In Rain CII Carbon, LLC v ConocoPhillips Co. (5th Cir. Mar. 9, 2012), Conoco entered into a long-term supply agreement to sell green anode coke to Rain. The agreement included a formula to calculate market price for the coke and an arbitration clause referring price disputes to "baseball" arbitration, where each party submits a proposal and the arbitrator selects one of the two. Conoco submitted a price dispute to arbitration under the agreement, and the parties each provided their proposal to the arbitrator. The arbitrator adopted Rain's price formula but used Conoco's draft award as a template for his own award, and included two paragraphs from Conoco's draft award. Upon Rain's motion, the arbitrator corrected the inconsistency as a clerical error and removed the two paragraphs from the final award.

Conoco then moved to vacate the award in the district court, claiming that the arbitrator exceeded his powers by failing to select only one proposal, as required by the baseball arbitration agreement, and by failing to provide a reasoned award. The district court rejected these arguments and confirmed the award, and Conoco appealed.

The Court of Appeals affirmed the district court and upheld the award. The court rejected Conoco's argument that the arbitrator exceeded his powers by failing to select only one proposal when he included paragraphs from Conoco's draft proposal. As the arbitrator had corrected the award by identifying and removing the sentences from Conoco's proposal, Conoco had no basis to complain. Given the deference due to arbitral awards, there was insufficient support for Conoco's argument.

In addition, the court rejected Conoco's argument that the arbitrator exceeded his powers by failing to render a reasoned award. The court relied on precedent to explain that "a reasoned award is something short of findings and conclusions but more than a simple result." Ultimately, the court concluded that, given the deference employed when evaluating arbitral awards, the eight page award did amount to a reasoned award. The court explained that if the parties wanted a more thorough discussion of the arbitrator's reasoning, they should have contracted for an award to include findings of fact and conclusions of law.

This case demonstrates the narrow judicial review of arbitration awards in light of the strong federal policy favouring arbitration. The case also provides an example of the deference courts apply when considering a request to invalidate an award based on allegations of the arbitrator exceeding his authority.