Wachtell Seeks to Push Musk’s X Corp. Lawsuit to Arbitration

Wachtell, Lipton, Rosen & Katz is looking to move its fight over $90 million in fees with Elon Musk’s X Corp. to arbitration.

The Wall Street firm on Sept. 8 filed a motion to compel, asking the court to enforce an arbitration clause in the master retention agreement signed between Wachtell and Twitter for its representation of the social media company in its contentious $44 billion sale to Musk.

Twitter’s parent, X, sued Wachtell in San Francisco Superior Court in July, claiming that $90 million Twitter paid to the firm amounted to “unjust enrichment.” Twitter had agreed to pay the firm’s lawyers on an hourly basis, X Corp. claimed.

Wachtell contends that Twitter and Wachtell “never agreed to limit the firm’s fee to its hourly rates.” Moreover, the two parties agreed to “expedite arbitration of disputes” relating to the firm’s engagement, the firm said in its Sept. 8 filing.

The arbitration clause in the Master Retention agreement between Twitter and Wachtell covers all claims related in any way to the pact, with an exception for enforcing claims injunctive or equitable relief, the filing said.

It also contains a broad delegation provision that requires disputes over the scope and applicability of the arbitration clause to be resolved by the arbitrator, it added.

“X Corp. tries to plead around the Arbitration Clause by styling the relief it seeks as `equitable.’ But its effort at most shows the existence of a dispute over the scope of the Arbitration Clause for the arbitrator to resolve,” the filing noted.

Jordan Eth and Ragesh Tangri from Morrison & Foerster are representing Wachtell. Reid Collins & Tsai is representing X.

The case is: X Corp. vs. Wachtell, Lipton, Rosen & Katz, No. CGC-23-607461, California Superior Court (7/5/2023).