U.S. Supreme Court Clarifies Arbitrability Disputes When Contracts Conflict
June 06, 2024 at 07:16 am
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The Supreme Court of the United States has decided another case that affects enforcement of arbitration clauses. Coinbase v. Suski concerned users of a crypto exchange. When the users registered with the exchange, they executed a user agreement that contained an arbitration requirement with a delegation clause, meaning "an arbitrator must decide all disputes under the contract, including whether a given disagreement is arbitrable." Coinbase later offered a sweepstakes in which the official rules for entries instead "contained a forum selection clause, providing that all disputes related to that contract must be decided in California courts."
The conflict between the user agreement and the official rules became a problem when users filed a class-action complaint arising from the sweepstakes. Coinbase moved to compel arbitration based on the user agreement. The users resisted, relying on the sweepstakes official rules. The Supreme Court ruled that where a conflict exists, as it did here, then "a court, not an arbitrator, must decide whether the parties' first agreement was superseded by their second."
Coinbase answers an important question because it can be frustratingly common to have conflicting contracts between two parties. However, it also indirectly emphasizes the importance of contract drafting and review.
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Mr Michael Lowry
Wilson Elser Moskowitz Edelman & Dicker LLP
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Coinbase Global, Inc. is a holding company of Coinbase, Inc. and other subsidiaries. The Company provides platform, which enables its users to engage in a variety of activities, including discovering, trading, staking, storing, spending, earning and using their crypto assets. The Company offers a suite of products and services that are designed to meet the distinct needs of its three customer groups: consumers, which includes individual retail user customers seeking to discover or trade crypto assets and engage in on chain activities; institutions, which are businesses that include market makers, asset managers, hedge funds, banks, wealth platforms, registered investment advisors, payment platforms, and public and private corporations; developers, which comprise of developers, creators, merchants, crypto asset issuers, organizations and financial institutions, and other groups building decentralized protocols, applications, products, or other services on chain.
COINBASE GLOBAL, INC. 
