statement” and that all determinations would be “final and binding.” Deloitte issued its determination in February 2023, but the parties then disagreed over the baseline calculations to which the determination should be applied. Driven argued it was owed over $1.5 million and demanded release of the $1.5 million Adjustment Escrow Amount. The Sellers’ Representative disputed Driven’s math and argued the sellers were owed a balance instead. With the escrowed funds still undistributed, Driven filed suit in the Court of Chancery.

The Court’s Analysis: Expert vs. Arbitrator

Neither party raised the jurisdictional question — Vice Chancellor Will did so sua sponte, finding it a threshold issue that had to be resolved before reaching the cross-motions for summary judgment both sides had filed.

The Court examined whether the Independent Accountant acted as an arbitrator — which would give the Court of Chancery statutory jurisdiction under the Delaware Uniform Arbitration Act (“DUAA”) — or as an expert, which would not. As I have noted in prior posts, this distinction turns on the type and scope of authority delegated to the decision maker. An arbitrator has broad authority to decide all legal and factual issues necessary to resolve a controversy and award a remedy. An expert, by contrast, has limited authority to decide a specific factual dispute within her special expertise.

Although the SPEA used the word “arbitrator,” the Court found that the label was not controlling. Relying on the Court of Chancery’s decision in ArchKey Intermediate Holdings Inc. v. Mona, the Court looked past the terminology to the substance of the provision. The Independent Accountant’s authority was limited to calculating components of the Closing Statement and resolving only the three specific accounting disputes submitted by the parties. The Independent Accountant herself recognized this limitation, declining to analyze the parties’ broader pre-submission agreements. The Court concluded that the provision bore the hallmarks of a “run-of-the-mill Accountant True-Up Mechanism” — an expert determination, not an arbitration — and that the DUAA therefore did not apply.

No Equitable Jurisdiction Either

The Court then considered whether Driven’s claim for specific performance — compelling the Sellers’ Representative to execute instructions directing the escrow agent to release funds — could independently support equitable jurisdiction. Vice Chancellor Will concluded it could not. The governing escrow agreement provided that funds would be released upon receipt of a final order from any court of competent jurisdiction, giving Driven a complete and adequate remedy at law. The Court also noted that a related action between the same parties — involving fraud and breach of representation claims under the same SPEA — was already pending before the Superior Court’s Complex Commercial Litigation Division, and that dismissal would serve judicial efficiency by allowing consolidation before a single court.

Accordingly, the Court dismissed the entire action sua sponte without prejudice, with leave to transfer to the Superior Court.

Key Takeaways

This decision is a sharp reminder for dealmakers and M&A litigators. The distinction between an independent accountant acting as an expert and one acting as an arbitrator has real jurisdictional consequences — and the label the parties use in the agreement is not dispositive. Here, the SPEA expressly called the Independent Accountant an “arbitrator,” yet the Court still classified the engagement as an expert determination because the scope of authority was limited to specific accounting calculations. Parties who want the benefit of the DUAA’s enforcement framework in the Court of Chancery should ensure their agreements vest the independent accountant with the broader adjudicative authority characteristic of true arbitration, not merely the power to resolve technical accounting disputes within defined parameters.