Who Decides Arbitrability When Contracts Conflict

The Supreme Court has ruled that when there are two conflicting agreements—one sending arbitrability disputes to arbitration and the other sending them to the courts—as a threshold matter, a court must decide which contract governs to reach the question of arbitrability.

WHY THIS IS IMPORTANT…In prior decisions, the Supreme Court covered three layers of arbitration disputes: (1) merits, (2) arbitrability, and (3) who decides arbitrability. This dispute touched on a fourth layer—who decides arbitrability when multiple contracts conflict over that question. It found that a decision has to be made by a court as to which contract governs. The Supreme Court recognized that parties are free to put arbitration provisions in their contracts and contracts however they wish. Still, it is a court that must determine what the parties agreed to and what the contract provides when it comes to a dispute on this issue.