Opinion ID: 2747291
Heading Depth: 2
Heading Rank: 3

Heading: The Parties’ Services Agreement

Text: NASDAQ and UBS are parties to a bilateral “Services Agreement,” several sections of which are relevant here.3 Section 12.B of the Services Agreement, entitled “Indemnification,” is the basis for UBS’s underlying claim for breach of contract and indemnification. It states as follows: NASDAQ OMX shall be liable to, indemnify against, and hold Subscriber [i.e., UBS], its employees, directors, and other agents harmless from, any and all Claims or Losses (as those terms are defined . . . herein) imposed on, incurred by or asserted against [UBS], its employees, directors, and other agents to the extent that the Claims and Losses result . . . from acts or omissions of NASDAQ OMX, its employees, directors, agents or associated persons; or from the receipt or use of [UBS]’s Data (including representations about 3 Like the parties, we refer to the latest version of the Agreement, as revised February 20, 2013, which does not differ materially from that in effect at the time of the Facebook IPO. 9 [UBS]’s Data) by NASDAQ OMX, its employees, directors, or agents . . . . A. 136. The referenced “Claims or Losses” are defined in Section 12.G of the Services Agreement as follows: any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, judgments, and reasonable costs and expenses of whatever nature, whether incurred by or issued against an indemnified Party, including without limitation: (i) indirect, special, punitive, consequential, or incidental loss or damage (including, but not limited to, trading losses, loss of anticipated profits, loss by reason of shutdown in operation or increased expenses of operation, or other indirect loss or damage); and (ii) reasonable administrative costs, litigation costs, and auditors’ and attorneys’ fees, both in‐ house and outside counsel, and related disbursements. A. 137. UBS’s demand for arbitration derives from Section 18 of the Services Agreement, entitled “Arbitration,” which states in relevant part: A. Except as may be provided in the NASDAQ OMX Requirements, all claims, disputes, controversies, and other matters in question between the Parties to this Agreement and the Parties’ employees, directors, agents and associated persons arising out of, or relating to this Agreement, or to the breach hereof, shall be settled by final binding arbitration in accordance with this Agreement and the following procedure or such other procedures as may be mutually agreed upon by the Parties. B. Except as otherwise provided herein or by agreement of the Parties, any arbitration proceeding shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration 10 Association or in accordance with such other rules and procedures as are agreed to by the Parties. . . . D. The arbitration proceeding shall be held in the City of New York, unless otherwise agreed by the Parties. The decision rendered through arbitration shall be final and binding upon the Parties hereto and judgment may be entered in accordance with applicable law in any court having jurisdiction thereof. A. 139. The “NASDAQ OMX Requirements,” referenced in the opening qualifying phrase of the Arbitration provision, are defined at the outset of the Services Agreement, in Section 1.A, as follows: (i) the rules, regulations, interpretations, decisions, opinions, orders and other requirements of the Securities and Exchange Commission (“SEC”); (ii) the applicable rules, regulations, disciplinary decisions, and rule interpretations of self‐regulatory organizations; (iii) NASDAQ OMX’s operating procedures, specifications, requirements, and other documentation that is regulatory or technical in nature (including, but not limited to, user guides) . . . ; (iv) all other applicable laws, statutes, rules, regulations, orders, decisions, interpretations, opinions, and other requirements, whether promulgated by the United States or any other applicable jurisdiction (including in the area of intellectual property); and (v) the successors, as they may exist at the time, of the components of the NASDAQ OMX Requirements. A. 122–23. Further noteworthy is Section 17 of the Services Agreement, which states that “[i]n the event of any conflict between the provisions of the [Services Agreement], the Attachments, or the NASDAQ OMX Requirements, the order of 11 preference shall be the NASDAQ OMX Requirements, the Attachments, and the [Services Agreement].” A. 138.