PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

CENTRAL WEST VIRGINIA ENERGY, 

INC.,

Plaintiff-Appellant,  No. 10-1706

v.

BAYER CROPSCIENCE LP,

Defendant-Appellee. 

Appeal from the United States District Court

for the Eastern District of Virginia, at Richmond.

Henry E. Hudson, District Judge.

(3:10-cv-00093-HEH)

BAYER CROPSCIENCE LP, 

Plaintiff-Appellee,

v.  No. 10-1934 CENTRAL WEST VIRGINIA ENERGY,

INC.,

Defendant-Appellant. 

Appeal from the United States District Court

for the Southern District of West Virginia, at Charleston.

Joseph R. Goodwin, Chief District Judge.

(2:10-cv-00348)

Argued: May 10, 2011

Decided: July 14, 2011
Before GREGORY and DUNCAN, Circuit Judges,

and HAMILTON, Senior Circuit Judge.

Affirmed by published opinion. Judge Duncan wrote the opinion, in which Judge Gregory and Senior Judge Hamilton

joined. 

COUNSEL

ARGUED: Robert D. Luskin, PATTON BOGGS, LLP,

Washington, D.C., for Appellant. Bruce E. Stanley, REED

SMITH, LLP, Pittsburgh, Pennsylvania, for Appellee. ON

BRIEF: Benjamin G. Chew, Andrew Zimmitti, Haven G.

Ward, PATTON BOGGS, LLP, Washington, D.C., for Appellant. Colin E. Wrabley, REED SMITH, LLP, Pittsburgh,

Pennsylvania; S. Miles Dumville, REED SMITH, LLP, Richmond, Virginia, for Appellee. 

OPINION

DUNCAN, Circuit Judge:

In this consolidated appeal, Central West Virginia Energy

("CWVE") appeals the judgments of the United States District

Courts for the Eastern District of Virginia and the Southern

District of West Virginia. CWVE challenges the determinations of both district courts that a Charleston, West Virginia

arbitration panel (the "Charleston Panel") properly considered

the validity of a 2008 agreement between CWVE and Bayer

Cropscience LP ("Bayer"). Applying the highly deferential

standard of review due arbitration awards, we find that the

Charleston Panel did not exceed its powers. Accordingly, we

affirm.

2 CENTRAL WEST VIRGINIA ENERGY v. BAYER
I.

The relevant facts are not in dispute. This case centers on

the interplay between two agreements containing competing

arbitration provisions. A 1997 agreement between CWVE and

Bayer mandated arbitration in West Virginia; a 2008 agreement sited it in Virginia. Some factual background provides

helpful context for the parties’ dispute.

A.

Bayer operates an industrial park in Kanawha County,

West Virginia. In 1997, Bayer’s predecessor entered into a

coal supply agreement (the "1997 Agreement") with CWVE,

a subsidiary of Massey Energy Company, under which

CWVE agreed to supply coal to the industrial park at a certain

price for a term of two years. The 1997 Agreement provided

that it could be extended for successive one-year terms if the

parties agreed upon a new price. Significantly for our purposes, the 1997 Agreement also contained an arbitration

clause providing that "[a]ll disputes under th[e] Agreement"

would be referred to an arbitration panel in Charleston, West

Virginia, and would be conducted under the rules of the

American Arbitration Association ("AAA"). J.A. 47.

The parties extended the 1997 Agreement several times

between 1997 and 2006. They disagree as to whether a series

of emails between company representatives in 2006 effectuated a valid extension of the Agreement through the end of

2008.

In the spring of 2008, CWVE informed Bayer that it was

not sure if the 2006 extension of the 1997 Agreement was

valid, and a protracted debate ensued. In July 2008, in the

midst of this uncertainty, a Bayer representative signed a new

contract with CWVE to receive coal at an increased price

through 2010 (the "2008 Agreement"). The 2008 Agreement

provided for the arbitration of disputes "arising out of or relatCENTRAL WEST VIRGINIA ENERGY v. BAYER 3
ing to this contract or the breach hereof" in Richmond, Virginia. J.A. 62. It specified that the AAA’s Commercial

Arbitration Rules would apply and that the parties would each

appoint one arbitrator, who would together select a third arbitrator. It also contained a merger clause stating that it set forth

the entire agreement between the parties and "any prior agreements . . . relating to such transactions [were] merged into and

super[s]eded by this Agreement." Id. at 61.

Bayer began paying CWVE the higher price specified in

the 2008 Agreement, but did so under protest. Bayer maintained that the 1997 Agreement remained in effect, and that

the 2008 Agreement was invalid.

B.

The parties’ disagreement led to litigation and arbitration in

several fora, although only some of those proceedings are relevant here. On December 5, 2008, Bayer filed a claim for

arbitration in Charleston, West Virginia, under the 1997

Agreement. Bayer sought a determination that the extension

of the 1997 Agreement was valid and requested damages in

the amount of $12 million incurred in purchasing coal at the

higher price set by the 2008 Agreement. Bayer explained that

it only paid the higher price to cover its obligations because

CWVE threatened to stop delivery of coal if it refused to do

so.

On March 30, 2009, CWVE filed a demand for arbitration

before a panel convened in Richmond, Virginia (the "Richmond Panel") under the 2008 Agreement. It also moved the

Charleston Panel to dismiss its arbitration proceedings, arguing that Richmond was the proper venue because the 2008

Agreement governed the dispute.1 The Charleston Panel

1After CWVE filed its arbitration demand against Bayer in Virginia,

Bayer filed a complaint in the Circuit Court of Kanawha County, West

Virginia, seeking a declaration that the West Virginia arbitration should go

forward and the Virginia arbitration should not. The state court dismissed

that action upon determining that the parties’ entire dispute belonged in

arbitration. 

4 CENTRAL WEST VIRGINIA ENERGY v. BAYER
denied this motion on the ground that "adequate facts ha[d]

been alleged . . . to support a viable claim under the terms of

the 1997 Agreement." J.A. 107.

During an arbitration hearing held in Charleston on

November 9 through 12, 2009, CWVE continued to challenge

the jurisdiction of the Charleston Panel to consider the 2008

Agreement. Alternatively, CWVE argued that if the Charleston Panel found that the 1997 Agreement had been extended

through 2008, it was nevertheless terminated by the 2008

Agreement, which "superseded all prior agreements by virtue

of its merger clause." J.A. 196.

On February 11, 2010, the Charleston Panel issued a Reasoned Award concluding that the parties had extended the

1997 Agreement through 2008. In rejecting CWVE’s argument that the Charleston Panel should await and defer to the

Richmond Panel’s interpretation of the 2008 Agreement, the

Charleston Panel explained that the validity of the 2008

Agreement was squarely before it:

Nowhere in CWVE’s extensive and impressive

briefing in this case does it deal with its ambivalent,

if not contrary, positions that it has directly interposed the July 2008 Agreement as a bar to any

recovery by [Bayer] under the [1997 Agreement’s]

extension, yet [simultaneously] suggest[s] that the

Panel cannot consider its validity or enforceability.

The short answer to this argument is that CWVE has

clearly ple[d] and argued the validity of the July

2008 Agreement throughout this proceeding. By

doing so, it has placed that issue squarely before the

Panel for a decision as to whether it bars enforcement of the [1997 Agreement’s] extension, and it has

waived its right to withdraw that aspect of the case

from the jurisdiction of the Panel.

J.A. 303 (footnote omitted).

CENTRAL WEST VIRGINIA ENERGY v. BAYER 5
The Charleston Panel found that the 2008 Agreement "operated as a glaring breach" of the 1997 Agreement’s extension, was formed under a mutual mistake of fact, and failed

to meet the Uniform Commercial Code’s requirements of

good faith and fair dealing. J.A. 310-12. Accordingly, the

Panel deemed the 2008 Agreement void and awarded Bayer

stipulated damages in the amount of $10,540,885.07 plus fees.

The following month, on March 19, 2010, the Richmond

Panel issued an order staying its proceedings "in light of the

Reasoned Award dated February 11, 2010, of the Charleston

Panel and the disposition made therein of issues common to

this Arbitration now pending between the same parties involving the same transactions . . . ." J.A. 402. The parties reported

at oral argument that proceedings in front of the Richmond

Panel remain stayed pending resolution of this appeal.

C.

The dispute between the parties continued along dual

tracks. On February 16, 2010, CWVE filed a petition in district court in Virginia seeking to vacate a portion of the

Charleston Panel’s award.2 In response, Bayer filed a motion

to dismiss in that forum. On March 17, 2010, Bayer filed an

action in district court in West Virginia to enforce the panel

award. CWVE moved to dismiss or stay the West Virginia

action pending resolution of the related Virginia case.

In Virginia, CWVE asked the district court to vacate that

portion of the Charleston Panel’s arbitration award addressing

the 2008 Agreement, renewing its argument that the 2008

Agreement’s validity could be determined only by the Richmond Panel. The Virginia district court disagreed. It held that

the issue of which arbitration panel should consider the 2008

2CWVE did not seek to vacate the portion of the Charleston Panel’s

award unaffected by the validity of the 2008 Agreement and paid Bayer

that portion of the award, $2,391,390.16. 

6 CENTRAL WEST VIRGINIA ENERGY v. BAYER
Agreement was a procedural question for the Charleston

Panel to resolve. It therefore granted Bayer’s motion to dismiss the petition on June 2, 2010, and CWVE appealed.

As a result of the Virginia district court’s ruling, the district

court in West Virginia denied as moot CWVE’s motion to

dismiss or stay Bayer’s action pending resolution of the Virginia action. It then turned to the parties’ cross-motions for

summary judgment. The West Virginia district court agreed

with its Virginia counterpart that the Charleston Panel did not

exceed its powers by adjudicating the validity of the 2008

Agreement. The West Virginia district court found that "the

dispute was properly submitted to arbitration under the terms

of the [1997] Agreement," and that "determining the validity

of the 2008 Agreement was necessary to the adjudication of

the contract dispute." J.A. 444. It granted summary judgment

to Bayer, and this consolidated appeal followed.

II.

CWVE argues that both the Virginia and West Virginia district courts erred in finding that the Charleston Panel did not

exceed its powers under the Federal Arbitration Act ("FAA")

by adjudicating the validity of the 2008 Agreement. CWVE

contends that the Virginia district court erroneously held that

the Charleston Panel’s jurisdiction over the 2008 agreement

was a "procedural" issue properly left to the panel’s discretion. It further argues that the West Virginia district court

erred in upholding the Charleston Panel’s rationale for exercising jurisdiction over the 2008 agreement. We review these

legal challenges, brought under § 10(a)(4) of the FAA, 9

U.S.C. § 10(a)(4), de novo. MCI Constructors, LLC v. City of

Greensboro, 610 F.3d 849, 857 (4th Cir. 2010).

The FAA stands as "a congressional declaration of a liberal

federal policy favoring arbitration agreements." Moses H.

Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1,

24 (1983). Its "primary purpose . . . is to ensure that private

CENTRAL WEST VIRGINIA ENERGY v. BAYER 7
agreements to arbitrate are enforced according to their terms."

Stolt-Nielsen S.A. v. Animalfeeds Int’l Corp., 130 S. Ct. 1758,

1773 (2010) (internal quotations omitted). In interpreting such

agreements, we resolve "any doubts concerning the scope of

arbitrable issues . . . in favor of arbitration." Moses H. Cone,

460 U.S. at 24-25; see also Levin v. Alms & Assocs., Inc., 634

F.3d 260, 266 (4th Cir. 2011).

Section 10(a)(4) permits a court to set aside an arbitration

award "where the arbitrators exceeded their powers, or so

imperfectly executed them that a mutual, final, and definite

award upon the subject matter submitted was not made." 9

U.S.C. § 10(a)(4). However, our review of an arbitration

panel’s decision under this provision is "substantially circumscribed." MCI Constructors, 610 F.3d at 857. A challenging

party 

must clear a high hurdle. It is not enough . . . to show

that the panel committed an error—or even a serious

error. It is only when an arbitrator strays from interpretation and application of the agreement and effectively dispenses his own brand of industrial justice

that his decision may be unenforceable [under

§ 10(a)(4)].

Stolt-Nielsen, 130 S. Ct. at 1767 (internal alterations, quotations, and citations omitted). With this demanding standard in

mind, we turn first to the decision of the Virginia district

court.

A.

CWVE argues that, contrary to the Virginia district court’s

conclusion, the issue of which panel should consider the 2008

Agreement’s validity is not a "procedural" one for arbitral resolution, but rather a jurisdictional question that must be

decided by the court in the first instance as a matter of "arbitra8 CENTRAL WEST VIRGINIA ENERGY v. BAYER
bility."3

 CWVE contends that the Supreme Court’s decision in

Stolt-Nielsen, 130 S.Ct. at 1758, narrowed the range of questions that can be labeled as "procedural" to an extent that controls the outcome here. In addressing this argument, we first

consider the development of the distinction between questions

of arbitrability and procedure. We then apply this framework

to the question at hand.

1.

In Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83

(2002), the Supreme Court recognized an exception to the

federal policy in favor of arbitration agreements: "[t]he question whether the parties have submitted a particular dispute to

arbitration, i.e., the question of arbitrability, is an issue for

judicial determination unless the parties clearly and unmistakably provide otherwise." Id. (internal alterations and quotations omitted). Howsam made clear, however, that not every

"potentially dispositive gateway question" is one of arbitrability. Id. Rather, questions of arbitrability are limited to 

the kind of narrow circumstance where contracting

parties would likely have expected a court to have

3CWVE also claims that the distinction between questions of arbitrability and procedure applies only at the stage of pre-award challenges, but

has no import at the stage of a post-award challenge under § 10(a)(4), such

as this one, because "the distinction whether a challenge to an arbitrator’s

jurisdiction is ‘procedural’ or ‘substantive’ . . . is irrelevant once an award

is rendered." Appellant’s Br. at 42. It cites no case law in support of this

position, which we find unpersuasive. 

The determination of whether a particular issue was for arbitral or judicial resolution is of critical importance to our determination, under

§ 10(a)(4), of whether the arbitration panel exceeded its powers in considering the issue. Indeed, Stolt-Nielsen, one of the primary cases on which

CWVE relies, utilized the procedural/substantive distinction when reviewing an award under § 10(a)(4), thereby undermining CWVE’s argument

that the distinction should not be applied during review under this provision. See 130 S. Ct. at 1775-76. 

CENTRAL WEST VIRGINIA ENERGY v. BAYER 9
decided the gateway matter, where they are not

likely to have thought that they had agreed that an

arbitrator would do so, and, consequently, where reference of the gateway dispute to the court avoids the

risk of forcing parties to arbitrate a matter that they

may well not have agreed to arbitrate.

Id. at 83-84. Other "procedural questions which grow out of

the dispute and bear on its final disposition are . . . for an arbitrator [ ] to decide." Id. at 84 (internal quotations omitted).

Applying these rules, the Court concluded that the question

presented in Howsam of whether the dispute was ineligible

for arbitration because it was more than six years old was procedural in nature and therefore appropriate for arbitral resolution. Id. at 85.

In Dockser v. Schwartzberg, 433 F.3d 421 (4th Cir. 2006),

we considered whether a party to an undisputedly binding

arbitration agreement could compel litigation on the issue of

whether one arbitrator or three should preside in light of Howsam’s guidance. See id. at 423. We concluded that "the question of the number of arbitrators [was] one of arbitration

procedure, and that the parties’ agreement [did] nothing to

overcome the presumption that such questions are for arbitral,

rather than judicial, resolution." Id. at 425.4 As we explained,

it would eviscerate the liberal federal policy favoring arbitration if "parties to a concededly binding arbitration agreement

were nonetheless able to hale one another into court to contest

even the most minor of issues regarding their arbitration." Id.

at 428.

2.

Under the framework established by Howsam and Dockser,

4Dockser also stated, more generally, that a court should involve itself

in an arbitration dispute "only when there is a question regarding whether

the parties should be arbitrating at all." Id. at 426 (emphasis added). 

10 CENTRAL WEST VIRGINIA ENERGY v. BAYER
we find that the issue here—whether the Charleston Panel or

the Richmond panel should have decided the 2008 Agreement’s validity—is procedural in nature. CWVE tries to characterize the instant dispute as one of arbitrability by arguing

that it involves the "jurisdiction" of the panels. This argument

is unavailing because, as we explain below, a dispute implicating the overlapping jurisdiction of two arbitration panels is

not a matter of arbitrability that necessitates resolution by a

court.

As Howsam makes clear, delineating an issue as either one

of arbitrability or one of procedure serves the goal of preserving the former for judicial resolution. CWVE largely concedes the argument that it presents a question of arbitrability

by asserting not that a court should decide the 2008 Agreement’s validity, but merely that a different arbitration panel

should consider it.5 Its argument therefore does not implicate

whether to proceed by arbitration, but which arbitration panel

should decide certain issues. CWVE’s contention is far more

akin to a venue dispute than a question of arbitrability, and,

as such, it is appropriate for arbitral resolution.

Here, as in Howsam, we do not risk "forcing parties to arbitrate a matter that they may well not have agreed to arbitrate,"

537 U.S. at 84, by allowing the Charleston Panel to determine

which issues it, as opposed to the Richmond Panel, should

consider. By agreeing to have their entire dispute heard by

arbitrators, CWVE and Bayer chose to remove the courts

from such threshold disputes over how their arbitration should

proceed. See Dockser, 433 F.3d at 428.

5CWVE makes much of the fact that the 1997 Agreement only provided

for arbitration of disputes "under" that agreement, whereas the 2008

Agreement provided for arbitration of disputes "arising out of or related

to" the 2008 Agreement. CWVE agrees, however, that it intended for the

validity of both agreements to be determined between the two arbitration

panels. 

CENTRAL WEST VIRGINIA ENERGY v. BAYER 11
Moreover, it is worthy of note that CWVE has received

precisely what it contracted for: the question of the validity of

the 2008 Agreement remains pending before the very Richmond arbitration panel that CWVE argues should resolve it.

The fact that the Charleston Panel deemed it necessary to consider the 2008 Agreement’s validity in determining whether

the 1997 Agreement remained in force may raise the question

of whether that panel was impermissibly dispensing its own

brand of industrial justice, a question to which we shortly

turn, but it does not convert the parties’ venue dispute into

one of arbitrability. To the contrary, our duty to give primacy

to the parties’ intent and to resolve doubts in favor of arbitration reinforces our conclusion that the arbitrators, not the

courts, should determine this gateway issue. See Stolt-Nielsen,

130 S. Ct. at 1773; Moses H. Cone, 460 U.S. at 24-25.

3.

CWVE attempts to avoid this conclusion by arguing that

the Supreme Court’s recent decision in Stolt-Nielsen changes

the contours of the procedural/arbitrability distinction to such

an extent as to impact our analysis. We disagree.

Stolt-Nielsen involved a dispute over whether a party who

had agreed to submit a certain issue to bilateral arbitration

could be compelled to submit to class-action arbitration of the

same issue. The Supreme Court held that the arbitration panel

"exceeded its powers" in finding that the parties’ silence on

the matter of class arbitration amounted to consent.6Id. at

1770. It explained that it would not defer to the arbitrators’

view because consent to class arbitration did not fall within

Howsam’s category of "procedural" questions. It found con6Unlike the instant dispute, the Court in Stolt-Nielsen was not faced

with the issue of whether the arbitration panel had properly considered the

issue before it, because the parties executed a supplemental agreement that

"expressly assigned th[at] issue to the arbitration panel." 130 S. Ct. at

1772. 

12 CENTRAL WEST VIRGINIA ENERGY v. BAYER
sent to class-arbitration not to be a procedural matter because

the class-action construct wreaks "fundamental changes" on

the "nature of arbitration." Id. at 1775-76. Specifically, it

observed that class-action arbitration alters the rules of confidentiality and privacy, adjudicates the rights of absent parties,

and raises the commercial stakes of arbitration. Id. at 1776.

According to CWVE, Stolt-Nielsen stands for the proposition that "courts must intervene under the FAA to enforce the

parties’ intent as to who should resolve their disputes." Appellant’s Reply Br. at 9. CWVE reads Stolt-Nielsen too broadly.7

Although Stolt-Nielsen found that the particular question of

whether parties had "agreed to authorize class arbitration"

was not one of procedure, it reaffirmed the Court’s view that

many threshold questions do fall into the procedural category.

Id. at 1776. Citing Howsam, it explained that by entering an

arbitration agreement, parties "implicitly authorize the arbitrator to adopt such procedures as are necessary to give effect to

the parties’ agreement." Id. at 1775. This authorization allows

the arbitrator to supply those terms "essential to a determination of [the parties’] rights and duties," id. (internal marks

omitted), so long as the arbitrator does not, in the process,

7CWVE also contends that Stolt-Nielsen overruled Dockser insofar as

Dockser stated that only questions of whether to arbitrate "at all" are for

a court to decide. See Dockser, 433 F.3d at 426. CWVE extrapolates this

view from the fact that Stolt-Nielsen held that the question of consent to

class arbitration, which does not implicate whether to arbitrate at all, was

not a procedural question. We note, however, that Stolt-Nielsen also specifically declined to address whether it was for a court or an arbitrator to

decide the issue of consent to class arbitration, noting that the parties had

agreed to arbitrate the question. See 130 S. Ct. at 1772 (finding that the

Court "need not revisit" the question of whether its previous judgment in

Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003), "requires an

arbitrator, not a court, to decide whether a contract permits class arbitration"). Thus, Stolt-Nielsen did not directly contradict Dockser, and, as a

subsequent panel, we may not lightly infer that a prior panel decision has

been overruled. In any event, the statement in Dockser with which CWVE

takes issue is not necessary to our holding. 

CENTRAL WEST VIRGINIA ENERGY v. BAYER 13
commit the parties to a fundamentally different type or category of arbitration which they have not "agreed to authorize."

Id. at 1776.

The issue before us does not transgress the limits of StoltNielsen’s guidance. CWVE expressly "agreed to authorize"

arbitration in both West Virginia and Virginia. As a result, its

entire disagreement with Bayer is properly in arbitration; it

contests only by whom the validity of the 2008 Agreement

should be arbitrated in the first instance. The Stolt-Nielsen

Court viewed the class-action mechanism contemplated there

as constituting a fundamentally different process, altering the

rules of confidentiality, implicating the rights of absent parties, and changing the commercial stakes of arbitration. See

id. None of those concerns are present here. Although the

Charleston and Richmond panels are constituted differently,8

the parties’ arbitration in each venue remains a bilateral proceeding that is subject to the same rules of privacy and confidentiality and is of comparable cost. Stolt-Nielsen does not

support the proposition that a choice between two arbitration

panels implicates the type of fundamental change that concerned the Supreme Court.

Accordingly, we affirm the Virginia district court’s holding

that the question of whether the Charleston Panel could con8CWVE tries to bring this dispute closer to the question at issue in StoltNielsen by arguing that just as class-action arbitration "change[d] the

nature" of arbitration, there are material differences between the arbitration procedures agreed to in the 1997 and 2008 Agreements that change

the nature of arbitration in Charleston as compared to Richmond. In particular, CWVE points to the fact that the 1997 Agreement called for arbitrators to be selected from the AAA’s list, whereas the 2008 Agreement

called for each party to appoint one arbitrator, who together would choose

a third. These are differences, to be sure, but we are constrained to disagree that they amount to fundamental changes in the nature of the arbitration agreed to by the parties. 

14 CENTRAL WEST VIRGINIA ENERGY v. BAYER
sider the 2008 Agreement’s validity was a procedural question properly for resolution by the panel.9

B.

Our determination that the question of the Charleston

Panel’s jurisdiction over the 2008 Agreement is procedural

does not end the analysis. CWVE argues that even if we find

that the Charleston Panel had authority to rule on its jurisdiction over the 2008 Agreement, the panel nevertheless "exceeded its powers" under § 10(a)(4) by impermissibly

creating its own theory of jurisdiction rather than grounding

its ruling in the parties’ contract.

Bayer asserts, and the Virginia district court appeared to

agree, that we should not even reach this argument, because

once an issue is deemed procedural, arbitrators cannot err in

the way they decide it. This statement is too sweeping. To be

sure, our review under § 10(a)(4) over a procedural issue that

an arbitrator had authority to decide is exceedingly narrow: "if

an arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, the fact that

a court is convinced he committed serious error does not suffice to overturn his decision." Major League Baseball Players

Ass’n v. Garvey, 532 U.S. 504, 509 (2001) (per curiam)

(internal quotations omitted). However, we nevertheless have

an obligation to ensure that the arbitrator’s decision was "rationally inferable from the contract." Qorvis Commc’ns, LLC

v. Wilson, 549 F.3d 303, 312 (4th Cir. 2008); see also United

Paperworkers Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S.

29, 39-40 (1987) (reviewing an arbitrator’s decision on a procedural matter to ensure that it was "a construction of what

9Because we hold that the question of which panel should decide the

validity of the 2008 Agreement was procedural, we do not reach Bayer’s

alternative argument that the parties ceded questions of arbitrability to the

Charleston Panel by incorporating the AAA Rules into the 1997 Agreement. 

CENTRAL WEST VIRGINIA ENERGY v. BAYER 15
the contract required," but explaining that even an error in

interpretation would not require setting aside the award unless

it amounted to "bad faith" or "affirmative misconduct" by the

arbitrator).10

The West Virginia district court concluded that the Charleston Panel met this deferential standard because the dispute

was properly before the panel under the 1997 Agreement’s

terms and a determination of the validity of the 2008 Agreement "was necessary to the adjudication of the contract dispute." J.A. 444. CWVE argues that this conclusion was in

error, because the Charleston Panel actually based its jurisdiction on a novel theory of waiver rather than on any plausible

interpretation of the parties’ contract. In particular, it suggests

that the Charleston Panel’s exercise of jurisdiction was

improperly rooted in the panel’s conclusion that by arguing

the validity of the 2008 Agreement throughout that proceeding, CWVE "waived its right to withdraw that aspect of the

case from the jurisdiction of the Panel." J.A. 303.

The record shows, however, that the Charleston Panel

anchored its decision to rule on the 2008 Agreement’s validity

in the authority granted to it by the 1997 Agreement to adjudicate "[a]ll disputes under th[at] Agreement." J.A. 47. It

explained that CWVE "interposed the July 2008 Agreement

as a bar to any recovery by [Bayer] under the [1997 Agreement’s] extension," such that the 2008 Agreement’s validity

was integral to a determination of "whether it bar[red]

enforcement of the [1997 Agreement’s] extension." J.A. 303

10Other circuits review procedural questions decided by an arbitrator

under similar standards. See, e.g., Trustmark Ins. Co. v. John Hancock Life

Ins. Co. (U.S.A.), 631 F.3d 869, 874 (7th Cir. 2011) (noting that arbitrators’ procedural decisions are reviewed only to ensure that they are interpreting the contract, not interpreting the contract correctly); Lagstein v.

Certain Underwriters at Lloyd’s, London, 607 F.3d 634, 643 (9th Cir.

2010) (reviewing the arbitrators’ decision on a procedural issue "only [to]

determine whether the arbitrators’ interpretation [of the contract] was

plausible" (internal quotations omitted)). 

16 CENTRAL WEST VIRGINIA ENERGY v. BAYER
(emphasis added). From this quoted language, we can discern

that the panel treated its jurisdiction over "disputes under" the

1997 Agreement as the starting point of its analysis. It simply

construed this grant of jurisdiction more expansively than

CWVE believes it should have.11

Our determination that the Charleston Panel based its jurisdiction on a plausible reading of the parties’ contractual language ends our inquiry under § 10(a)(4). Because we do not

believe the Charleston Panel "irrationally disregarded the

terms of the contract," it is not our role "to review the correctness of the arbitrator’s reasoning." Qorvis, 549 F.3d at 312;

see also Misco, Inc., 484 U.S. at 38 ("The arbitrator may not

ignore the plain language of the contract; but the parties having authorized the arbitrator to give meaning to the language

of the agreement, a court should not reject an award on the

ground that the arbitrator misread the contract.").

We therefore affirm the West Virginia district court’s holding that the Charleston Panel did not exceed its powers under

§ 10(a)(4), and uphold the Charleston Panel’s award in favor

of Bayer.

11CWVE also argues that the Supreme Court’s recent decision in Granite Rock Co. v. International Brotherhood of Teamsters, 130 S. Ct 2847

(2010), established that the analogous phrase "arising under" must be construed narrowly. Granite Rock held that the phrase "arising under," as used

in an arbitration clause, did not extend to cover disputes about the agreement’s formation, even when the formation issue was raised as a defense.

Id. at 2860-62. Granite Rock does not, however, compel the conclusion

that the phrase "all disputes under" cannot be construed to extend to a

defense raised to the continuing validity, rather than formation, of a contract. Accordingly, it does not change our conclusion that the Charleston

Panel was at least "arguably construing or applying" the 1997 Agreement

when it exercised jurisdiction over the 2008 Agreement. Garvey, 532 U.S.

at 509. 

CENTRAL WEST VIRGINIA ENERGY v. BAYER 17
III.

For the reasons stated above, the judgments of the Virginia

and West Virginia district courts are hereby

AFFIRMED.

18 CENTRAL WEST VIRGINIA ENERGY v. BAYER