The Supreme Court unanimously ruled against a major cryptocurrency exchange on May 23, finding that a customer dispute over a sweepstakes should remain in the courts, as opposed to going to arbitration.
The respondents argued that the forum-selection provision in the sweepstakes rules governs in sweepstakes-related disputes and filed a class-action lawsuit in federal court in California, saying that the sweepstakes rules violated California law.
The judge determined that the parties hadn't "Clearly and unmistakably delegated" to the arbitrator "How to address the interaction between two separate contracts." The U.S. Court of Appeals for the Ninth Circuit ruled that the case should stay in the courts.
One contained an arbitration provision with a delegation clause that stated an arbitrator "Must decide all disputes under the contract, including whether a given disagreement is arbitrable." The second contract featured a forum-selection clause that stipulated that all disputes related to that contract have to be decided in California courts.
"Basic legal principles establish the answer. Arbitration is a matter of contract and consent, and we have long held that disputes are subject to arbitration if, and only if, the parties actually agreed to arbitrate those disputes. "Here before either the delegation provision or the forum selection clause can be enforced, a court needs to decide what the parties have agreed to-i.e., which contract controls.
"In cases where parties have agreed to only one contract, and that contract contains an arbitration clause with a delegation provision absent a successful challenge to the delegation provision, courts must send all arbitrability disputes to arbitration.
The Supreme Court stated that the issue was "outside the scope of the question presented" and that the court does not address it in this ruling.
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