In re Nortel Networks, Inc.

In re Nortel Networks, Inc., No. 09-10138 (KG) (Bankr. D. Del. Apr. 3, 2013). In Nortel Networks, the Bankruptcy Court held that a plain and unambiguous reading of a court-approved settlement agreement between entities involved in multi-jurisdictional insolvency proceedings (the “Nortel Entities”) concerning the allocation of sale proceeds did not compel arbitration. Ultimately, in interpreting a court-approved settlement concerning sale of certain Nortel assets, the Bankruptcy Court found that the bankruptcy courts had authority to resolve the dispute because (i) the use of the term “dispute resolvers” in connection with the resolution of disputes concerning the allocation of proceeds did not exhibit the intent of the parties to arbitrate and (ii) the agreement unambiguously stated that the parties agreed that the courts would retain jurisdiction to resolve allocation disputes. The Bankruptcy Court also noted that while it would be easier for it to abdicate its responsibility by sending the allocation issues to arbitration, practical and logistical difficulties are no reason for a court with jurisdiction and detailed knowledge of a case to abandon its authority.