On Thursday, the U.S. Supreme Court unanimously ruled against Coinbase Inc. (COIN) in an arbitration dispute stemming from the cryptocurrency exchange’s 2021 Dogecoin (DOGE) sweepstakes. The 9-0 decision clarified that a court must decide which legal agreement prevails when multiple contracts are involved.

Justice Jackson stated, “The question of whether these parties agreed to arbitrate arbitrability can only be resolved by determining which contract applies. In examining the conflict between the delegation clause in the first contract and the forum selection clause in the second, it is up to the court to decide whether the parties agreed to arbitrate this dispute.”

Coinbase had sought to resolve the dispute through arbitration based on user agreements requiring arbitration for all customers. However, a federal judge ruled in November that the sweepstakes terms, which designated California’s court system for disputes, took precedence over the customer agreement.

The Supreme Court's decision upheld that the lower court should determine which agreement is applicable. Justice Jackson also refuted Coinbase’s argument that a ruling against them would cause widespread legal confusion and allow parties to bypass arbitration agreements, stating, “We do not believe that such chaos will follow.”

Arbitration lawyer Richard Silberberg of Dorsey & Whitney remarked that the decision was “hardly surprising” given past rulings and confirmed that “a court, not an arbitrator, must decide whether the parties’ first agreement was superseded by the second.” He also noted the decision's narrow scope would limit its impact on future arbitration-related cases.