Court Opinion

ID: 5547609
Source: CourtListenerOpinion
Date Created: 2022-01-10 20:14:45.544393+00
Date Added: 2024-06-11T08:34:57.155904
License: Public Domain

THE COURT OF APPEALS FOR THE STATE OF WASHINGTON

DEKRYPT CAPITAL, LLC, a Delaware                                No. 82606-9-I
company, DEKRYPT MASTER FUND
L.P., a British Virgin Islands company,                         DIVISION ONE
DEKRYPT VENTURES I L.P., a British
Virgin Islands company, ARRINGTON                               UNPUBLISHED OPINION
XRP CAPITAL CAYMAN SPV, LTD., a
Cayman Islands company, and
ARRINGTON CAPITAL MANAGEMENT,
LLC, a Washington Company,

                      Respondents,

              v.

UPHOLD LTD., a Cayman Islands
exempted limited liability company,
UPHOLD, INC., a Washington corporation,
UPHOLD HQ INC., a South Carolina
corporation, JUAN PABLO THIERIOT,
individually and the marital community
comprised thereof, and DANIEL SCHATT,
individually and the marital community
comprised thereof,

                      Appellants.

       ANDRUS, A.C.J. — Uphold Ltd., two affiliated companies, Juan Pablo

 Thieriot, Uphold’s chief executive officer, and Daniel Schatt, a member of Uphold’s

 board (collectively Uphold), appeal a trial court order denying their motion to

 compel arbitration of claims asserted by five companies who contracted with

      Citations and pin cites are based on the Westlaw online version of the cited material.
No. 82606-9-I/2

Uphold to purchase units of cryptocurrency (the Buyers).                    We conclude the

arbitrability of the Buyers’ claims is governed by the Federal Arbitration Act (FAA), 1

and that under this federal statute, we refer to state law to interpret the agreement

to decide who may compel arbitration. We further conclude there is no conflict

between Singapore law, the choice of law of the contract, and Washington law,

and that under both jurisdictions, Uphold has the right to compel arbitration of the

Buyers’ claims. We therefore reverse and remand for the entry of an order

compelling arbitration.

                                     FACTUAL BACKGROUND

        In November 2020, five companies—Dekrypt Capital LLC, Dekrypt Master

Fund L.P., Dekrypt Ventures L.P. (the Dekrypt Companies), Arrington XRP Capital

Cayman SPV, Ltd., and Arrington Capital Management LLC (the Arrington

Companies)—initiated a lawsuit against Uphold. 2 The lawsuit alleges that Uphold

represented that it intended to universalize the process of trading cryptocurrencies

by building a “Universal Protocol Platform, a digital reserve ecosystem that

provides interoperability for blockchain-based assets,” and was raising money for

the project through the sale of cryptocurrency tokens. It further alleges that the

Dekrypt Companies and the Arrington Companies entered into “Token Sale

Agreements” (TSAs) with Uphold for the purchase of these tokens, that the tokens

were “securities” under the Washington State Securities Act (WSSA), chapter

21.20 RCW, and that Uphold violated the WSSA by selling unregistered securities

19 U.S.C. §§ 1-14.
2 According to the complaint, Uphold, Inc. and Uphold HQ, Inc. are subsidiaries of Uphold, Ltd.
Juan Pablo Thieriot is the chief executive officer of all three Uphold companies. Daniel Schatt was
a board member of Uphold HQ.

                                               -2-
No. 82606-9-I/3

and making materially false representations in the sales. These Buyers seek to

rescind the TSAs and to recover damages for violations of the WSSA and for

negligent misrepresentations.

        The Buyers’ claims arise out of three separate, but identical TSAs. Each

TSA provided:

        THIS TOKEN SALE AGREEMENT is entered into . . . by and
        between:

        1. THE VENDOR (AS DEFINED HEREIN); and
        2. THE PERSON/CORPORATION WHOSE PARTICULARS ARE
        SET OUT IN SCHEDULE 1 (the “Buyer”),

        in connection with the intended distribution by the Vendor of certain
        cryptographic tokens known as “Universal Protocol Tokens” . . . in
        furtherance of the establishment and launch of the “Universal
        Protocol” project (the “Project”), which is being jointly developed by
        a coalition of cryptocurrency companies and blockchain pioneers
        known as the Universal Protocol Alliance (the “Project Group”). . . . 3

        On August 3, 2018, Uphold executed the first TSA with the Arrington

Companies. The TSA recitals stated that the “Parties” to the agreement were “the

Buyer” and “the Vendor.” The “Buyer” was identified as Arrington XRP (AXRP).

In Schedule 1 to the TSA, AXRP agreed to transfer $2 million to Uphold and, in

exchange, Uphold promised to transfer 250,000,000 digital tokens to AXRP at a

price of $0.008 per token.

        On September 4, 2018, Uphold executed a TSA with two Dekrypt

Companies. The TSA identified the “Buyer” as Dekrypt Master Fund L.P. Dekrypt

Capital LLC, the general partner of Dekrypt Master Fund, executed the agreement

on behalf of the limited partnership. The Dekrypt Companies agreed to transfer

3The TSAs do not identify the specific companies in this Project Group but the parties appear to
agree that Uphold’s subsidiaries fall within this group.

                                             -3-
No. 82606-9-I/4

$1 million to Uphold and, in exchange, Uphold promised to transfer 125,000,000

tokens to them.

          Finally, on October 24, 2018, Uphold executed a TSA with Dekrypt Ventures

I L.P., in which Uphold agreed to transfer 62,500,000 tokens to that Buyer in

exchange for $500,000.

          The TSA defined the “Vendor” as a yet-to-be formed “company incorporated

in Singapore to be named ‘Universal Protocol Pte. Ltd.’ (or if such name is

unavailable, such other similar name as determined by the Project Group).” It

provided that Uphold “is entering into this Agreement in the capacity of a proxy on

behalf of the Vendor prior to the Vendor’s incorporation with the intention that this

Agreement will be ratified by the Vendor after its Incorporation,” as allowed under

section 41 of Singapore’s Companies Act. Thieriot signed the TSAs on behalf of

Uphold, with Uphold signing on behalf of the yet-to-be incorporated company,

Universal.

          Central to this dispute is the TSA “Dispute Resolution” provision, section

7.12, which provides

          The Buyer and the Vendor shall cooperate in good faith to resolve
          any dispute or claim arising out of or in any way relating to this
          Agreement. If the Parties are unable to resolve such dispute or claim
          within 90 days, such dispute or claim shall be finally settled by
          arbitration, and judgment upon the award may be entered by any
          court having jurisdiction thereof or having jurisdiction over the
          relevant Party or its assets. The arbitration shall be conducted under
          the rules of the SIAC. 4 The arbitration tribunal shall consist of a sole
          arbitrator to be appointed by the President of the SIAC. The language
          of the arbitration shall be English.

4   The TSA defines the “SIAC” as the Singapore International Arbitration Centre.

                                                -4-
No. 82606-9-I/5

      Uphold moved to compel arbitration of the Buyers’ claims under section

7.12. The Buyers argued that only the “Vendor,” Universal—and not its proxy,

Uphold, nor any of its affiliated companies, officers or directors—could invoke the

arbitration clause of the TSA. The trial court denied Uphold’s motion on April 20,

2021. Uphold appeals.

                                    ANALYSIS

      Uphold challenges the trial court’s order denying its motion to compel

arbitration. We review this decision de novo. Satomi Owners Ass'n v. Satomi,

LLC, 167 Wn.2d 781, 797, 225 P.3d 213 (2009). The party opposing arbitration

bears the burden of showing that the agreement is not enforceable. Zuver v.

Airtouch Commc’ns, Inc., 153 Wn.2d 293, 302, 103 P.3d 753 (2004).

   A. The Federal Arbitration Act

      Uphold argues that the FAA governs the arbitrability of the Buyers’ claims.

We agree. The FAA provides:

      A written provision in . . . a contract evidencing a transaction involving
      commerce to settle by arbitration a controversy thereafter arising out
      of such contract or transaction, . . . shall be valid, irrevocable, and
      enforceable, save upon such grounds as exist at law or in equity for
      the revocation of any contract.

9 U.S.C. § 2. This section declares a national policy favoring arbitration of claims

that parties contract to settle in that manner. Satomi, 167 Wn.2d at 798. The effect

of this section is to create a body of federal substantive law of arbitrability,

applicable to any agreement within the coverage of the act. Id. Both state and

federal courts must enforce this body of law. Id.

                                        -5-
No. 82606-9-I/6

        The FAA applies to transactions involving economic activity in interstate

commerce. Id. at 799 (FAA applied to arbitration agreement between developers

and homeowner association for construction defect claims). The FAA applies to

the Buyers’ token sales because, like Satomi, the transactions involve interstate

commerce. AXRP is a Cayman Islands corporation. Dekrypt Master Fund and

Dekrypt Ventures are British Virgin Islands limited partnerships. They each agreed

to purchase “BTC,” defined as “bitcoin, the cryptographic token associated with the

Bitcoin cash blockchain.” Each designated a “Buyer Token Receiving Address” on

the “Ethereum blockchain” to which Uphold Ltd., a Cayman Islands limited liability

company, agreed to transfer the digital tokens. 5 The Ethereum blockchain is an

open source, decentralized platform on the Internet used to issue custom digital

assets. U.S. Sec. & Exch. Comm’n v. Kik Interactive, Inc., 492 F. Supp. 3d 169,

174 (S.D.N.Y. 2020). Virtual currencies, such as Bitcoin, are commodities in

interstate commerce. McDonnell, 287 F. Supp. at 228 (virtual currencies can be

regulated by the Commodities Futures Trading Commission). The nature of the

transactions here make the arbitration provision in the TSA subject to the FAA.

    B. Arbitrability under the FAA

        Under the FAA, arbitration is a matter of contract and courts must enforce

arbitration contracts according to their terms. Henry Schein, Inc. v. Archer & White

Sales, Inc., __ U.S. __, 139 S. Ct. 524, 529, 202 L. Ed. 2d 480 (2019); AT&T

5 Virtual currencies are generally defined as digital assets used as a medium of exchange.

Commodity Futures Trading Comm’n v. McDonnell, 287 F. Supp. 3d 213, 218 (E.D.N.Y. 2018).
They are stored electronically in digital wallets and exchanged over the Internet through a direct
peer-to-peer system. Id. They are often called “cryptocurrencies” because they use “cryptographic
protocols to secure transactions . . . recorded on publicly available decentralized ledgers,” called
“blockchains.” Id.

                                               -6-
No. 82606-9-I/7

Mobility LLC v. Concepcion, 563 U.S. 333, 344, 131 S. Ct. 1740, 179 L. Ed. 2d

742 (2011). But a party cannot be required to submit to arbitration any dispute

which it did not agree to resolve in that forum. AT&T Techs., Inc. v. Commc’ns.

Workers of Am., 475 U.S. 643, 648, 106 S. Ct. 1415, 89 L. Ed. 2d 648 (1986).

Thus, a court must resolve any issue that calls into question the validity or

applicability of an arbitration clause. Granite Rock Co. v. Int’l Bhd. of Teamsters,

561 U.S. 287, 297, 130 S. Ct. 2847, 177 L. Ed. 2d 567 (2010).

        The court’s role under the FAA is to determine (1) whether a valid

agreement to arbitrate exists, and (2) whether the agreement encompasses the

dispute at issue. Shivkov v. Artex Risk Solutions, Inc., 974 F.3d 1051, 1058 (9th

Cir. 2020). 6

        1. Existence of Valid Arbitration Agreement

        The parties agree that the TSA contains a valid arbitration clause, but

disagree as to who may benefit from that contractual provision. Uphold maintains

that all of the Uphold affiliated companies, as well as Thieriot and Schatt, can

compel arbitration, regardless of whether they signed the TSA, because the

arbitration agreement extends to all members of the Universal Protocol Alliance

“Project Group.” The Buyers, however, contend that the arbitration agreement

extends to only the “Parties” to the TSA, defined by contract as the “Buyer” and

the “Vendor,” Universal.

6The Third and Eighth Circuits apply the same test. See Sommerfeld v. Adesta, LLC, 2 F.4th 758,
761 (8th Cir. 2021); In re Remicade (Direct Purchase) Antitrust Litig., 938 F.3d 515, 519 (3rd Cir.
2019).

                                               -7-
No. 82606-9-I/8

       State law principles, and not—as Uphold argues—federal law, governs our

interpretation of paragraph 7.12 and our determination of who can invoke the right

to arbitration. In First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115

S. Ct. 1920, 131 L. Ed. 2d 985 (1995), the Supreme Court held that in deciding

whether parties have agreed to arbitrate, courts apply ordinary state law principles

governing the formation of contracts. In Arthur Andersen LLP v. Carlisle, 556 U.S.

624, 630, 129 S. Ct. 1896, 173 L. Ed. 2d 832 (2009), the Supreme Court reiterated

that the FAA does not “alter background principles of state contract law regarding

the scope of agreements (including the question of who is bound by them).” Thus,

whether Uphold is a “party” to the TSA entitled to compel arbitration and whether

the affiliated Uphold companies, Thieriot, and Schatt, as nonsignatories, may

invoke arbitration under the FAA are questions to be resolved by state contract

law.

       The next question is which state law to apply—the law of the forum state,

Washington, as the Buyers contend, or the law of Singapore, the parties’ choice of

law in their contract, as Uphold contends. Choice of law is a question of law that

we review de novo. Erwin v. Cotter Health Ctrs., 161 Wn.2d 676, 691, 167 P.3d

1112 (2007).

       The TSA includes a choice of law provision:

               Governing Law. This Agreement shall be governed in all
       respects, including as to validity, interpretation, and effect, by the
       Laws of Singapore, without giving effect to its principles or rules of
       conflict of laws, to the extent such principles or rules are not
       mandatorily applicable by statute and would permit or require the
       application of the Laws of another jurisdiction (emphasis added).

                                       -8-
No. 82606-9-I/9

“[I]n resolving disputes concerning choice of law the court need decide (1) whether

there is an actual conflict of laws and, if so, (2) whether the parties’ agreement’s

choice of law provision is effective.” Shanghai Commercial Bank Ltd. v. Kung Da

Chang, 189 Wn.2d 474, 480, 404 P.3d 62 (2017) (citing Erwin, 161 Wn.2d at 692).

“ ‘When parties dispute choice of law, there must be an actual conflict between the

laws or interests of Washington and the laws or interests of another state before

Washington courts will engage in a conflict of laws analysis.’ ” Id. at 480–81

(quoting Seizer v. Sessions, 132 Wn. 2d 642, 648, 940 P.2d 261 (1997)).

          We conclude that under either Singapore or Washington law, the answer is

the same—Uphold is a signatory and thus a party to the TSA and can compel

arbitration. The other affiliated Uphold companies, as well as Thieriot and Schatt,

may invoke the arbitration agreement under either Singapore’s third party

beneficiary statute or the Washington doctrine of equitable estoppel.

          First, under Singapore law, Uphold signed the TSA and is a party to that

agreement. The TSA recitals specifically refer to and incorporate by reference

section 41 of Singapore’s Companies Act (Chapter 50). 7 Under this statute,

          (1) Any contract or other transaction purporting to be entered into by
             a company prior to its formation or by any person on behalf of a
             company prior to its formation may be ratified by the company
             after its formation and thereupon the company becomes bound
             by and entitled to the benefit thereof as if it had been in existence
             at the date of the contract or other transaction and had been a
             party thereto.

          (2) Prior to ratification by the company the person or persons who
              purported to act in the name or on behalf of the company are, in
              the absence of express agreement to the contrary, personally
              bound by contract or other transaction and entitled to the benefit
              thereof (emphasis added).

7   Available at https://sso.agc.gov.sg/Act/CoA1967.

                                                -9-
No. 82606-9-I/10

Uphold signed the TSA on behalf of Universal, a company that Uphold had yet to

form. The Companies Act thus provides that Uphold, acting as Universal’s proxy

prior to its incorporation, is legally bound by, and entitled to any benefits set out in,

the TSA. Because Uphold is a party to the TSA by operation of law, the defined

party, “Vendor,” includes both Uphold and the yet-to-be formed corporation,

Universal. Under paragraph 7.12, Uphold has the right to compel arbitration as a

party to the TSA.

        Washington law is in accord. A promoter8 who signs a contract for the

benefit of a corporation that is not yet in existence is generally considered a party

to that agreement. Goodman v. Darden, Doman & Stafford Assocs., 100 Wn.2d

476, 478-79, 670 P.2d 648 (1983). This rule is based on the strong inference that

a person intends to make a present contract with an existing person. Id. at 479

(citing White & Bollard, Inc. v. Goodenow, 58 Wn.2d 180, 184, 361 P.2d 571

(1961)). Accordingly, “there may be multiple parties on one side of the contract

even though signed only in the name of the corporation.” White v. Dvorak, 78 Wn.

App. 105, 112, 896 P.2d 85 (1995).

        The Buyers knew that Universal had not yet been incorporated at the time

they entered into the contract and knew that Uphold was acting as Universal’s

“proxy.” Black’s Law Dictionary defines the term “proxy” as “[s]omeone who is

authorized to act as a substitute for another.” BLACK’S LAW DICTIONARY 1482 (11th

8 In the corporate context, a promoter is one who “forms a corporation and procures for it the rights,
instrumentalities and capital to enable it to conduct its business.” Goodman v. Darden, Doman &
Stafford Assocs., 100 Wn.2d 476, 478 n.2, 670 P.2d 648 (1983). Because Uphold undertook to
sell UPT tokens and raise capital “in furtherance of the establishment and launch of the ‘Universal
Protocol’ project,” Uphold is a promoter of Universal.

                                               - 10 -
No. 82606-9-I/11

ed. 2019). Uphold signed the TSA “for and on behalf of” Universal, and, prior to

Universal’s incorporation, evidencing the parties’ intent to allow Uphold to act as

the substitute for the “Vendor.” Thus, under Washington law, as under Singapore

law, Uphold is a party to the TSA as the promoter of a yet-to-be formed corporation

and is entitled to seek arbitration under paragraph 7.12 of the TSA.

        Second, the affiliated Uphold companies, Thieriot, and Schatt are similarly

entitled to invoke the arbitration provision of the TSA under both Singapore and

Washington law. Paragraph 7.11 of the TSA grants to Uphold, and its affiliates,

rights under Singapore’s third party beneficiary statute, Contracts (Rights of Third

Parties) Act (Chapter 53b). Under section 2(1) of that statute, “a person who is not

a party to a contract . . . may, in [his] own right, enforce a term of the contract if—

(a) the contract expressly provides that [he] may; or (b) . . . the term purports to

confer a benefit on [him].”9

        The TSA explicitly confers benefits on Uphold, as the proxy, and its affiliated

companies, officers and directors.               Section 6.1, entitled “DISCLAIMER,

LIMITATIONS, AND INDEMNITY” declares that “[n]either this agreement nor the

purchase of the Buyer Tokens provides the Buyer with any claim whatsoever with

respect to the Vendor, the Project Group, the Proxy, their respective Affiliates,

and/or their respective assets.”10 Section 6.2 requires the Buyers to indemnify and

hold harmless Universal, Uphold, their affiliates, and their respective officers and

directors for any claims resulting from any warranty made by the Buyers or any

9 Available at: https://sso.agc.gov.sg/Act/CRTPA2001.
10The Buyers characterize Uphold HQ, Uphold Inc., and Uphold Ltd. as affiliated entities in their
complaint.

                                             - 11 -
No. 82606-9-I/12

breach of agreement by Buyers. Schedule 3 to the TSA sets the limitations period

for any claims against Universal and Uphold to six months. And it disclaims all

liability of Universal and Uphold for any consequential damages. These provisions

trigger section 2(1) of Singapore’s Contracts (Rights of Third Parties) Act.

       Section 9(1) of that same statute provides

       [w]here a right under section 2 to enforce a term (called in this section
       the substantive term) is subject to a term providing for the submission
       of disputes to arbitration . . . the third party is treated for the purposes
       of the Arbitration Act 2001 or the International Arbitration Act 1994
       (as the case may be) as a party to the arbitration agreement as
       regards disputes between [himself] and the promisor relating to the
       enforcement of the substantive term by the third party.

Here, the Buyers seek to rescind the TSA, which would nullify the contractual

benefits conferred on the nonsignatory affiliated entities, officers and directors.

Paragraph 7.12 provides that all disputes “arising out of” or “in any way relating to”

the TSA must be arbitrated.          This broad language makes the third party

beneficiaries’ right to enforce the TSA subject to the arbitration provision. Again,

by operation of Singapore law, as referenced in the TSA itself, the Uphold affiliated

companies, Thieriot, and Schatt, are all parties to the TSA for purposes of

enforcing rights conferred on them under the agreement, including the right to

invoke the arbitration clause to resolve disputes with the Buyers.

       Even if Singapore law does not govern, Washington law leads us to the

same result. Several traditional principles of state law allow a contract to be

enforced by or against nonparties. Arthur Andersen, 556 U.S. at 631. One such

principle is equitable estoppel. Id.; GE Energy Power Conversion France SAS,

                                          - 12 -
No. 82606-9-I/13

Corp. v. Outokumpu Stainless USA, LLC, __ U.S. __, 140 S. Ct. 1637, 1644, 207

L. Ed. 2d 1 (2020).

      Equitable estoppel precludes a party from claiming the benefits of a contract

while simultaneously attempting to avoid the burdens that the contract imposes.

Townsend v. Quadrant Corp., 173 Wn.2d 451, 461, 268 P.3d 917 (2012) (citations

omitted). In David Terry Investments, LLC-PRC v. Headwaters Development.

Group Limited Liability Company, 13 Wn. App. 2d 159, 171, 463 P.3d 117 (2020),

Division Three of this court held that “the equitable estoppel doctrine applies when

a party has signed an agreement to arbitrate but attempts to avoid arbitration by

suing nonsignatory defendants for claims that are ‘based on the same facts and

are inherently inseparable’ from arbitrable claims against signatory defendants.”

Id. (quoting Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757

(11th Cir. 1993)). Courts applying equitable estoppel against a signatory have

looked to whether the claims the nonsignatory sought to arbitrate were “intimately

founded in and intertwined with the underlying contract obligations.” Id. (quoting

Choctow Generation Ltd. P’ship v. Home Assur. Co., 271 F3d 406 (2d Cir. 2001)).

      Here, as in David Terry, the Buyers, who are all signatories to the TSA,

brought suit against nonsignatories, the Uphold affiliated companies, Thieriot, and

Schatt, based on the same facts and seeking the same relief as the claims they

assert against Uphold, a signatory defendant. The Buyers’ claims for violation of

the WSSA and negligent misrepresentation are inherently tied to their agreement

for the purchase of cryptocurrency tokens. The Buyers’ claims necessarily turn on

the construction of the contract and representations allegedly made by Uphold,

                                       - 13 -
No. 82606-9-I/14

Thieriot, and Schatt, in their respective roles promoting the TSA. And a resolution

of these claims will require resolution of contract defenses Uphold and its affiliates

may have. Because the Buyers’ claims and Uphold’s defenses are founded in and

intertwined with the underlying contract, we conclude the Buyers are equitably

estopped from circumventing the arbitration provision in the TSA.

       The Buyers argue that Singapore law does not govern because the TSA

choice of law provision is invalid under Ito Int’l Corp. v. Prescott, Inc., 83 Wn. App.

282, 921 P.2d 566 (1996). In that case, a Japanese general partnership, formed

to operate a building in downtown Seattle, marketed the building for sale. Id. at

285. It sold shares in the building to 36 investors, mostly Japanese individuals and

to a Japanese-owned Washington corporation.             The partnership agreement

provided that the entity had been formed under, and was to be regulated by,

Japanese law. It excluded the application of Washington partnership law but

selected Washington law to apply to any issues concerning title to the real

property. Id. at 287-88.

       A group of investors sued under the WSSA and the trial court ruled that the

investors’ partnership interests were not securities under that statute. Id. at 288.

The parties agreed that if Japanese law applied, the general partnership was not

a security. Id. The investors argued on appeal that the choice of Japanese law in

the partnership agreement was invalid under the WSSA.             Id. at 288.    RCW

21.20.430(5) renders void any contract provision waiving compliance with the

WSSA.     Because it deemed the choice of law provision to be a waiver of

compliance with the WSSA, the court refused to enforce that clause and instead

                                        - 14 -
No. 82606-9-I/15

conducted an independent choice of law analysis. Id. It concluded that while both

Washington and Japan had significant contacts with the transaction at issue, public

policy favored the application of Washington law because Washington residents

were involved in the sale, Ito was a Washington corporation, and the property was

located here. Id. at 290.

       We cannot conclude, on the briefing before us, that the TSA choice of

Singapore law constitutes a waiver of compliance with the WSSA. Neither party

has briefed whether digital currency sales are considered the sale of securities

under Singapore law. Moreover, Ito did not involve the validity of a choice of law

provision in the context of interpreting an arbitration agreement. The Buyers here

conflate the validity of a choice of law provision for interpreting an agreement, with

the validity of a choice of law provision that may result in a waiver of a state

statutory claim, such as the WSSA, and thereby violate the WSSA’s anti-waiver

provision. It is the former issue we confront, not the latter.

       Under the FAA, if a dispute is arbitrable, the law governing the merits of

such a dispute must be resolved by the arbitrators, not this court. See Vimar

Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 540, 115 S. Ct.

2322, 132 L. Ed. 2d 462 (1995) (under the FAA, the arbitrators—and not the

courts—decide, in the first instance, what law they will apply to particular claims);

PacifiCare Health Sys., Inc. v. Book, 538 U.S. 401, 123 S. Ct. 1531, 155 L. Ed. 2d

578 (2003) (issue of whether plaintiffs can recover treble damages under the

Racketeer Influenced and Corrupt Organizations Act in arbitration is not ripe on

motion to compel arbitration); Zuver v. Airtouch Commc’ns, Inc., 153 Wn.2d 293,

                                        - 15 -
No. 82606-9-I/16

103 P.3d 753 (2004) (validity of attorney fee provision in agreement to be

determined by arbitrator, not the court). The Buyers are free to argue to the

arbitrator that any provision waiving compliance with the WSSA is invalid, just as

the investors did in Ito.

       We conclude that under either Singapore or Washington law, the Uphold

Companies, Thieriot, and Schatt may compel arbitration of the Buyers’ claims. 11

       2. Arbitrability of Buyers’ WSSA and Negligent Misrepresentation Claims

       Uphold contends, and the Buyers appear to concede, that the arbitration

agreement encompasses their WSSA and misrepresentation claims. We agree.

       Whether a particular dispute is arbitrable appears to be a question of federal

law. In Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25,

103 S. Ct. 927, 74 L. Ed.2d 765 (1983), the Supreme Court stated that generally,

“as a matter of federal law, any doubts concerning the scope of arbitrable issues

should be resolved in favor of arbitration.” The Eighth and Ninth Circuits, relying

on Moses H. Cone, have held that whether a particular claim is arbitrable is

governed by federal substantive law on arbitration, including a presumption in favor

of arbitration. Donaldson Co. v. Burroughs Diesel, Inc., 581 F.3d 726, 731 (8th

Cir. 2009); Shivkov, 974 F.3d at 1058-59; Benson v. Casa de Capri Enters., LLC,

980 F.3d 1328, 1330–31 (9th Cir. 2020).

       This court has also recognized that the arbitrability of specific claims is a

matter of federal law under the FAA. In Kamaya Co., v. American Property

11The Buyers also argue that we should not rely on Singapore law because both parties briefed
their arguments below and on appeal on the assumption that Washington law controls the issue.
Because we conclude the resolution would be the same under either Singapore or Washington law,
we need not decide whether Uphold waived the application of foreign law.

                                           - 16 -
No. 82606-9-I/17

Consultants, Ltd., 91 Wn. App. 703, 959 P.2d 1140 (1998), a group of investors in

a Japanese real estate partnership appealed an order compelling them to arbitrate

their fraud-in-the-inducement claim. Id. at 707. The investors argued that fraud

claims were not arbitrable under Japanese law, the parties’ choice of law in the

agreement. Id. This court rejected that argument, holding that under Becker

Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH, 585 F.2d 39 (3rd Cir. 1978),

federal law under the FAA, and not Japanese law, governed whether the claim

was arbitrable. We stated that while contractual choice of law provisions are

ordinarily valid under the FAA, “it is axiomatic that courts must have some law to

apply when determining whether the parties agreed to arbitrate a particular

dispute. The FAA provides courts with this necessary analytical framework.” Id.

at 713. We held that “whether a particular dispute is within the class of those

disputes governed by the arbitration and choice of law clause is a matter of federal

law.” Id. (quoting Becker, 585 F.2d at 43). In applying federal law, this court

concluded that under the FAA, the investors’ fraud claim was arbitrable. 12 Id. at

718.

        We conclude that the Buyers’ WSSA and negligent misrepresentation

claims are arbitrable. Under federal arbitration law, causes of action premised on

statutory rights are subject to contractual arbitration agreements just as are claims

12 In re Remicade (Direct Purchaser) Antitrust Litig., 938 F.3d 515, 520 (3rd Cir. 2019), the Third
Circuit explicitly abrogated Becker, the case on which Kamaya relied, and held that federal
substantive law, including the presumption in favor of arbitration, applies only when state
interpretative principles do not dictate a clear outcome or when the FAA preempts a state law
prohibiting the arbitration of certain claims or transactions. It applies state law to interpret the scope
of an arbitration clause to determine a particular claim’s arbitrability. Id. at 522. Given that the
Ninth Circuit relies on federal law and Kamaya is consistent with this line of federal cases, we will
follow Kamaya here.

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No. 82606-9-I/18

under the common law. Kilgore v. KeyBank, Nat’l Ass'n, 673 F.3d 947, 955 (9th

Cir. 2012), on reh'g en banc, 718 F.3d 1052 (9th Cir. 2013).

       The Buyers contend that forcing them to resolve their WSSA claim via

arbitration in Singapore violates Washington public policy.         We reject this

argument. In Garmo v. Dean, Witter, Reynolds, Inc., 101 Wn.2d 585, 590, 681

P.2d 253 (1984), our Supreme Court held that WSSA claims are arbitrable under

the FAA. This binding precedent settled any contention that a party cannot agree

to arbitrate this statutory claim.

       The Buyers suggest it would be unfair to force them into a proceeding

thousands of miles from Washington. The Buyers provide no authority for this

proposition. In Yei A. Sun v. Advanced China Healthcare, Inc., 901 F.3d 1081,

1090 (9th Cir. 2018), the Ninth Circuit held that a forum-selection clause in a stock

purchase agreement, designating California state courts as the forum for any

litigation, applied to claims arising under the WSSA and did not violate the public

policy of this state. We agree. If it does not violate Washington public policy to

require parties to arbitrate WSSA claims, and does not violate Washington public

policy to require parties to litigate such claims in an out-of-state forum, we see no

public policy violation in allowing an international arbitration organization to

address the Buyers’ WSSA claims.

       Moreover, while the TSA specifies the rules governing the arbitration (those

of the Singapore International Arbitration Centre), the number of arbitrators (one),

and the language in which the proceeding will be conducted (English), it does not

require that the seat of the arbitration be Singapore. Under Rule 21 of the SIAC

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No. 82606-9-I/19

Rules of Arbitration, the parties may select the seat of the arbitration and, in the

absence of such an agreement, the arbitrator will select the location for the

proceedings. 13 There is nothing in the TSA that requires the Buyers to travel to

Singapore to arbitrate their WSSA and negligent misrepresentation claims.

           We conclude that the TSA’s arbitration provision requires the Buyers to

arbitrate their claims against Uphold, its affiliated companies, Thieriot and Schatt.

We remand for entry of an order compelling arbitration.

      C. Attorney Fees

           Uphold argues that it is contractually entitled to attorney fees and costs for

having to compel arbitration. It relies on section 6.2 of the TSA which provides:

           The Buyer shall defend, indemnify, and hold harmless the Vendor,
           the Proxy, the Project Group, their Affiliates, and their respective
           officers, directors, employees, agents, successors and assigns
           (collectively the ‘Indemnified Persons’) from and against, and pay or
           reimburse the Indemnified Persons for a breach or any claim, any
           and all losses resulting from: (a) any inaccuracy in or breach of any
           representation or warranty when made or deemed made by the
           Buyer in or pursuant to this Agreement; or (b) any willful or negligent
           breach of or default in performance by the Buyer under this
           Agreement.

Uphold interprets this provision as requiring the Buyers to indemnify them for any

legal fees it incurred to litigate the arbitrability of the Buyers’ claims. But under the

specific language of paragraph 6.2, Uphold is entitled to such a recovery only if it

proves that the Buyers breached a representation or warranty or that the Buyers

breached or defaulted in performance under the TSA. Arguably, the Buyers’ failure

to accede to Upholds’ demand for arbitration could be deemed a breach of the

TSA. But it is not a claim we can adjudicate here as that claim is also subject to

13   https://www.siac.org.sg/our-rules/rules/siac-rules-2016 (last visited January 3, 2022).

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No. 82606-9-I/20

arbitration and should be resolved in that forum. We decline to reach the issue of

Uphold’s entitlement to an award of legal fees.

        We award Uphold its costs as the prevailing party on appeal under RAP

14.2.

        Reversed and remanded for entry of an order compelling arbitration.

WE CONCUR:

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