Mullen Automotive, Inc. v. GEM Global Yield LLC SCS

Background

Defendants GEM Global Yield LLC SCS, GEM Yield Bahamas Limited, and Christopher Brown asked the court to stay, or pause, the federal litigation while an arbitration between GEM and Mullen continued. The defendants’ letter stated that the arbitration involved the same financing agreements and issues raised in the complaint, including Mullen’s challenge to a warrant under Section 15(a) of the Securities Exchange Act. The letter also stated that the arbitrator had issued a partial final award on liability and that the damages and indemnification phase was pending.

The defendants argued that the Federal Arbitration Act required a stay because all claims in the federal action had been referred to arbitration. They also argued that Brown, whom Mullen allegedly identified as GEM’s founder and manager, could not be used to avoid the arbitration clause merely because he was not personally a party to the arbitration agreement.

Court’s Action

The court’s order did not decide whether to grant or deny the requested stay. It stated that the parties must be prepared to discuss their positions concerning the stay at the conference scheduled for March 21, 2024.

The court separately granted the parties’ applications to partially seal their letter submissions because of confidentiality provisions in the pending arbitration. It directed the clerk to maintain docket entries 26 and 35 under seal, viewable only by the parties and the court. It ordered Mullen to file a redacted version of its response letter and directed the clerk to terminate the pending motions at docket entries 25, 26, 27, and 34.

Disposition

Judge Katherine Polk Failla granted the applications to partially seal the submissions. The court did not rule on the defendants’ request to stay the litigation in this order.