Tabula Rasa Healthcare Group, Inc. v. Mphasis Limited, India

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
LOREN MITCHELL LEONARD L. WILLIAMS JUSTICE CENTER
MAGISTRATE IN CHANCERY 500 N. KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19801-3734

August 8, 2025

Sidney S. Liebesman, Esquire Kelly A. Green, Esquire
Seth A. Niederman, Esquire Jason Z. Miller, Esquire
Fox Rothschild LLP Smith, Katzenstein & Jenkins LLP
1201 N. Market St., Suite 1200 1000 West Street, Suite 1501
Wilmington, DE 19801 Wilmington, DE 19801

RE: Tabula Rasa Healthcare Group, Inc., v. Mphasis Limited, India,
C.A. No. 2025-0020-LM

Dear Counsel:

The two motions pending before me, and addressed in turn within this letter,

are the defendants’ motion to dismiss and the plaintiff’s motion for preliminary

injunction to enjoin arbitration.1 The underlying breach of contract action has been

submitted to the American Arbitration Association (“AAA”). For the reasons that

follow, I must grant defendant’s motion to dismiss and deny the plaintiff’s motion

for preliminary injunction.

1
Defendants’ pending motion to maintain confidentiality designations will be addressed
separately.
C.A. No. 2025-0020-LM
August 8, 2025
Page 2 of 17

I. FACTUAL BACKGROUND2

Tabula Rasa HealthCare Group, Inc. (hereinafter, “Plaintiff”), is a Delaware

corporation with its principal place of business located in New Jersey. 3 Plaintiffs

brought the present action against Mphasis Corporation (hereinafter, “Mphasis

Corp”), a Delaware corporation, and Mphasis Limited, India (hereinafter, “Mphasis

Ltd.”), a foreign company, (collectively, “Defendants”) requesting that the Court

declare an arbitration clause as unenforceable and enjoin the parties from proceeding

to arbitration.4

A. The Agreements and Arbitration Clause

On August 30, 2021, the parties entered into the Master Services Agreement

(“MSA”).5 The Master Services Agreement Contains the following arbitration

clause:

If the dispute has not been settled within thirty (30) days following the
notice of the dispute, such dispute shall thereafter be finally settled
under the Rules of Arbitration of the International Chamber of
Commerce (if conducted outside the United States) or the American
Arbitration Association (if conducted inside the United States) by one

2
Citations to the Docket, and if needed, its exhibits are cited in the form of “D.I. __, Ex.
#”.
3
D.I. 1 at ¶4; D.I. 24 at 1.
4
D.I. 1 at ¶¶5–6; D.I. 24 at 1.
5
D.I. 1, Ex. B at 1.
C.A. No. 2025-0020-LM
August 8, 2025
Page 3 of 17

or more arbitrators appointed in accordance with the said Rules of
Arbitration. The Parties hereby renounce all recourse to litigation and
agree the award of the arbitrator shall be final and subject to no judicial
review. The prevailing party shall be entitled to reimbursement of all
costs related to such arbitration (including reasonable attorneys’ fees)
from the other Party.6

The MSA provides that “[a]ll substantive questions of law shall be determined under

the laws of Delaware without regard to its principles of conflict of laws. Any

arbitration will take place in that jurisdiction, or at such other place or in such other

manner as is mutually agreed by the Parties.”7 The MSA also includes language

directing severability of provisions within the contract (hereinafter, the “Severability

Clause”) stating that any invalid, illegal, or unenforceable provisions “shall be

treated as modified to the least extent necessary to rectify its invalidity, illegality or

unenforceability, and shall be enforced as so modified.”8

After executing the MSA, the parties then executed a Master Statement of

Work (hereinafter, “MSOW”) followed by several Statements of Work, one of

which (hereinafter, “SOW-2”) outlines Mphasis’ responsibilities in providing

6
D.I. 1, Ex. B at § 15.2.
7
Id. at § 15.3.
8
Id. at § 17.2.
C.A. No. 2025-0020-LM
August 8, 2025
Page 4 of 17

services supporting Tabula’s electronic health record business.9 The MSOW

incorporates the terms of the MSA such “that the [MSOW] and the [MSA] shall be

considered one, fully integrated document,” and “sets forth the broad project

overview, and other governing terms and conditions that will apply for each of the

individual SOWs … made pursuant to this MSOW.”10

B. Mphasis’ Alleges Breach of Contract and Issues Arbitration
Demand

Plaintiff alleges that the Defendants failed to fulfill their obligations within

the SOW-2.11 Plaintiff emailed a letter to the Defendants on October 11, 2024, giving

them written notice of their intention to terminate SOW-2.12 Defendants position is

that termination is improper under the MSA because, although the letter states it was

terminated for cause, it failed to set forth specific grounds for termination.13 On

November 14, 2024, Defendants filed an arbitration demand with the American

Arbitration Association (hereinafter, “AAA”) alleging multiple breaches of contract

claims against Tabula.14

9
D.I. 1, Ex. C; D.I. 1, Ex. D.
10
D.I. 1, Ex. C at 1.
11
D.I. 1 at ¶¶26–28.
12
D.I. 1, Ex. G; D.I. 1 at ¶ 29; D.I. 24 at 4.
13
D.I. 24 at 5.
14
D.I. 1 at ¶ 30; D.I. 24, Ex. 1 at 1.
C.A. No. 2025-0020-LM
August 8, 2025
Page 5 of 17

C. Procedural Posture

On January 7, 2025, the Plaintiff filed a complaint seeking declaratory

judgment to render the Arbitration Agreement as unenforceable and filed a motion

for preliminary injunction to enjoin arbitration from proceeding.15 On January 30,

2025, the Defendants moved to dismiss for lack of subject matter jurisdiction under

Court of Chancery Rule 12(b)(1).16 The parties joint briefing on the Defendants’

motion to dismiss and for the Plaintiff’s motion for preliminary injunction completed

on April 4, 2025.17 An oral argument was held on July 8, 2025 and afterward I took

these matters under advisement.18

II. ANALYSIS

“Delaware courts lack subject matter jurisdiction to resolve disputes that

litigants have contractually agreed to arbitrate.”19 “When addressing disputes

concerning contractual arbitration provisions, ‘this court turns first to the Delaware

15
D.I. 1.
16
D.I. 19.
17
D.I. 24; D.I. 30; D.I. 32.
18
D.I. 40.
19
NAMA Hldgs, LLC v. Related World Market Ctr., LLC, 922 A.2d 417, 429 (Del. Ch.
2007).
C.A. No. 2025-0020-LM
August 8, 2025
Page 6 of 17

Uniform Arbitration Act (the “DUAA”).’”20 The DUAA “incorporates the terms of

the Federal Arbitration Act unless the agreement at issue explicitly references the

Delaware Uniform Arbitration Act.”21 Here, the relevant agreements make no direct

reference to the DUAA; therefore the Federal Arbitration Act (the “FAA”) applies.22

“[C]ontractual arbitration clauses are generally interpreted broadly in

furtherance of [Delaware public policy favoring arbitration,]” and a motion to

dismiss for lack of subject matter jurisdiction under 12(b)(1) will be granted “if the

parties contracted to arbitrate the claims asserted[.]”23 Under the FAA, the Court,

“upon being satisfied that the issue involved in such suit or proceeding is referable

to arbitration … shall on application of one of the parties stay the trial of the action

until such arbitration has been had in accordance with the terms of the

agreement[.]”24 Plaintiff opposes the motion to dismiss for lack of subject matter

20
Erving v. ABG Intermediate Hldgs. 2, LLC, 2022 WL 17246320, at *3 (Del. Ch. Nov.
28, 2022) (quoting Innovation Inst., LLC v. St. Joseph Health Source, Inc., 2019 WL
4060351, at *4 (Del. Ch. Aug. 28, 2019)).
21
Meyers v. Quiz-Dia LLC, 2016 WL 7048783, at *2 (Del. Ch. Dec. 2, 2016) (citing 10
Del. C. §§5702 (a), (c)).
22
See D.I.1, Ex. B; D.I. 1, Ex, C; D.I. 1, Ex. D.
23
Glazer v. Alliance Beverage Distrib. Co., LLC, 2017 WL 822174, at *1 (Del. Ch. Mar.
2, 2017) (quoting Li v. Standard Fiber, LLC, 2013 WL 1286202, at *4 (Del. Ch. Mar. 28,
2013)).
24
9 U.S.C. § 3.
C.A. No. 2025-0020-LM
August 8, 2025
Page 7 of 17

jurisdiction by arguing the entirety of the arbitration clause is not valid and therefore

the delegation clause adopted therein is also unenforceable.25 For the reasons that

follow, I disagree and find that the Defendants are correct in their statement that the

Court lacks subject matter jurisdiction over issues of substantive arbitrability, and in

turn, the Plaintiff’s motion for preliminary injunction should be denied as moot.

A. The severability clause allows for the arbitration clause and the
delegation clause therein to be enforceable.

“[T]he existence of an arbitration agreement is a question for the Court[,]”26

but once the existence has been established the Court should explicitly leave

questions of substantive arbitrability to the arbitrator if it is also established that the

parties have clearly and explicitly agreed to arbitrate arbitrability.27 “The prospective

waiver doctrine in the arbitration context refers to a situation in which the parties

agree that, if disputes arise between them, then they waive the right to rely on federal

25
D.I. 30 at 4–10.
26
BuzzFeed Media Enters., Inc. v. Anderson, 2024 WL 2187054, at *13 (Del. Ch. May 15,
2024) (citing Field Intel. v. Xylem Dewatering Solutions Inc., 49 F.4th 351, 356–58 (3d
Cir. 2022); Dasher v. RBC Bank (USA), 745 F.3d 1111, 1116–17 (11th Cir. 2014)).
27
Henry Schein, Inc. v. Archer and White Sales, Inc., 586 U.S. 63, 69 (2019) (“[B]efore
referring a dispute to an arbitrator, the court determined whether a valid arbitration
agreement exists. But if a valid agreement exists and if the agreement delegates the
arbitrability issue to an arbitrator, a court may not decide the arbitrability issue.”); see also
Fairstead Capital Management LLC v. Blodgett, 288 A.3d 729, 753 (Del. Ch. Jan. 6, 2023)
(“[A] court must address issues of contract formation before deferring to an arbitrator to
resolve the who decides question under a delegation provision.”).
C.A. No. 2025-0020-LM
August 8, 2025
Page 8 of 17

law. The Supreme Court has observed that such waivers violate public policy.”28

“Under the severability principle, courts treat a challenge to the validity of an

arbitration agreement (or a delegation clause) separately from a challenge to the

validity of the entire contract to which it appears.”29

“A clear and unambiguous severability clause permits the Court to sever the

invalid language while enforcing the remainder of the agreement that does not

violate the law.”30 The severability of the terms of a contract “is purely a question of

the intent of the parties.”31 In the interpretation of the parties intent in reference to

the terms of a contract, “[a]bsent ambiguity[,]” priority is given “to the parties’

intentions as reflected in the four corners of the agreement, construing the agreement

as a whole and giving effect to all its provisions.”32

Here the Plaintiff challenges the validity of the agreement to arbitrate, thereby

issuing to the Court the task of determining the validity of the agreement to arbitrate

and the underlying delegation clause while not overstepping its bounds in any

28
Williams v. Medley Opp. Fund II, LP, 965 F.3d 229, 238 (3d Cir. 2020) (citing Am. Exp.
Co. v. Italian Colors Rest., 570 U.S. 228, 236 (2013)).
29
Chemours Co. v. DowDuPont Inc., 2020 WL 1527783, at *12 (Del. Ch. Mar. 30, 2020).
30
Wagner v. BRP Group, Inc., 316 A.3d 826, 861 (Del. Ch. May 28, 2024).
31
Tracy v. Franklin, 67 A.2d 56, 61 (Del. 1949).
32
Fairstead, 288 A.3d at 759 (quoting In re Viking Pump, Inc., 148 A.3d 633, 648 (Del.
2016)).
C.A. No. 2025-0020-LM
August 8, 2025
Page 9 of 17

substantive arbitrability determination.33 The arbitration clause contains a sentence

that operates to prospectively waive the parties’ statutory rights, specifically

prohibiting the ability to move to confirm or vacate an arbitration award upon the

completion of arbitration, which has been deemed by the Supreme Court to be

against public policy.34 The dispute on this issue, and in particular the effect this

unenforceable clause has on the delegation of the issue of substantive arbitrability to

the arbitrator, hinges on whether the arbitration clause should be severed in full or

in part. This turns the Court’s attention to the parties’ intention as evidenced in “the

four corners of the document”, and specifically the unambiguous language of the

Severability Clause.35 The Severability Clause states,

In the event that any one or more provisions of this Agreement shall for
any reason be held to be invalid, illegal or unenforceable, any such
invalid, illegal or unenforceable provision shall be treated as modified
to the least extent necessary to rectify its invalidity, illegality or
unenforceability, and shall be enforced as so modified.36

33
See BuzzFeed, 2024 WL at *13 (stating that when the very existence of the arbitration
agreement is in dispute the Court may “proceed[] to consider the continuing existence of
the container agreement to determine the parties’ continuing assent to arbitrate[,]” but once
the Court determines that the agreement exists substantive arbitrability must be left to the
arbitrator per the parties’ agreement).
34
D.I. 1, Ex. B at § 15.2 (“The parties hereby renounce all recourse to litigation and agree
the award of the arbitrator shall be the final and subject to no judicial review.”); Williams,
965 F.3d at 238 (citing Italian Colors Rest., 570 U.S. at 236).
35
Fairstead, 288 A.3d at 759 (quoting Viking Pump, Inc., 148 A.3d at 648).
36
D.I. 1, Ex. B at §17.2.
C.A. No. 2025-0020-LM
August 8, 2025
Page 10 of 17

Although Plaintiff argues that the judicial review provision cannot be severed and

the entire arbitration agreement should be deemed unenforceable, I disagree. Here,

the MSA’s severability clause clearly supports that the modification of invalid

portions of the agreement should be done “to the least extent necessary to rectify its

invalidity,” and therefore supports severing a portion of the arbitration clause if

found unlawful and allowing the rest of the Arbitration Clause to stand.37

The invalid portion of the Arbitration Clause may be severed, and therefore

the arbitration clause and the language delegating the issue of substantive

arbitrability therein are valid. I explain further below the Parties’ delegation of the

issue of substantive arbitrability to the arbitrator.

B. According to the terms of the arbitration clause, this Court lacks
the ability to rule on the issue of substantive arbitrability.

“The threshold question regarding the validity of an arbitration agreement is

known as substantive arbitrability.”38 “Substantive arbitrability is the question of

whether a dispute is within the scope of an arbitration provision and, therefore,

37
Id.; see also Suppi Constr., Inc. v. EC Dev. I, LLC, 2024 WL 939851, *5 (Del. Super.
Mar. 4, 2024) (“A clear and unambiguous severability clause permits the Court to sever
the invalid language while enforcing the remainer of the agreement that does not violate
the law.”).
38
DMS Properties-First, Inc. v. P.W. Scott Assocs., Inc., 748 A.2d 389, 391 (Del. 2000).
C.A. No. 2025-0020-LM
August 8, 2025
Page 11 of 17

subject to arbitration.”39 “In order to determine whether claims should be resolved

through arbitration, the court must first determine whether substantive arbitrability

will ultimately be decided by the court or [by] an arbitrator.”40 “When deciding

whether the parties agreed to arbitrate a certain matter (including arbitrability) courts

generally … should apply ordinary state-law principles that govern the formation of

contracts.”41

Generally, questions of substantive arbitrability are decided by the courts.42

“Delaware recognizes an exception to the general rule that ‘courts should decide

questions of substantive arbitrability’ when the parties’ contract provides ‘clear and

unmistakable evidence’ of their intent that an arbitrator should decide the

question.”43 “[T]he parties are considered to have explicitly and clearly provided for

arbitrability to be an issue for the arbitrator where they have ‘generally provide[d]’

for arbitration of all disputes, and ‘incorporate[d] a set of arbitration rules (such as

39
AffiniPay, LLC v. West, 2021 WL 4262225, at *4 (Del. Ch. Sep. 17, 2021).
40
West IP Common’s, Inc. v. Xactly Corp., 2014 WL 3032270, at *6 (Del. Super. Ct. June
25, 2014).
41
First Options of Chicago, Inc, v. Kaplan, 514 U.S. 938, 944 (1995).
42
Redeemer Committee of Highland Crusader Fund v. Highland Cap. Mgmt., 2017 WL
713633, at *3 (Del. Ch. Feb. 23, 2017).
43
Innovation Inst., LLC, 2019 WL at *4 (Del. Ch. Aug. 28, 2019) (quoting James &
Jackson, LLC v. Willie Gary, LLC, 906 A.2d 76, 78 (Del. 2006)).
C.A. No. 2025-0020-LM
August 8, 2025
Page 12 of 17

the AAA rules) that provide for the arbitrator to address the issue.”44 When the

arbitration agreement incorporates a set of arbitration rules a heavy presumption is

created that “the parties intended to delegate substantive arbitrability[,]” and then

the remaining prong asks “whether that heavy presumption is overcome because the

parties did not agree to arbitrate generally all disputes.”45

The Arbitration Agreement does not contain an express delegation clause, but

it does refer to the “Rules of Arbitration” of the AAA (hereinafter, “AAA Rules”)

which do contain a delegation clause.46 The deferral to the AAA rules in the

arbitration clause is sufficient to fulfill the prong of the Willie Gary standard that

requires the clause incorporate a set of rules that delegates the issue of substantive

arbitrability to the arbitrator.47 The remaining prong is fulfilled here as the arbitration

clause generally provides for the arbitration of “any dispute arising out of or in

44
Hagler v. Evolve Acquisition LLC, 2021 WL 6123549, at *4 (Del. Ch. Dec. 28, 2021)
(quoting Willie Gary, LLC, 906 A.2d at 80).
45
BuzzFeed, 2024 WL at *5 (internal citation omitted).
46
D.I. 1, Ex. B at § 15.2 (“such a dispute shall thereafter be finally settled under the Rules
of Arbitration of the International Chamber of Commerce (if conducted outside of the
United States) or the American Arbitration Association (if conducted inside the United
States) by one or more arbitrators appointed in accordance with the said Rules of
Arbitration.”).
47
McLaughlin v. McCann, 942 A.2d 616, 625 (Del. Ch. Feb. 21, 2008) (“[A] reference to
the AAA Rules provide[s] evidence of the parties’ clear and unmistakable intent to arbitrate
arbitrability.”).
C.A. No. 2025-0020-LM
August 8, 2025
Page 13 of 17

connection with this Agreement,” after the parties have made an attempt to resolve

the issue themselves, “be finally settled under the Rules of … the American

Arbitration Association.”48

The parties do not dispute the applicability of the AAA Rule’s delegation

clause;49 rather, the Plaintiff argues that the Arbitration Clause is not enforceable in

its entirety rendering the referral to the delegation clause in the AAA rules

inapplicable to defer the issue of arbitrability.50 As discussed above, I do not find

this argument to be compelling. The issue of substantive arbitrability is known as a

threshold question for a reason, and the Plaintiff here cannot circumvent that entry

point by attempting to force the Court to decide on arbitrability when it lacks the

power to do so in the first place.51 The Arbitration Clause and the delegation adopted

through the AAA rules therein remains intact through the Severance Clause that

removes the prohibited provision.

48
D.I. 1, Ex. B at §§15.1–15.2.
49
D.I. 24 at 12; D.I. 30 at 4 n. 3.
50
D.I. 30 at 4–10.
51
See e.g. Gandhi-Kapoor v. Hone Cap. LLC, 307 A.3d 328, 356 (Del. Ch. Nov. 22, 2023)
(“[I]f a valid agreement exists, and if the agreement delegates the arbitrability issue to an
arbitrator, a court may not decide the arbitrability issue.”).
C.A. No. 2025-0020-LM
August 8, 2025
Page 14 of 17

I do not find it necessary to overcomplicate this issue and draw Plaintiff’s

attention to the very core of this threshold question which is one of intent,

specifically the “clear and unmistakable evidence that the parties agreed to submit

the question to arbitration.”52 Here, an existing arbitration clause expresses, in

writing, the parties’ clear intent to submit such issues of arbitrability to an arbitrator,

and adopts a set of rules that agrees to arbitrate arbitrability, so this Court’s analysis

must end there. Accordingly, I must agree with Defendants’ assertion that this Court

lacks subject matter jurisdiction over issues of substantive arbitrability.

C. The Plaintiff’s motion for preliminary injunction is dismissed as
moot.

“A preliminary injunction may be granted where the movant demonstrates:

(1) a reasonable probability of success on the merits at a final hearing; (2) an

imminent threat of irreparable injury; and (3) a balance of the equities that tips in

favor of the issuance of the requested relief.”53 Proof of these three elements is by

“the preponderance of the evidence,”54 which requires evidence making something

52
Innovation Inst., LLC, 2019 WL at *4 (quoting Willie Gary, LLC, 906 A.2d at 78).
53
Applied Energetics, Inc. v. Farley, 2019 WL 334426, at *5 (Del. Ch. Jan. 23, 2019)
(citing Nutzz.com v. Vertrue Inc., 2005 WL 1653974, at *6 (Del. Ch. Jul. 6, 2005)).
54
Rosenbaum v. CytoDyn Inc., 2021 WL 4775140, at *13 (Del. Ch. Oct. 13, 2021).
C.A. No. 2025-0020-LM
August 8, 2025
Page 15 of 17

more likely than not.55 When the Court finds a lack of subject matter jurisdiction

over issues of substantive arbitrability an opposing party’s motion for preliminary

injunction must be denied.56

As already explained above, the arbitration clause is valid and therein the

parties have agreed that the issue of substantive arbitrability is in the hands of the

arbitrator. The Plaintiff’s inability to establish this Court’s jurisdiction over the

issue of substantive arbitrability implicates the failure of their motion for

preliminary injunction on the first prong requiring a showing of likelihood of

success on the merits. As this Court lacks subject matter jurisdiction to determine

the threshold question of substantive arbitrability, I find it appropriate to deny

Plaintiff’s motion for preliminary injunction as moot.

III. CONCLUSION

In summation, this Court lacks subject matter jurisdiction to decide on

substantive arbitrability and the Plaintiff’s motion for preliminary injunction

enjoining arbitration is denied. Given that the issue of substantive arbitrability is

55
McKenna v. Singer, 2017 WL 3500241, at *13 (Del. Ch. Jul 31, 2017).
56
See e.g. CVD Equip. Corp. v. Dev. Specialists, Inc., 2015 WL 4506052, at *4 (Del. Ch.
Jul. 23, 2015) (“Since the Seller contractually agreed to be bound on questions of
substantive arbitrability by the arbitrator, a complete contractual remedy exists in
arbitration, and I am without jurisdiction. For the foregoing reasons, the Assignee’s Motion
to Dismiss is granted, and the Seller’s request for injunctive relief is moot.”).
C.A. No. 2025-0020-LM
August 8, 2025
Page 16 of 17

being referred to an arbitrator, I find it appropriate to stay the matter under the

FAA.57 If the arbitrator ultimately determines the claim is arbitrable, the parties

should update the Court and then this action will be dismissed for lack of subject

matter jurisdiction.

There is also an outstanding issue regarding fees. Defendants argue they are

entitled to reimbursement for fees and costs associated with this action pursuant to

section 15.2 of the MSA that provides “[t]he prevailing party shall be entitled to

reimbursement of all costs related to such arbitration (including reasonable

attorneys’ fees) from the other Party.”58 Since the matter is stayed pending the

arbitrator’s decision regarding the arbitrability of the claims, I decline at this time to

make any determination regarding attorney’s fees and costs.

57
9 U.S.C. § 3; see Innovation Inst., LLC, 2019 WL at *6 (staying a matter pending the
arbitrator’s decision on arbitrability); see also Erving, 2022 WL at *8 (Del. C. Nov. 28,
2022) (staying the matter pending the arbitrator’s decision after finding the parties
evidenced a clear and unmistakable intent to have the arbitrator decide issues of substantive
arbitrability).
58
D.I.1, Ex. B at §15.2.
C.A. No. 2025-0020-LM
August 8, 2025
Page 17 of 17

This is my final report, and exceptions may be filed under Court of

Chancery Rule 144.59

Respectfully submitted,

/s/ Loren Mitchell

Magistrate in Chancery

59
See Ct. Ch. R. 144(d)(1) (In “[a]ctions that are not summary or expedited… [a] party
taking exceptions must file a notice of exceptions within 11 days of the date of the Final
report or Draft Report.”).