In its July 26, 2013 opinion in Oracle America v. Myriad Group A.G., the US Court of Appeals for the Ninth Circuit held that the incorporation of the United Nations Commission on International Trade Law (UNCITRAL) arbitration rules into a license agreement are clear and unmistakable evidence that the parties intended to delegate questions of arbitrability to an arbitrator and not to the court.

Myriad Group, a Swiss mobile software company, entered into a license agreement with Oracle America in 2002 to use Oracle's Java programming language and trademarks in exchange for royalties. The license agreement contained a clause that provided that disputes would be settled by arbitration in accordance with the UNCITRAL rules but also carved out certain intellectual property claims from its scope. Myriad later stopped paying royalties but continued to use the Java language and trademarks. As a result, Oracle filed suit in the US District Court for the Northern District of California for breach of contract, copyright infringement, unfair competition under California law and violation of the Lanham Act.

Myriad moved the district court to compel arbitration based on the arbitration clause in the license agreement. The district court granted the motion only for the breach of contract claim and denied the motion for the intellectual property claims. It ruled that because the arbitration clause vested jurisdiction with the court for certain intellectual property claims, the parties in fact intended for the court to decide questions of arbitrability. Myriad appealed this partial denial of its motion.

The only issue before the Ninth Circuit was who should determine the arbitrability of the disputes, the court or the arbitrator. The court noted that whether the court or arbitrator decides arbitrability is an issue for judicial determination unless the parties clearly and unmistakably provide otherwise. The Ninth Circuit found, however, that the scope of an arbitration clause should not be conflated with who decides arbitrability. Because the UNCITRAL rules give the arbitral tribunal the authority to decide its own jurisdiction, the court held that the incorporation of those rules in the arbitration clause are clear and unmistakable evidence that the parties intended to arbitrate arbitrability. This holding follows the prevailing view and joins the decisions in the US Courts of Appeals for the Second Circuit in Republic of Ecuador v. Chevron Corp. and the DC Circuit in Republic of Argentina v. BG Group PLC. Notably, the US Supreme Court granted certiorari to the DC Circuit decision on June 10, 2013 (see Legal update, BG Group v Argentina: US Supreme Court grants certiorari).

Counsel should note that the incorporation of UNCITRAL rules in an arbitration clause qualifies as clear and unmistakable evidence that the parties intend questions of arbitrability to be delegated to the arbitrator, even if an arbitration clause carves out certain claims from its scope.