Reed Smith Client Alerts

Key takeaways

  • U.S. Supreme Court rules that courts, and not arbitrators, must decide which contract governs when parties enter into agreements that contain conflicting dispute resolution provisions.
  • Decision resolves conflict amongst federal appellate courts as to the enforceability of arbitrability delegation clauses when related contracts conflict on the point.
  • U.S. Supreme Court reemphasized that “clear and unmistakable evidence” is required to assume that parties agreed to arbitrate arbitrability and that conflicting clauses in different contracts can destroy this clarity.
  • The decision underscores the importance of having consistent dispute resolution provisions in related contracts to ensure that parties’ intentions are properly upheld.

Introduction

In Coinbase, Inc. v. Suski et al., No. 23-3, 602 U.S. ___ (May 23, 2024) (Coinbase), the U.S. Supreme Court (the Court) recently decided that courts – and not arbitrators – are entitled to determine whether disputes must be arbitrated when contracts contain conflicting dispute resolution clauses. The Coinbase decision is important for international arbitration practitioners because it not only reaffirms the importance of thoughtful clause drafting, but clearly reinforces that U.S. courts will enforce unambiguous arbitration clauses in accordance with the parties’ intentions.