As the compétence-compétence stare-down continues between the U.S. courts and the drafters of the American Law Institute’s Restatement of the Law of International Commercial Arbitration, rather few seem to have taken notice that the U.S. Second Circuit Court of Appeals may have blinked.

The reflexive twitch happened on Halloween (boo!), when the Second Circuit in NASDAQ OMX Group, Inc. v. UBS Securities, LLC, 770 F.3d 1010 (2d Cir. Oct. 31, 2014) affirmed a preliminary injunction — based upon a judicial first instance determination of non-arbitrability — that prevents UBS from arbitrating claims against the NASDAQ for damages allegedly caused by the exchange’s handling of Facebook’s initial public offering in 2012.

NASDAQ and UBS had a “Services Agreement” whose dispute resolution clause provided for arbitration of all but a carved-out category of disputes, under the AAA Commercial Arbitration Rules. And those AAA Rules provided that the arbitrator “shall have the power to rule on his or her own jurisdiction….”

The Second Circuit has led the way for other federal courts in treating such arbitration rule provisions as “clear and unmistakable evidence” that the parties have agreed to permit arbitrators not courts to decide most issues of “arbitrability,” i.e. whether the arbitrator has jurisdiction — other than the threshold question of whether any agreement to arbitrate was made. But that position, at least per this latest decision of the Second Circuit, is based upon the presence of a “broad” arbitration clause that commits “all disputes” to arbitration, presumably including disputes over the scope of arbitrable issues.

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