Oracle America, Inc. v. Myriad Group A.G.

Incorporating the United Nations Commission on International Trade Law arbitration rules into the arbitration provision of a commercial contract constitutes “clear and unmistakable evidence” that the parties intended to delegate questions of arbitrability to the arbitrator.

Oracle America, Inc. (“Oracle”), a Delaware Java programming language developer, entered into a Community Source License with Myriad Group A.G. (“Myriad”), a Swiss software company. The Community Source License contained an arbitration clause. When Oracle sued Myriad in California, Myriad moved to compel arbitration based on the arbitration clause in the Source License. The district court granted arbitration for the breach of contract claim, but denied arbitration for all other claims in the suit. The district court held that incorporating the United Nations Commission on International Trade Law (“UNCITRAL”) arbitration rules “did not constitute clear and unmistakable evidence that the parties intended to delegate questions of arbitrability to the arbitrator.” The Ninth Circuit disagreed. The panel held that “as long as an arbitration agreement is between sophisticated parties to commercial contracts, those parties shall be expected to understand that incorporation of the UNCITRAL rules delegates questions of arbitrability to the arbitrator.” The panel relied on recent decisions of the Second and D.C. Circuits. Both circuits have held that when parties incorporate UNCITRAL into their agreement, it is “clear and unmistakable evidence” of their intent to arbitrate. Oracle also argued that the carve-out clause in the arbitration provision “expresse[d] their intent that a court would decide arbitrability.” The panel disagreed with Oracle and held that “Oracle’s argument conflate[d] the scope of the arbitration clause….” Incorporating the UNCITRAL rules “clearly and unmistakably delegated” arbitrability to the arbitrator. REVERSED and REMANDED.