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United States - Arbitration & Dispute Resolution - Supreme Court Holds That The Court, Not The Arbitrator, Should Decide Whether A Later Forum Selection Clause Supersedes An Earlier Arbitration Agreement
by Gunnar Larson 01 Jun '24

01 Jun '24

https://www.mondaq.com/unitedstates/arbitration--dispute-resolution/1471232… SUMMARY The Supreme Court has held that when parties have agreed to two contracts—one delegating arbitrability disputes to the arbitrator, and the other either explicitly or implicitly reserving arbitrability disputes for the courts—a court must decide which contract governs. The case centers on a proposed class action brought by the plaintiffs who had entered a sweepstakes offered by Coinbase. They allege that Coinbase told consumers they were required to purchase a specific cryptocurrency called Dogecoin in order to enter the sweepstakes, when in fact they could enter for free. The plaintiffs had created accounts with Coinbase's platform and agreed to its User Agreement. The User Agreement contained an arbitration agreement and a delegation clause. The plaintiffs then entered into a second contract when they submitted entries to the sweepstakes and, in doing so, agreed to the Official Rules of the sweepstakes. Unlike the User Agreement, the Official Rules contained a forum selection clause sending disputes to California courts. Once the sweepstakes concluded, the plaintiffs filed a class-action complaint in the U. S. District Court for the Northern District of California, alleging that the sweepstakes violated California's False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act. Invoking the User Agreement and its delegation clause, Coinbase moved to compel arbitration. In a unanimous decision by Justice Ketanji Brown Jackson, the Court affirmed the Ninth Circuit's holding that the court, not the arbitrator, should decide whether the forum selection clause of the Official Rules superseded the earlier arbitration agreement contained in the User Agreement. In doing so, the Court emphasized that this is a matter of “basic legal principles,” which dictate that “[a]rbitration is a matter of contract and consent,” and thus “disputes are subject to arbitration if, and only if, the parties actually agreed to arbitrate those disputes.” The Court reiterated that consent is a threshold matter because “a party who has not agreed to arbitrate will normally have a right to the court's decision about the merits of its dispute.” Accordingly, “courts should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.” The Court explained that these principles govern the parties' dispute about whether they had agreed to send the given dispute to arbitration, “and, per usual, that question must be answered by a court.” The Court did not accept that under the doctrine of severability, “an arbitration or delegation provision is severable from the remainder of the contract,” and “unless the challenge is to the arbitration or delegation clause itself, the issue of the contract's validity is considered by the arbitrator in the first instance.” The Court reasoned that the severability principle “does not require that a party challenge only the arbitration or delegation provision. Rather, where a challenge applies equally to the whole contract and to an arbitration or delegation provision, a court must address that challenge.” The Court disagreed that its ruling would invite “chaos by facilitating challenges to delegation clauses.” The Court explained that its holding would have no implications for cases where the parties agreed to only one contract, and that contract contains an arbitration clause with a delegation provision. But where parties have agreed to two contracts—one sending arbitrability disputes to arbitration, and the other either explicitly or implicitly sending arbitrability disputes to the courts—a court must decide which contract governs, as a contrary ruling would “impermissibly elevate a delegation provision over other forms of contract.'” WHAT THIS MEANS This narrow decision is yet another example of the Court's continued emphasis on the contractual nature of arbitration. Arbitration agreements are contracts, and the courts will interpret them according to the rules that govern contracts—not through any special rules regarding arbitration. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Authors Photo of Linda T. Coberly Linda T. Coberly Photo of Thania Charmani Thania Charmani

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Cyprus - Arbitration & Dispute Resolution - Cancellation Of Arbitration Procedure When Fraud Issues Are Raised In The Referred Dispute
by Gunnar Larson 01 Jun '24

01 Jun '24

https://www.mondaq.com/cyprus/arbitration--dispute-resolution/1471558/cance… Arbitration serves as an alternative to court proceedings when there is a dispute between two contracting parties regarding the fulfillment of obligations or the exercise of rights within the framework of their contractual relationship. The ability of the contracting parties to resort to arbitration instead of court depends on the existence of necessary arbitration clauses in their contract. This significance is highlighted in a recent case involving a public interest construction contract between a Municipality and a contracting company. In the context of the said contract, disagreements arose between the Municipality and the contracting company regarding the executed works and their payments. As a result, the contracting company was accused of insufficient oversight to the detriment of the Municipality's interests and of engaging in collusion aimed at maximizing the profits of individuals involved in the works. The contracting company activated the arbitration clause and initiated the arbitration process despite the Municipality's refusal. The Municipality filed a civil lawsuit (OR 2.1.) against the contracting company in the District Court and simultaneously submitted an interim application seeking to cancel the arbitration agreement contained in the construction contract and to annul any arbitration proceedings initiated under it. In Cyprus, arbitration is provided for by the Arbitration Law (Cap. 4), where, according to Article 9(2), the Court has the authority to cancel arbitration proceedings when a fraud issue is raised in the referred dispute. It is understood that the party alleging fraud and seeking the cancellation of the arbitration process bears the burden of prima facie proving fraud by presenting the facts supporting its claims. In no case is it sufficient to make vague allegations of fraud. The First Instance Court concluded that the evidence presented by the Municipality met all the criteria of the Law and proceeded with issuing orders prohibiting the contracting company from proceeding with the arbitration process based on the arbitration clause contained in the disputed construction contract. The contracting company did not accept the first instance decision and filed a civil appeal challenging its correctness, presenting six grounds for appeal. Additionally, to support its appeal and dispute the correctness of the First Instance Decision, the contracting company submitted new evidence in the appeal proceedings related to the Municipality's allegation of fraud and deceit against the contracting company. The Civil Court of Appeal, in a unanimous decision on April 23, 2024, dismissed all the grounds of appeal presented by the contracting company, emphasizing that "the First Instance Court rightly concluded that sufficient details were provided by the Municipality regarding the contracting company's involvement in the alleged fraud during the execution of the construction contract. It is evident that the parties' dispute does not constitute an ordinary construction contract dispute regarding the extent and quality of the construction works that could be resolved within the framework of arbitration. Instead, detailed allegations of very serious fraudulent actions and collusion by various individuals involved in the construction works are made, resulting in the Municipality's financial damage. These allegations are so serious and specific that they can only be examined and decided in a court proceeding." The attempt by the contracting company to present new evidence regarding the facts of the case did not pass unnoticed by the Judges, who specifically stated that the new evidence did not change the situation at all, as it remains a fact that the Municipality presented sufficient and detailed evidence at the first instance to justify the conclusion of the First Instance Court that very serious fraud issues are raised in the case, which should only be heard by the Court. Additionally, it was emphasized that in such cases, what needs to be proven is a prima facie case of fraud committed by the contracting company, not whether it is substantively involved in fraud. Undoubtedly, this decision has established that participation in arbitration is not a contractual right that can be enforced like any other contractual right. Elements of compulsory arbitration participation reflect possibly outdated legal approaches globally. Furthermore, in public contracts, the preference for access to the Courts after the failure of amicable settlement is better aligned with the institution of public contracts aiming to protect the public interest. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Authors Photo of Katerina Andreou Katerina Andreou

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X Corp. Aims For 'Jugular' In Defamation Suit, Watchdog Says
by Gunnar Larson 01 Jun '24

01 Jun '24

X Corp. Aims For 'Jugular' In Defamation Suit, Watchdog Says <https://www.law360.com/competition/articles/1842388?nl_pk=6416fd97-1dc4-4e0…> By Spencer Brewer Media Matters for America says X Corp. shouldn't be allowed to target the left-leaning media watchdog's "financial jugular" by accessing its donor lists or its most sensitive financial documents, asking a federal judge Wednesday to reject the social platform's attempt to force production of the documents in a defamation suit. Complaint attached | Read full article » <https://www.law360.com/competition/articles/1842388?nl_pk=6416fd97-1dc4-4e0…> | Save to favorites » <https://www.law360.com/competition/articles/1842388?nl_pk=6416fd97-1dc4-4e0…>

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Netflix Fails To Show Inventor, Funder Violated Injunction
by Gunnar Larson 01 Jun '24

01 Jun '24

Netflix Fails To Show Inventor, Funder Violated Injunction <https://www.law360.com/technology/articles/1842606?nl_pk=2bd720dd-746c-4744…> By Dani Kass A California federal judge has said Netflix couldn't prove a Finnish inventor violated an injunction tied to his concealment of certain legal funds, or that a litigation fund manager the inventor worked with needs to face claims tied to that concealment. Decision attached | Read full article » <https://www.law360.com/technology/articles/1842606?nl_pk=2bd720dd-746c-4744…> | Save to favorites » <https://www.law360.com/technology/articles/1842606?nl_pk=2bd720dd-746c-4744…>

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Musk Won't Appeal Deposition Order In SEC's Twitter Case
by Gunnar Larson 01 Jun '24

01 Jun '24

Musk Won't Appeal Deposition Order In SEC's Twitter Case <https://www.law360.com/technology/articles/1842643?nl_pk=2bd720dd-746c-4744…> By Hailey Konnath Elon Musk has agreed to waive his right to appeal a California federal judge's order forcing him to testify again in the U.S. Securities and Exchange Commission's suit over his $44 billion acquisition of Twitter, now known as X, according to a stipulation filed Thursday. 1 document attached | Read full article » <https://www.law360.com/technology/articles/1842643?nl_pk=2bd720dd-746c-4744…> | Save to favorites » <https://www.law360.com/technology/articles/1842643?nl_pk=2bd720dd-746c-4744…>

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Mich. Judge Refers Atty To Calif. Bar Over Flint PR Stunt
by Gunnar Larson 01 Jun '24

01 Jun '24

Mich. Judge Refers Atty To Calif. Bar Over Flint PR Stunt <https://www.law360.com/legalethics/articles/1842557?nl_pk=153d4a8a-6fb9-4a5…> By Hannah Albarazi A Michigan federal judge overseeing contaminated drinking water litigation in Flint, Michigan, referred a California attorney to that state's bar on Thursday after the lawyer refused to provide more details, or submit to the court's jurisdiction, over her involvement in an alleged smear campaign targeting a lawyer for Flint children. Order attached | Read full article » <https://www.law360.com/legalethics/articles/1842557?nl_pk=153d4a8a-6fb9-4a5…> | Save to favorites » <https://www.law360.com/legalethics/articles/1842557?nl_pk=153d4a8a-6fb9-4a5…>

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Healthcare Data Co. Says Blocked Access Could Kill Patients
by Gunnar Larson 01 Jun '24

01 Jun '24

Healthcare Data Co. Says Blocked Access Could Kill Patients <https://www.law360.com/health/articles/1842447?nl_pk=6422bbc2-a823-4be5-9a9…> By Matthew Perlman A healthcare data company asked a Maryland federal court on Thursday to stop a rival from blocking access to nursing home patient records it said are needed to identify potential complications that could lead to hospitalization or death. Memorandum attached | Read full article » <https://www.law360.com/health/articles/1842447?nl_pk=6422bbc2-a823-4be5-9a9…> | Save to favorites » <https://www.law360.com/health/articles/1842447?nl_pk=6422bbc2-a823-4be5-9a9…>

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Voice Software Co. Gets Bank Customer Privacy Suit Trimmed
by Gunnar Larson 01 Jun '24

01 Jun '24

Voice Software Co. Gets Bank Customer Privacy Suit Trimmed <https://www.law360.com/banking/articles/1841728?nl_pk=feb6bbba-7878-4d39-be…> By Katryna Perera A California federal judge has trimmed a consolidated action against Nuance Communications over its voice-detection software that was used by JPMorgan Chase Bank NA, saying that the class members failed to show how Nuance supposedly used the software to assess the truth or falsity of a person's statements by analyzing their vocal characteristics. Order attached | Read full article » <https://www.law360.com/banking/articles/1841728?nl_pk=feb6bbba-7878-4d39-be…> | Save to favorites » <https://www.law360.com/banking/articles/1841728?nl_pk=feb6bbba-7878-4d39-be…>

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Morgan Stanley Helped Musk's Stealth Twitter Buys, Suit Says
by Gunnar Larson 01 Jun '24

01 Jun '24

Morgan Stanley Helped Musk's Stealth Twitter Buys, Suit Says <https://www.law360.com/banking/articles/1842675?nl_pk=feb6bbba-7878-4d39-be…> By Hailey Konnath Elon Musk and his wealth manager tapped Morgan Stanley to help the Tesla CEO quietly acquire billions of dollars in Twitter securities without tipping off the market before he announced plans to take over the social media company, according to an amended complaint filed in New York federal court. 2 documents attached | Read full article » <https://www.law360.com/banking/articles/1842675?nl_pk=feb6bbba-7878-4d39-be…> | Save to favorites » <https://www.law360.com/banking/articles/1842675?nl_pk=feb6bbba-7878-4d39-be…>

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Kalshi Says Elections Aren't Games In Voting Wager Hearing
by Gunnar Larson 01 Jun '24

01 Jun '24

Kalshi Says Elections Aren't Games In Voting Wager Hearing <https://www.law360.com/banking/articles/1842633?nl_pk=feb6bbba-7878-4d39-be…> By Jared Foretek A D.C. federal judge on Thursday tried to weigh whether gambling on elections can be considered "gaming" in predictions market Kalshi's challenge to a U.S. Commodity Futures Trading Commission order blocking it from offering election-based futures contracts. Read full article » <https://www.law360.com/banking/articles/1842633?nl_pk=feb6bbba-7878-4d39-be…> | Save to favorites » <https://www.law360.com/banking/articles/1842633?nl_pk=feb6bbba-7878-4d39-be…>

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