SCOTUS Holds That When Parties Enter into Multiple Contracts Containing Conflicting Dispute Resolution Provisions, A Court, Not an Arbitrator, Must Decide Which Contract Governs

A CCA Blog*

       By Richard H. Silberberg, Past President, College of Commercial Arbitrators

In Coinbase v. Suski, 610 U.S. __ (May 23, 2024) (“Coinbase”), SCOTUS resolved a very narrow legal question based upon a highly specific factual scenario. The parties entered into two contracts. The earlier contract contained an arbitration clause specifically delegating issues of arbitrability to an arbitrator. The subsequent contract contained a forum selection clause requiring litigation of disputes in the California courts. The case called upon SCOTUS to decide whether an arbitrator or a court should decide whether the subsequent contract providing for the litigation of disputes in California superseded the earlier providing for the arbitration of disputes and for the delegation of arbitratability issues to an arbitrator.

The unanimous SCOTUS decision that a court, not an arbitrator, must decide whether the parties’ second agreement superseded the first was hardly surprising. The decision is fully consistent with prior SCOTUS precedent establishing that arbitration is a matter of contract, and that before referring a dispute to an arbitrator, a court must decide whether a valid arbitration agreement exists.

It is important to note that the existence of an explicit delegation clause in an arbitration agreement, is somewhat unusual, as is a situation in which the parties have entered into multiple contracts containing conflicting dispute resolution provisions. Those facts suggest that Coinbase will have limited applicability in arbitration-related jurisprudence going forward.

More typically, an arbitration agreement contains a clause adopting a set of institutional provider arbitration rules delegating arbitrability issues to an arbitrator. Coinbase did not present the issue of whether such a provision in an arbitration agreement constitutes “clear and unmistakable evidence” that the parties agreed to arbitrate such issues and, accordingly, SCOTUS did not decide that issue.

*We are using the Aardvark moniker to denote our CCA Blog. The Aardvark will provide content from time to time about cases, developments and issues associated with the practice of Arbitration. We hope you will find the blog entries interesting and useful. We encourage you to watch for the Aardvark and its arbitration content that we hope you will enjoy.