In Central West Virginia Energy, Inc. v Bayer Cropscience LP, (4th Cir. July 14, 2011), Central West Virginia Energy (CWVE) challenged two district court decisions holding that a dispute implicating the overlapping jurisdiction of two arbitral panels is a procedural matter properly decided by the arbitral panel and not a court.

CWVE and Bayer entered a coal supply contract (1997 agreement), which was extended several times between 1997 and 2006. Although it was disputed whether the 1997 agreement was validly extended through the end of 2008, a Bayer representative signed a new contract with CWVE to receive coal at an increased price through 2010 (2008 agreement). The 1997 agreement provided for arbitration under the AAA rules in Charleston, West Virginia, while the 2008 agreement provided for arbitration under the AAA's Commercial Arbitration Rules in Richmond, Virginia.

Bayer, disagreeing about the applicable contract and price, filed a claim for arbitration in Charleston under the 1997 agreement and CWVE filed a demand for arbitration in Richmond under the 2008 agreement. CWVE challenged the jurisdiction of the arbitral tribunal in Charleston to consider the 2008 agreement. The tribunal convened in Richmond under the 2008 agreement and stayed proceedings pending the Charleston tribunal's decision.

The Charleston arbitral tribunal concluded that the parties had extended the 1997 agreement through 2008. The tribunal found that the 2008 agreement was:

The arbitral tribunal then awarded Bayer damages.

CWVE sought to vacate the Charleston tribunal's award in the district court of Virginia and Bayer sought to enforce it in the district court of West Virginia. Both district courts held that the issue of which tribunal had jurisdiction to consider the 2008 agreement was a procedural question to be resolved by the Charleston tribunal. CWVE appealed both decisions, and the Fourth Circuit affirmed.

The Fourth Circuit Court of Appeals reasoned that both parties consented to have their entire dispute heard by arbitrators and that the dispute was "far more akin to a venue dispute than a question of arbitrability." Further, the Fourth Circuit rejected CWVE's contention that the case of Stolt Nielsen SA v AnimalFeeds Int'l Corp., 130 S.Ct. 1758 (2010) (see Legal update, Supreme Court rules class arbitration is unavailable when agreement is silent) changed the procedural/arbitrability distinction. The court viewed the class arbitration issue in Stolt-Nielson "as constituting a fundamentally different process, altering the rules of confidentiality, implicating the rights of absent parties, and changing the commercial stakes of arbitration." Since none of those concerns were present in the CWVE-Bayer dispute, the Fourth Circuit affirmed the lower court decisions. The court also found that the Charleston tribunal did not "exceed its powers" by ruling on its own jurisdiction over the 2008 agreement because the arbitration clause contained broad language covering "all disputes."

This decision demonstrates that despite the general statutory standard for vacatur of "exceed[ing] powers," common law provides relatively consistent principles in support of arbitrators' authority to resolve disputes.