Welcome, new members!

We are delighted to welcome the following members who joined us in March 2025. 

9487 – 2181 QUEBEC INC., QC, Canada
9534 – 0089 QUÉBEC INC., QC, Canada
AFRICAN HALAL FOODS INC., AB, Canada
B.C. BLUEBERRIES FARM LTD. (Also d/b/a B.C. Blueberries), BC, Canada
BF COMERCIO Y EXPORTACIONES LIMITADA (También haciendo negocios como BFE), Santiago, Chile
BLOOMS TRADE INC. (Also d/b/a Blooms), Delaware, United States
CREEKSIDE ORGANICS INC., CA, United States
DOCKSIDE MANAGEMENT INC., FL, United States
ECHERI UJCHAKURA PRODUCE (A d/b/a of Arturo Hernandez Villeg), ON, Canada
FLAVOURS OF CHENNAI GROCERS INC., BC, Canada
FRESHWAY FOODS LLC., OH, United States
FRUITBREEZE LLC., FL, United States
GAIA PRODUCE LLC., NY, United States
HILLSIGHT VEGETABLES INC., AB, Canada
JAY KISAN TRADING INC., BC, Canada
KRISHIV IMPORTS LTD. (Also d/b/a Themangoman), ON, Canada
ORAKAI TRADING INC. (Also d/b/a Orakai Trading), BC, Canada
RIVERVALLEY PRODUCE INC., AB, Canada
RLE LOGISTICS INC., AB, Canada
ROSHAN’S BIG BAZAAR LTD. (Also d/b/a Big Bazaar), BC, Canada
RV FAMILY PRODUCE LTD., ON, Canada
TEJA GLOBAL LTD. (Also d/b/a Prep Culinary), ON, Canada
UNITED GROWERS, UNIPESSOAL LDA, Lisbon, Portugal
URBAN HARVEST DISTRIBUTORS INC., ON, Canada
VENUSCA GLOBAL CORPORATION, ON, Canada
YAS VISION INC., ON, Canada

To view a complete list of active members, click here.

DRC Membership: change in status

As of March 31, 2025, the following organizations no longer hold a DRC membership:

ALGOMA ORCHARDS LTD., ON, Canada
CAVENDISH FARMS CORPORATION, AB, Canada
CAVENDISH FARMS CORPORATION, ON, Canada
COMERCIALIZADORA TROPIEXPRESS S.A. DE C.V., Puebla, Mexico
DG ALIMENTATIONS (Faisant également affaire sous 11002830 Canada Inc.), QC, Canada
EGYPTIAN CANADIAN PHOENIX LTD., ON, Canada
F.J. SHEA & SON LTD., PE, Canada
FRUIT WORLD COMPANY, INC., CA, United States
GOLDEN LEAF (A d/b/a of 11597124 Canada Inc.), ON, Canada
JEWELL’S OF PRINCE EDWARD ISLAND INC. PE, Canada
NEW DAILY NEEDS PRODUCE ON Canada
NICEBLUE SA Maule Chile
TOMATOES OF RUSKIN, INC. FL United States
YM COURTIER INC. QC Canada

For details regarding a change in status, please get in touch with the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

Click here to view a complete list of inactive members. This list includes members who resigned, were expelled, or were terminated in the last nine months.

About the DRC

The DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for fresh produce. The DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e., buy, sell, import, export) unless accepted by the regulations. Today, the DRC has members in 16 countries outside North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to its Operating Rules and Trading Standards, the DRC offers a comprehensive, tailored suite of tools to build members’ knowledge and capacity to avoid or resolve disputes. The DRC provides education, mediation, and arbitration services and can impose sanctions and disciplinary actions on members who do not conduct business in accordance with the terms of their membership agreement.

The DRC has resolved claims worth more than $105 million to date. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court-enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

For more information about memberships, click here or contact our Helpdesk.

At the Fruit and Vegetable Dispute Resolution Corporation (DRC), we often receive inquiries from growers and shippers regarding their continued responsibility for the quality and condition of the product until it reaches the final destination, particularly when the sale is made under Free on Board (FOB) terms. The FOB Incoterm is generally followed by a specific destination or port of entry, such as McAllen, TX, Nogales, AZ, or Windsor, ON, among others.

To clarify this, it is essential to understand the concept of “suitable shipping condition” as defined in DRC’s Trading Standards, Section 19, Subsection 24:

“In relation to direct shipments, ‘suitable shipping condition’ means that the commodity, at the time of shipment, is in a condition which, if handled under normal transportation conditions, will ensure delivery without abnormal deterioration at the contract destination agreed upon between the parties. The seller has no responsibility for any deterioration during transit if no specific destination is agreed upon.”

This definition emphasizes the seller’s responsibility for ensuring the commodity is shipped in a condition that guarantees it will arrive without abnormal deterioration at the agreed destination, assuming normal transportation practices are followed.

Key Concepts:

The term “suitable shipping condition,” often referred to as “Good Delivery” or “Good Arrival,” is particularly relevant for FOB transactions involving perishable commodities. It is important to note that certain restrictive terms may modify the standard FOB terms, such as “FOB acceptance final” or “shipping point acceptance final.”
Under standard FOB terms:

• The seller guarantees that the product will meet the agreed-upon quality and condition requirements at the time of shipment.
• The seller also ensures the product will not undergo abnormal deterioration during transit, provided optimal shipping conditions, such as the correct temperature and handling time, are maintained.
• It is understood that some deterioration is inevitable over time, even under ideal conditions.

However, while the Incoterm defines the transfer of risk and costs, it does not specify when the grower or shipper’s responsibility for the product’s quality and condition ends.

Consider an example where avocados are sold under “FOB Good Delivery McAllen” terms to a buyer in Montreal. Under these terms, the avocados must meet specific allowable defect thresholds upon arrival at their destination. In this case, DRC Good Arrival Guidelines would apply. For an FOB shipping point transaction, the maximum permissible defects for avocados are:

• 15% total allowable defects
• 8% total allowable serious defects
• 3% total allowable decay

These thresholds align with the PACA Good Delivery Guidelines.

A timely inspection by the Canadian Food Inspection Agency (CFIA) revealed that the product had 18% total defects ((C)5% discoloration, (C)4% decay, and (P)9% scars). The reefer download and temperature recorder confirmed that the product was maintained at the correct temperature throughout transit, with no delays reported. Despite this, the inspection indicated that the decay percentage exceeded the allowable limit, meaning the avocados did not meet the “Good Arrival Guidelines.”

Although the avocados exceeded the total average percentage of defects allowed by good arrival, permanent defects,* such as scars, are not computed in the total average defect calculation or checksum. Therefore, the CFIA inspection indicates 9% total condition defects (defects marked with a (C) before the named defect), which suggests that the avocados meet good arrival standards. However, the product still failed to meet good arrival because the decay exceeded the allowable percentage.

*Under FOB Good Delivery/Good Arrival terms, quality/permanent defects, such as defects marked with a (P) before the named defect in the CFIA inspection, like scars, do not count towards the total average defects or checksum.

Conclusion:

The key takeaway is that under FOB terms while the responsibility for transportation costs and risks may transfer at the point of shipment, the seller remains accountable for ensuring the product is in “suitable shipping condition” at the time of departure. The condition of the product upon arrival at the destination is critical to compliance with the terms, and factors like temperature control, packaging, and initial quality must be considered.

We hope this explanation clarifies any confusion regarding the grower/shipper’s ongoing responsibility for product quality under FOB terms. Should you have any questions, please feel free to contact our Help Desk.

Kevin Smith, the Vice President of Operations for the Fruit and Vegetable Dispute Resolution Corporation (DRC), attended the 23rd meeting of the Codex Committee on Fresh Fruits and Vegetables (CCFFV), which was held in Mexico City from 25 February to 1 March 2025. This event plays an integral part in the DRC’s international engagement.

The Codex Alimentarius is an international food standards setting body. These food standards and related texts aim to protect consumer health and ensure fair practices in the food trade. The Codex Alimentarius guides the establishment of food requirements to enhance international trade.

The CCFFV develops standards specific to fresh fruits and vegetables. In the past, the DRC attended CCFFV as part of the Canadian delegation. This year, recognizing that DRC has recently widened its jurisdiction beyond North America, we attended using our official Codex observer status. The DRC participated with government delegations and fellow observers: the Organization for Economic Co-operation and Development (OECD) and the United Nations Economic Commission for Europe (UNECE).

As the DRC pursues its mission for fair and ethical trade, the CCFFV is an excellent venue for contributing to the development of international standards while connecting with governments and fellow stakeholders on our shared goals.

If you have any questions about the article and would like to learn more, our team at the DRC is here to assist you. We value your inquiries and are eager to provide support. Click here to proceed.

In this dispute, the arbitrator concluded that the product was deemed to have been accepted by the Respondent since the Respondent decided to unload and divert it. The arbitrator also found no evidence of a breach of contract by the Claimant. Although the Respondent promptly informed the Claimant regarding the product arriving at high temperatures, all documentation indicated that the product was loaded at the appropriate temperatures at the shipping point and that the product was exposed to undesired temperatures during transit. Furthermore, the Respondent failed to request a federal inspection to prove the product arrived in deteriorated condition or with high temperatures.

The Fruit and Vegetable Dispute Resolution Corporation (DRC) has developed a series of articles summarizing past arbitration decisions. These articles will help members understand how the DRC Rules and Standards apply in a dispute.

The DRC Dispute Resolution Rules state that all DRC arbitrations are private and confidential. As such, the names of all parties, including arbitrators and companies, are not included. A reminder that the DRC’s sole role is as administrator of the arbitration process; the DRC does not participate in any hearings. Therefore, this summary is based solely on the arbitrator’s written decision and may not reflect important information shared with the arbitrator through written briefs or verbal testimony.

ABSTRACT

The arbitration decision relates to a dispute between parties from the United States and Canada regarding the timely and proper rejection of a product by the Respondent, as well as whether the Claimant breached the contract.

Based on the findings and DRC Rules, the arbitrator determined that the Respondent’s diversion of the product indicated acceptance. Furthermore, the Respondent failed to demonstrate that the Claimant breached the contract by shipping cauliflower that was not in proper condition.

This summary provides an essential overview of the arbitration decision and its implications for international commercial disputes.

CASE: DRC File #19139 – Parties Domiciled – United States and Canada

SUMMARY OF FACTS:

On March 1, 2013, the Claimant sold a truckload of cauliflower to the Respondent under four different purchase order numbers (PO#2000008664, PO#611312, PO#611311, and PO#611314). The total invoice amount for the purchase was USD$17,273.60.

Each of the four pickup tickets, the four bills of lading, and the loading sheets were signed by the driver. All documents suggested that the product was pulped at 36°F at the time of loading. Additionally, four temperature recorders were placed on the truck.

The load was delivered on March 6 and was rejected due to high temperatures upon arrival. After the Respondent’s quality control team reviewed the information and temperature recorders, it was deemed a carrier claim.

The refrigerated unit was set to Cycle-Sentry mode, contrary to Respondent’s specifications, which indicate that the refrigerator must be set to Continuous mode. Temperature recorder readings confirmed that the product was exposed to higher than desired temperatures during transit.

A CFIA inspection was requested and performed on March 11, 2013 (four days after the product arrived). The inspection certificate showed that the product was affected by 43% brown discoloration.

The Claimant reported proceeds of USD$8,736.00 from the sale of the cauliflower. When this amount was applied to the original invoice price, the unpaid balance was reduced to USD$8,537.60. Additionally, the Claimant deducted $873.60 from an unrelated purchase, bringing the total claim to USD$9,411.20.

SUMMARY OF ARBITRATOR’S ANALYSIS AND REASONING:

In order for the arbitrator to determine what liability, if any, lies with the Respondent for the truckload of cauliflower it purchased from the Claimant, there are essentially two questions that must be answered:

1. Did the Respondent reject the cauliflower delivered by the Claimant?
2. Was there a breach of contract by the Claimant?

In answer to the first question, the Respondent agrees that it unloaded the cauliflower after it arrived. According to Section 19 of the DRC Trading Standards, “acceptance” means any action by the consignee that shows they accept the shipment, including unloading or diverting it, unless it’s for inspection by a recognized inspector.

The Respondent’s “FOB Rejection Form” shows that its Quality Assurance (QA) Specialist pulped the cauliflower after it was unloaded. This does not count as an inspection by a recognized inspector (see Section 19 of the DRC Trading Standards). The documents from both parties show that the Respondent also reloaded and diverted the cauliflower. The Claimant states that it didn’t decide to divert the cargo, and the Respondent did not respond to this point. Therefore, it seems the Respondent accepted the cauliflower when it diverted the cargo.

For the above-noted reasons, the arbitrator concluded that the Respondent accepted the cauliflower. Rejecting it after acceptance is seen as an unreasonable rejection under Section 19 of the DRC Trading Standards and is also unfair according to Section 1, General Rules of Conduct, of the same rules. Additionally, Article 2-607 of the Uniform Commercial Code (UCC) states that a buyer who has accepted goods must pay the agreed price minus any penalties for a breach of contract by the seller.

Was there a breach of contract by the Claimant?

The cauliflower was sold on FOB terms, meaning the seller is responsible for delivering the product on board the transport in suitable condition, while the buyer assumes risks after shipment.

The Respondent claimed the cauliflower arrived with elevated pulp temperatures and later asserted it was a carrier-related issue. The Respondent’s Quality Control Specialist reported these higher temperatures, arguing the cauliflower was not pre-chilled properly.

The Claimant countered that the cauliflower was at 36°F upon shipment, supported by the carrier’s signature on the bills of lading. The Respondent claimed this temperature was pre-printed, suggesting it wasn’t verified, but there was no carrier declaration indicating otherwise. Additional documents supported that the cauliflower was indeed pre-cooled properly.

The Claimant argued that elevated temperatures during transit were due to abnormal conditions, specifically related to the refrigeration unit operating in “Cycle-Sentry” mode instead of the recommended Continuous mode for fresh produce.

Thermo King’s download shows that the unit operated in Cycle-Sentry mode, rather than Continuous mode, during the four-day period that the cauliflower was in transit. The carrier’s failure to transport the cauliflower in accordance with Respondent’s instructions establishes that the conditions of transport were not normal. Since the transport conditions deviated from normal, the warranty of proper shipping conditions was void. Thus, the Respondent failed to prove that the Claimant had breached the contract by shipping cauliflower that was not in proper condition. Even if the warranty was applicable, the Respondent did not provide evidence of the cauliflower’s quality at arrival to demonstrate a breach.

ARBITRATOR’S SUMMARY DECISION:

The Respondent was ordered to pay the Claimant the sum of US$8,537.60, plus the US$600.00 filing fee, within 30 days from this Decision and Award date.

DRC COMMENTS:

As a Free on Board (FOB) buyer or receiver, it is essential to know the steps to take if you receive a product that does not meet the contract terms or DRC’s Good Arrival Guidelines. In an FOB transaction, once the carrier picks up the product, the buyer or receiver assumes ownership of the load and bears all risk in transit, including the carrier failing to set the reefer accordingly.

If you notice during unloading that the product does not comply with the contract terms or DRC’s Good Arrival Guidelines, you have the right to reject the load. To maintain this right, you must immediately re-load the product back into the truck and request a government inspection or, if agreed upon, a private inspection. If the inspection report confirms that the product does not meet DRC’s Good Arrival Guidelines or the contract terms, you have three options: you can reject the product and return it to the shipper, renegotiate the contract terms, or claim damages if a renegotiation cannot be agreed upon and rejecting the load is not an option.

We want to remind you that to properly reject a load, you must follow the procedures outlined in DRC’s Trading Standards – Section 10:

• Do not divert a shipment by sending your product to a location other than that indicated in the bill of lading (BoL).
• Do not unload the shipment except for the purpose of inspection.
• Provide your notice of rejection within a reasonable timeframe.

Shippers are responsible for meeting contract terms or ensuring good delivery to the named destination. If you divert the load, you have unilaterally deviated from the original contract and automatically foregone your rejection rights. While you can still claim damages, you will bear the burden of proof showing that any damages to the product would have been the same or similar had it been delivered to the original destination. Once a load is accepted—either through unloading or diversion—the buyer bears this burden of proof. Be aware that any deviation from the original destination, for any reason, constitutes acceptance of the load.

In this case, if it was noted during unloading that the product had arrived with high pulp temperatures, the Respondent should have proceeded to load the product back into the truck and called for a temperature and condition inspection. The next step should have been to advise all parties involved of possible temperature and condition problems, as well as their intention to reject the load. Once the inspection was performed and had corroborated the product arrived with undesirable pulp temperatures and in deteriorated condition, they could have then proceeded to reject the load.

A rejection to the shipper can only be given, provided the transit times and temperatures are normal. A rejection to the carrier must be noted in the Bill of Lading and the transit problems must be described. In this file, the Respondent chose to unload the product and decided to divert it, which meant that the product was considered accepted. Additionally, since the Respondent did not request an inspection in a timely manner, they failed to provide evidence of the bad condition of the load and therefore could not claim proper damages.

ADDITIONAL RESOURCES:

To access the full redacted arbitration decision, click here.

Receiver Duties: 

• Fruit and Vegetable Dispute Resolution Corporation Trading Standards s.10 (2)(b)(ii)

DRC Operating Rules:

• Part 6 – Dispute Resolution Rules

Articles:

• Dealing with a Bad Load? Your Options as a Buyer/Receiver Revealed
• Best Practices to Mitigate Risk Transporting Produce
• Accept or Rejected
• Diversion of Load
• Timely Notice of a Problem

Welcome new members!

We are delighted to welcome the following members who joined us in February 2025. 

ADEF IMPORT EXPORT (Faisant également affaire sous 9431-1289 Quebec Inc.), QC, Canada
ARRCA LLC (Also d/b/a Arrca), TX, United States
AVOCATS M. AGUSTIN INC., QC, Canada
DIANA DISTRIBUTION CENTRE LTD., ON, Canada
DUNE NORDIQUE IMPORT INC., QC, Canada
GLOBAL ORCHARDS STACK LTD. (Also d/b/a Global Orchards), BC, Canada
GOLDEN 8 TRADING INC., BC, Canada
GROWERS TO THE WORLD ENTERPRISES INC. (Also d/b/a Growers), BC, Canada
HM&M INTERNATIONAL FOR TRADING INC., ON, Canada
MANNA INTERNATIONAL TRADING LTD., BC, Canada
MZ.IT INC., QC, Canada
RAMSUN CANADA INC. (Also d/b/a Ramsun), ON, Canada
UNITED GROWERS ORGANIZATION INTL INC. (Also d/b/a UGO), ON, Canada
UNITED PRODUCE LTD., ON, Canada
UP VERTICAL FARMS LTD., BC, Canada

To view a complete list of active members, click here.

DRC Membership: change in status

As of February 28, 2025, the following organizations no longer hold a DRC membership:

9481-1676 QUEBEC INC., QC, Canada
ASIANA MARKET LTD. (Also d/b/a Asia Market), BC, Canada
EMPIRE TRADERS INC., AB, Canada
FRANK & ROBERT GRAPES (A d/b/a of 2271647 Ontario Inc.), ON, Canada
FRESH FOOD MARKETING INC., ON, Canada
FRUITS EXPRESS (A d/b/a of 8139938 Canada Corporation), ON, Canada
HAUSBECK PICKLE COMPANY (Also d/b/a Hausbeck Pickles and Peppers), MI, United States
MOHAMED AHMED MEGAHED MOUSA INSTITUTION, Dakahlia, Egypt
OCEAN HARVEST SEAFOODS INC., BC, Canada
ONLY THE REALEST SERVICES INC., ON, Canada
ROCK SALT CANADA INC., ON, Canada
SRI INTERNATIONAL INC., QC, Canada
TRANSHING INVESTMENT INC., QC, Canada

For details regarding a change in status, please contact the office.

Click here to view a complete list of inactive members. This list includes members who resigned, were expelled, or were terminated in the last nine months.

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About the DRC

The DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. The DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e., buy, sell, import, export) unless accepted by the regulations. Today, the DRC has members in 16 countries outside North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to its Operating Rules and Trading Standards, the DRC offers a comprehensive, tailored suite of tools to build members’ knowledge and capacity to avoid or resolve disputes. The DRC provides education, mediation, and arbitration services and can impose sanctions and disciplinary actions on members who do not conduct business in accordance with the terms of their membership agreement.

The DRC has resolved claims worth more than $105 million to date. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court-enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

For more information about memberships, click here or contact our Helpdesk.

After the publication of our article, “DRC’s Jurisdiction Expansion,” several members and industry stakeholders raised questions about the potential impact of these changes on disputes involving parties outside of North America (Mexico, the United States, or Canada). Specifically, many are curious about how the new rules affect the seat of arbitration, the location of hearings, and the selection of arbitrators. These are important considerations for those not familiar with DRC Dispute Resolution Rules.

Before addressing these questions, we would like to remind everyone that DRC’s trading standards, transportation standards, guidelines, and Dispute Resolution Rules serve as the default provisions in any transaction between members unless otherwise agreed.

1. How is the seat of arbitration and location of hearings affected now that the dispute does not involve commerce with North American companies?

The DRC’s Dispute Resolution Rules designate Ontario, Canada, as the seat of arbitration. Ontario is recognized as one of the most favourable jurisdictions for arbitration globally. As outlined in the earlier section of this article, our rules and regulations serve as the default unless a contract specifies otherwise. Therefore, DRC members and any non-members choosing DRC arbitration can mutually agree to designate a different seat of arbitration, provided it suits their needs.¹

It’s important to distinguish between the seat of arbitration and the location of hearings. While the seat of arbitration is legally the jurisdiction in which the arbitration process is based, the location of hearings can differ. If the contract does not specify a hearing location, DRC’s Dispute Resolution Rules stipulate that the hearings will be held in Ottawa, Ontario, or at a location determined by the arbitrator. This could be a virtual or in-person hearing, which does not impact the seat of arbitration.

2. What if parties wish to select an arbitrator who is not from DRC’s Roster of Neutrals?

The DRC’s Dispute Resolution Rules allow parties to appoint an arbitrator of their choosing, even if the arbitrator is not listed on the DRC’s Roster of Neutrals. However, DRC strongly recommends selecting an arbitrator from our roster for several reasons. Of course, all arbitrators must remain independent and impartial, regardless of how they are selected.

Our roster of neutrals consists of arbitrators who are highly experienced in disputes related to the produce trade. More importantly, they are thoroughly familiar with DRC’s operating rules, including trading standards, transportation standards, and our specific dispute resolution procedures. DRC arbitrators are trained to interpret the contractual terms agreed by the parties, and if the contract is silent on an issue, they prioritize DRC’s standards and guidelines over other laws, such as the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Although most of our neutrals were originally from North America, they do possess international experience. Nevertheless, the DRC has expanded its roster to include arbitrators from South America and Europe. These neutrals have completed DRC’s educational process, ensuring they understand our services, rules, and the expectations placed on DRC arbitrators.

It’s also worth noting that in cases where the parties cannot agree on an arbitrator, DRC reserves the right to appoint an arbitrator from its roster.

¹ By agreeing to arbitrate under the DRC and its Rules, the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country, in accordance with Ontario’s International Arbitration Act, 2017, SO 2017, c 2, Sch 5, Schedule 2, Article 1(3)(c). Thus, if you choose another seat, it is beneficial if the seat’s arbitration law also permits this, should your dispute not be international.

RESOURCES:

DRC’s Dispute Resolution Rules

Article: DRC’s Jurisdiction Expansion

—

If you have any questions about the article and would like to learn more, our team at the DRC is here to assist you. We value your inquiries and are eager to provide support. Click here to proceed.

Welcome new members!

We are delighted to welcome the following members who joined us in January 2025. 

AGRICOLLIBIO SRL (Also d/b/a Agricollibio), Italy
BOLA DE ORO FRESH SPR DE RL DE CV (También haciendo negocios como Bola de Oro), Oaxaca, Mexico
DOMÉNICK IMPORT INC., QC, Canada
JB AND SONS FARM LTD., BC, Canada
KEMET PRODUCE INC. (Also d/b/a Kemet Produce), ON, Canada
MILLGROVE FARMS SALES INC., ON, Canada
NATTURALE Y CIA SCA, Cundinamarc,a Colombia
NEXATECH INC., ON, Canada
RACCOONADA NUTS AND DRIED FRUITS TRADING INC., ON, Canada
RUMA MEXI-CAN FOOD AND BEVERAGE INC., BC, Canada
THE FRUITY WORLD INC., ON, Canada

To view a complete list of active members, click here.

DRC Membership Change in Status

As of January 31st, 2025, the following organizations no longer hold a DRC membership:

9461-1886 QUÉBEC INC., QC, Canada
A.S.T. DISTRIBUTION (Faisant également affaire sous 9400-1237 Quebec Inc.), QC, Canada
ADEF IMPORT EXPORT (Faisant également affaire sous 9431-1289 Quebec Inc.), QC, Canada
AGRI-FRESH INC., MB, Canada
ALQUIMIA FRUITS S.L., Catalonia, Spain
BARNSTON ISLAND HERB CORPORATION, BC, Canada
BC HOT HOUSE FOODS ( A Division of Star Produce Ltd.), BC, Canada
CFP CONSOLIDATED FRUIT PACKERS (A Division of Star Produce Ltd.), BC, Canada
COLINAS PRODUCTS, LLC. (Also d/b/a Colinas Foods), TX, United States
COMPTON BROS. INC., PE, Canada
DIMARE HOMESTEAD, INC., FL, United States
GESTION C BOURGEOIS INC., QC, Canada
HANIF PRODUCE, ON, Canada
LES SERRES ROYALES INC., QC, Canada
MEXAVO PRODUCE INC., QC, Canada
MMK GROUP INC., ON, Canada
MZ.IT INC., QC, Canada
PACIFIC GLOBAL ENTERPRISES, INC., BC, Canada
RED CROWN VENTURES LTD. (Also d/b/a Red Crown Pomegranate Juice), BC, Canada
SANLLO CANADA INC. (Also d/b/a Sanllo), ON, Canada
SANLLO EXPORT, S. L. (Also d/b/a Sanllo), Valencia, Spain
STAR PRODUCE LTD., BC, Canada
STAR PRODUCE LTD., AB, Canada
TOOTTI FROOTTI (A d/b/a of On-A-Bun Franchising Inc.), ON, Canada
UVA ENTERPRISE CORP., BC, Canada
WHOLE LEAF LTD., AB, Canada
WORLD FRESH PRODUCE CANADA INC., QC, Canada

Click here to view a complete list of inactive members. This list includes members who resigned, were expelled, or were terminated in the last nine months.

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About the DRC

The DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. The DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e., buy, sell, import, export) unless accepted by the regulations. Today, the DRC has members in 16 countries outside North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to its Operating Rules and Trading Standards, the DRC offers a comprehensive, tailored suite of tools to build members’ knowledge and capacity to avoid or resolve disputes. The DRC provides education, mediation, and arbitration services and can impose sanctions and disciplinary actions on members who do not conduct business in accordance with the terms of their membership agreement.

The DRC has resolved claims worth more than $105 million to date. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court-enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

For more information about memberships, click here or contact our Helpdesk.

The DRC Story

The Fruit and Vegetable Dispute Resolution Corporation (DRC) is excited to share that 2025 marks our 25th anniversary, a milestone in our journey that underscores our long-standing commitment to the fresh produce industry.

In the late 1990s, a process was initiated to establish the DRC. This process took time to develop. The need for the DRC arose after observing a significant growth in private commercial disputes following the implementation of the North American Free Trade Agreement (NAFTA). While a dispute resolution system existed in the United States under the Perishable Agricultural Commodities Act (PACA), Canada’s existing regulatory system proved ineffective in resolving most disputes, and cases were rising. In addition, Mexico had no international dispute settlement mechanism in place.

With a focus on minimizing and preventing trade irritants within North America, the DRC, a non-profit, membership-based organization serving the produce trade, was born in February 2000. Patterned mainly after the PACA system, the DRC evolved into a Tri-National Alternative Dispute Resolution Model that included fresh produce industry representatives and government officials from Canada, Mexico, and the US.

You may recall DRC’s iconic triangle-shaped logo. This design symbolized the collaborative spirit fostering a commitment towards a harmonious trade environment within the three nations and their commercial partners.

Since the creation of the DRC, we have successfully helped prevent and resolve millions of dollars in disputes. This evolution showcased our adaptability and unwavering commitment to improving legislation, establishing industry standards, and creating a fair and ethical environment for all participants.

In 2020, it felt time to refresh our brand. Inspired by organic shapes derived from fruits and vegetables, our new logo symbolizes the coming together of different parts of our industry. The shapes represent growth and progress, while the fresh and vibrant colour palette indicates the fruit and vegetable world. The green, orange and red hues represent the traditional ripening process of many of our crops. Our tagline, “Trade with Confidence,” captures our goal to equip you with the necessary information and tools you need BEFORE entering a new commercial transaction, introducing a sense of assurance in your trading decisions.

On January 6th, 2024, we amended our Operating Rules to expand DRC’s jurisdiction, underscoring our commitment to fairness in worldwide trade. The expansion allows the DRC’s Dispute Resolution Rules (specifically informal mediation, formal mediation, and arbitration services) to operate with a broader geographical spectrum, provided that both parties are members of the DRC at the time of the dispute, regardless of their location or where the product was traded.

As we celebrate our 25th anniversary, we look forward to continuing our mission to bring the necessary guidelines, education and services for successful commerce and trading partnerships. Thank you for joining us on this journey, and here’s to many more successful years of collaboration and growth. Let’s #tradewithconfidence!

RESOURCES: 

DRC By-Laws and Operating Rules

New York Convention

Welcome new members!

We are pleased to welcome the following 17 new members in September 2024. Here’s a list of who they are:

ALGRO FARMS INC., ON, Canada
ARROWLEAF CELLARS INC. (Also d/b/a Arrowleaf Cellars), BC, Canada
BURROWING OWL VINEYARDS LTD. (Also d/b/a Burrowing Owl Estate), BC, Canada
CANNEBERGES BIELER INC., QC, Canada
CLASSIC SALADS LLC., CA, United States
DAY’S CENTURY GROWERS INC., BC, Canada
EN TERRE VINEYARDS LTD. (Also d/b/a Terravista Vineyards), BC, Canada
EXPORTACIONES MEYER LIMITADA, Curico, Chile
FOOLISH WINE INC. (Also d/b/a Foolish Wine), BC, Canada
FRESH PLANTS INC., GA, United States
FRESHGO INC. (Also d/b/a FreshGo), AB, Canada
GRACE’S CHOICE INC., ON, Canada
LA FABRIQUE ST-GEORGE INC., BC, Canada
LA TERRE CULTIVÉE DISCREET INC. / DISCREET FARMLAND INC., QC, Canada
THERAPY VINEYARDS LTD. (Also d/b/a Therapy Vineyards & Inn), BC, Canada
TMG LOGISTICS INC., BC, Canada
VALLEY COMMONS WINERY LTD. (Also d/b/a Stoneboat Vineyards), BC, Canada

To view a complete list of active members, click here.

DRC Membership Change in Status

As of September 30, 2024, the following organizations no longer hold a DRC membership:

1022358 BC LTD., BC, Canada
ANUSAYA FRESH CANADA LTD., BC, Canada
BERRY PEOPLE LLC, CA, United States
CATAB IMPORT INC. (Also d/b/a Catab), BC, Canada
CGF INTERNATIONAL (Faisant également affaire sous Fritzner Pierre), QC, Canada
GLEZ FRESH (A d/b/a of 14111648 Canada Inc.), AB, Canada
K&D TRADING INTERNATIONAL INC. (Also d/b/a KD Trading), BC, Canada
LE SOLEIL INTERNATIONAL INC., ON, Canada
MAEN CANADA INC., ON, Canada
MEN’S FARMING INC., ON, Canada
MNH TRADERS INC., ON, Canada
NEW BOMBAY IMPORTS INC., BC, Canada
RENSO FOODS (A d/b/a of 15095875 Canada Inc.), BC, Canada
S. S FOOD TRADING (Also d/b/a 1129977 B.C. Ltd.), BC, Canada
SCARLA FRUIT (Faisant également affaire sous 9492-9122 Québec Inc.), QC, Canada
THIS AND THAT HOLDINGS CORPORATION, BC, Canada

To view a complete list of inactive members, click here. This list includes members who resigned, were expelled, or were terminated in the last nine months.

For details regarding a change in status, don’t hesitate to contact our Helpdesk.

About the DRC

The DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. The DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace.

In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e., buy, sell, import, export) unless accepted by the regulations. Today, the DRC has members in 13 countries outside North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to its Operating Rules and Trading Standards, the DRC offers a comprehensive, tailored suite of tools to build members’ knowledge and capacity to avoid or resolve disputes. The DRC provides education, mediation, and arbitration services and can impose sanctions and disciplinary actions on members who do not conduct business in accordance with the terms of their membership agreement.

To date, the DRC has resolved claims worth more than $105 million. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court-enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

For more information about memberships, click here or contact our Helpdesk.

Occasionally, we receive inquiries regarding the responsibility of cargo when a carrier drops the trailer in a receiver’s yard for later unloading. There may be several reasons for the drop, which should be understood and agreed to by both parties and documented if timelines exceed those set out in the DRC Transportation Standards, ARRIVAL AT DESTINATION, Section 9.3.f.

“… The truck is not to be used as a warehouse except by consent of the carrier and then only upon payment of warehousing charges as agreed to. Under the terms of the Corporation’s Trading Standards, the buyer’s responsibility to the seller requires that the buyer accept the produce within a reasonable time (8 hours after tender of delivery for trucks…”

Sometimes, when there are a lot of trailers to be unloaded or when the trailer arrives outside of business hours, buyers and receivers can come to an agreement with the carrier to leave the trailer at the receiver’s yard to be unloaded later.

It is important that carriers and receivers have a written agreement when they decide to leave a trailer at the receiver’s yard. This agreement should clarify the responsibilities of each party during the period when the trailer is left at the yard, including who is accountable for checking the trailer’s reefer unit to ensure it is working properly. A written agreement can help avoid misunderstandings and ensure that both parties are aware of their obligations.

If no agreement is met between the parties regarding when the responsibility for cargo is transferred over from the carrier to the buyer, DRC members should be aware of DRC’s Transportation Standards such as:

• Section 9.1. would set the tender of delivery: …“Tender of delivery” is said to have occurred when the carrier arrives at the receiver’s location at a reasonable or instructed hour to be unloaded and, when necessary, the carrier gives the receiver notice of the arrival. When the receiver is advised of arrival and instructs the operator to hold the load at a place commonly used for carriers whose unloading may be temporarily delayed, tender has taken place. The buyer’s timely complaints to the shipper and the computation of allowable unloading time are related to when “tender of delivery” has occurred.”
• Section 9.2. provides for the receiver’s right of inspection: “Upon tender of delivery, the receiver has a right of inspection of the load. This right cannot properly be denied nor abridged by the carrier. Inspection is not conditional upon the prior payment of the freight charges.
  Should the receiver or carrier deem it advisable to secure an official inspection of the load, the cost of inspection is to be borne by whoever orders inspection. The inspector should be asked to note the pulp temperatures of the commodity inspected.”
• Section 9.3. provides for unloading: “The normal transportation contract does not provide for the unloading of the truck. Lacking a specific agreement, it is the receiver’s responsibility to unload the conveyance. Unloading services are negotiable and the parties to the transportation contract can make alternative arrangements. The most common arrangement is with contractors commonly referred to as “lumpers”. A lumper is an entity that provides the physical loading and unloading of shipments at origin and destination with the use of people and equipment. The loading is from the facility of the consignor into the carrier equipment transporting the shipment from consignor’s premises and the unloading is from the carrier’s equipment into the receiving facility for a shipment at destination. Usually, a lumper is an independent contractor from the consignor or consignee or carrier.”.

Finally, if the truck or trailer is intended to be used as a temporary storage facility to hold the product and the parties disagree on a price per day for warehousing services, DRC Transportation Standards – Appendix VI can be used as a guideline to determine the charges.

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For media inquiries, please contact:

Nicole MacDonald
Communications & Marketing Specialist
Fruit & Vegetable Dispute Resolution Corporation
Telephone: 613-234-0982
Email: [email protected]

By providing standards, procedures, and education, the DRC helps its members avoid commercial disputes through consultation, mediation, and arbitration services. For the benefit of the produce trade, DRC members agree to conform to the articles, by-laws, and operating rules of the DRC. Each member must agree to submit disputes to arbitration in accordance with the DRC operating rules.

The DRC monitors the produce trade and takes action on any complaints received. All DRC members are required to meet their financial obligations on time. If a member fails to fulfill their financial obligations, the DRC reaches out to them to confirm their capability to meet them.

Per the DRC by-laws, members must respond promptly to all DRC communications and provide any requested information.

In addition to meeting financial obligations, members must continue to meet the following requirements to maintain their DRC membership:

1. Membership dues must be paid within 60 days of their due date.
2. Where and when required, members must provide and maintain financial security.
3. Must meet the conditions stated in the DRC by-laws regarding insolvency, which includes not having gone bankrupt or suspending the payment of debts.
4. They must only have suspended business operations after fully meeting their financial obligations to the trade.
5. Must not have failed to comply with any other order or direction of an arbitration or with a mediated and/or arbitration award.

For the protection of its members, the DRC may terminate a member for failing to comply with the above membership requirements.

The DRC has the authority to expel members for a range of reasons. These reasons include members violating DRC articles, by-laws and operating rules or taking other actions that are deemed inappropriate. For instance, if a member is convicted of a criminal act, violates a court order, or refuses to participate in mediation or arbitration with another member, they may be expelled.

If you are unsure about DRC’s operating rules or how your actions may affect your membership, don’t hesitate to contact DRC’s Help Desk.

For more information or for media inquiries, contact: 

Nicole MacDonald
Communications & Marketing Specialist
Fruit and Vegetable Dispute Resolution Corporation
Email: [email protected]
Phone: 1.613.234.0982

Unlimited access to our Help Desk is one of the many benefits of having a DRC membership.

Our Help Desk is a single source with answers to your trading questions and issues you may be experiencing. Expertise is available to respond to your questions and, in essence, provide informal consultations.

By providing essential tools and support, we help you succeed with every trade and avoid potential issues. If problems do arise, we can work together to find a resolution. Your success is our success.

The top 10 most frequent and common inquiries pertain to:

1. Government Inspections such as CFIA and USDA
2. Does the product meet or fail grade specifications?
3. Transportation-related matters
4. DRC member standing (i.e., Are they a member in good standing?)
5. Disagreement over an account of sales or liquidation reports
6. DRC Good Arrival Guidelines Tolerances
7. The clarification of trade terms
8. Non-payment, slow or partial payment
9. Exporting to Canada FAQ
10. Understanding Incoterms

Our customer service is available Monday through Friday from 8:30 a.m. to 5:00 p.m. Eastern Standard Time in English, French, and Spanish. For information, give us a call at 1.613.234.0982 or fill out our Contact Us form. 

Welcome New Members! 

From July 1 until July 31, 2023, the Fruit and Vegetable Dispute Resolution Corporation (DRC) welcomed the following five new members:

BLOOMSTAR (A d/b/a of 3856011 Canada Inc.), ON, Canada
JALARAM PRODUCE INC., AB, Canada
K&D TRADING INTERNATIONAL INC. (Also d/b/a KD Trading), BC, Canada
MAINLAND FRUITS INC., BC, Canada
PRODUCTORA AGRICOLA YAREXI SPR DE RL, Nayarit, Mexico

DRC Membership Change in Status

As of July 31, 2023, the following organizations no longer hold a DRC membership:

AGRICOLA SAN GALLAN S.A.C., Lima, Peru
ALRAHMA IMPORT LTD. (Also d/b/a Alrahma Import), AB, Canada
COMERCIAL GREENVIC S.A., Región Metropolitana, Chile
EPICUREAN PRODUCE (A d/b/a of Endri Demeti), ON, Canada
FOMACOP SARL (Also d/b/a Fomacop), Chichaoua, Morocco
HNH INTERNATIONAL INC., ON ,Canada
JADU DISTRIBUTION INC., QC, Canada
NATURES PRODUCE AND SEAFOOD (A d/b/a of 13860922 Canada Inc.), ON, Canada
RED ISLAND ORGANICS INC., PE, Canada
TAMARIN-GOUTT INC., QC, Canada
VIVO DE CAMPO INC., ON, Canada

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About the DRC

DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e.: buy, sell, import, export) unless excepted from the regulations. Today, DRC has members in 16 countries outside of North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to the DRC’s Operating Rules and Trading Standards, DRC offers a comprehensive, tailored suite of tools to build the knowledge and capacity of members to avoid or resolve disputes, including education, mediation and arbitration. DRC has ability to impose sanctions and disciplinary actions towards members who do not conduct business in accordance with the terms of their membership agreement.

To date, DRC has resolved claims in excess of $105 million dollars. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

To request more information, reach out to our Help Desk at [email protected] or call at (+1) 613-234-0982.

The DRC continues to work toward the modernization of Canadian Grade Compendium: Volume 2 – Fresh Fruit or Vegetables (Compendium) in collaboration with the Canadian Food Inspection Agency, and industry.

The grade standards are the lexicon, or recognized language, for describing fruit and vegetable commodities and associated defects. This common lexicon is necessary for federal inspectors, private inspection firms (i.e., insurance adjustors, marine surveyors), buyers, sellers, and others to communicate in a common language.

The Compendium establishes expectations for arrival condition given that fresh fruit and vegetables are generally purchased unseen. Grade standards are the basis for establishing a breach of contract and are an essential business-to-business tool. The Canadian and US fruit and vegetable grade standards are foundational to the DRC’s Good Arrival Guidelines and Trading Standards, which serve to establish evidence in the mediation and arbitration of trade disputes.

For vendors who have contracts with their respective buyers with specific acceptance requirements, it is important to keep in mind that the specifications outlined in those agreements generally far exceed the standards contained in the Compendium. The Compendium outlines the minimum requirements and are intended to serve the entire supply chain. Grade standards also provide a measure of consumer confidence.

Growers, shippers, and packers who may not have quality-related vendor contracts rely on the Compendium as their point of reference to meet grade. For small/medium/enterprises (SMEs) and new entrants to the produce industry in particular, the grade standards and associated CFIA quality inspection manuals are their sole guides. Private contracts and the Compendium are not in competition with each other.

Grade standards are important because they serve as Canada’s minimum import requirements for the fruit and vegetable grade standards found in Compendium. In other words, products subject to grade standards coming into Canada must meet those grade standards. In the absence of Canada’s grade standards, there would be no minimum import requirements. Under certain circumstances, this could present opportunities for various types of market disruption. When considering the importance of the grade standards, this trade-related aspect is generally not top of mind and must not be overlooked.

To learn more about the current Canadian Grade Compendium: Volume 2 – Fresh Fruit or Vegetables, click here. 

For more information regarding the Proposed changes to the Canadian Grade Compendium: Volume 2 – Fresh Fruit or Vegetables, click here. 

We are continuing with our series of articles summarizing past DRC arbitration decisions. This will help members understand how the DRC Dispute Rules and Standards (R&S) apply in a dispute. R&S states that all DRC arbitrations are private and confidential. As such, the names of all parties, including arbitrators and companies, are not included. A reminder that DRC’s sole role is as administrator of the arbitration process; DRC does not participate in any hearings. Therefore, this summary is based solely on the arbitrator’s written decision and may not reflect important information shared with the arbitrator through written briefs or verbal testimony.

Case: DRC File #13145 – Parties Domiciled – United States and Canada

Facts:

• On or about March 8^th, 2003, the Claimant sold and shipped to the Respondent a load of 1,344 boxes of red peppers, which included X brand (medium and large), Y brand (medium and large), and Z brand (medium).
• According to the invoice, the Claimant sold their red peppers FOB at USD$12.95 per case plus USD$23.50 for a temperature recorder for a total invoice price of USD$17,428.50.
• On March 13^th, 2003, the product arrived at its final destination, and a Canadian Food Inspection Agency (CFIA) inspection was requested and performed the same day, showing the following results:

448 Cartons – Medium, X Brand
1% Scars, 7% Bruises, 1% Decay of Edible Portion, 9% Soft and/or Shrivelled.
224 Cartons – Large, X Brand
8% Bruises, 1% Decay of Edible Portion, 8% Soft and/or Shrivelled.
280 Cartons – Medium, Z Brand
17% Bruises, 4% Soft and/or Shrivelled.
98 Cartons – Medium, Y Brand
1% Scars, 4% Bruises, 2% Decay of the Stem, 2% Decay of Edible Portion, 8% Soft and/or Shrivelled, 2% Sunken Discolored Areas.
294 Cartons – Large, Y Brand
1% Scars, 6% Bruises, 1% Decay of the Stem, 3% Decay of Edible Portion, 7% Soft and/or Shrivelled.

• On March 21st, 2003, the Respondent provided an account of sales to the Claimant showing a total of USD$12,248.09 and CAD$19,229.50, deducting a total amount of USD$4,792.92 in expenses (handling, freight, inspection fees and entry fees) for a total return to the Claimant of USD$7,455.17.
• The Respondent paid the Claimant the amount shown as a return amount on their account of sales. The Claimant disagreed with the returned amount arguing that the returned amount was unreasonably low.

Issues: Deciphering whether the Respondent’s return was reasonable.

Arbitrator’s Analysis/Reasoning
The arbitrator found no dispute between the parties concerning the original contract terms, nor did the Claimant question that the inspection results revealed a breach of the warranty of suitable shipping condition by the Claimant. The Claimant argued, however, that the resale prices reported by the Respondent are too low, considering the state of the peppers and general market conditions. Both parties addressed whether the contract terms were changed by mutual agreement; therefore, the arbitrator concluded that the original contract terms remained the same. Therefore, the arbitrator decided it was appropriate to determine the amount of damages the Claimant was entitled to recover from the Respondent for breach of contract.

The usual formula for determining the amount of damages is to determine what the receiver of goods failing to meet contract terms would have gotten for the goods at the time of delivery (generally based on government market news reports), less what the receiver realized from a prompt and proper resale of the damaged goods. In this instance, the Arbitrator used as the most reliable source of market price quotes The International Report Fresh Fruit, Vegetable and Ornamental Crops [2]; Volume XII – Number 21, which showed prices for Large Red Peppers on the Montreal market on March 14th, 2003, ranging from US$22.50 to US$27.66. The Claimant refers to reports purportedly issued by the “International Office of Market News” but does not provide copies of those quotes or any information about that company. The Arbitrator utilized the quotes from March 14th, as the inspection was completed at 1:10 PM on the 13th, after most sales would have been made for that day. The Respondent’s accounting of sales shows that sales of the peppers began on March 14th; hence this date most closely meets the definition of “at the time of delivery.”

The Claimant describes the peppers at issue as “choppers.” Such peppers are not generally considered to be of particularly high quality and do not normally bring prices to the top of the market. In addition, the market quotes are for large peppers, and 826 cartons of the peppers at issue were medium-sized. For the above reasons, the Arbitrator utilized USD$22.50 as the measure of the value that conforming goods would have had at the time of delivery. This gives a value of USD$30,240.00 for the 1,344 cartons of peppers.

The best measure of the actual value of the peppers at issue is the result of a prompt and proper resale. Respondent’s accounting shows that sales began promptly on March 14 and continued daily until March 20th. The prices realized ranged between CAD$17.50 and CAD$12.00. While these prices are equivalent to US$11.15 and USD$7.64, the Arbitrator found no evidence of mishandling, given that the product failed to meet the suitable shipping warranty. Typical evidence of mishandling would be delays in initiating sales, large quantity sales at extremely low prices or extremely long sales periods. None of these conditions appear here. Therefore, the Arbitrator found that the value of the peppers at issue was the gross proceeds reported by Respondent, USD$12,248.09.

The Respondent’s basic damages from the Claimant’s breach of contract are the value of conforming goods (USD$30,240.00) less the actual value of the goods at issue (USD$12,248.09), or $17,991.91. In addition to this amount, the cost of the inspection (USD$132.99) is incurred as a consequence of the breach of contract. The total amount of damages is then valued at US$18,124.90. As its damages exceed the original amount of the invoice, the Arbitrator found no amount due to the Claimant from the Respondent.

As a side note, even if the Arbitrator had used the International Office of Market News quotes from March 10th – 14th, 2003, as urged by the Claimant, the Arbitrator would have arrived at the same result. Utilizing the lower quote of USD$16.66, there would be even less reason to question the Respondent’s sales results, and its damages would total USD$10,275.94. This amount, deducted from the invoice total of USD$17,404.80, would leave an amount due of USD$7,128.86. The Respondent has already paid the Claimant USD$7,404.80.

Arbitrator’s Decision
The Arbitrator found that the Claimant failed to uphold the burden of establishing that the Respondent’s returns were unreasonably low. Therefore, the Arbitrator decided to dismiss the claim.

DRC Comments
It is not uncommon to find cases where there is no disagreement between the parties regarding the deteriorated condition of the product upon arrival, provided a timely government inspection was performed confirming a breach of contract. The disagreement is normally linked to the return offered by the buyer, which may or may not include an account of sales showing how the product was handled.

This arbitration decision highlights the importance of a buyer/receiver submitting an account of sales showing the date, price and amount sold for each lot and the expenses associated with the breach of contract, which would be the freight, brokerage, inspection cost and any other expense agreed upon.

Without an account of sales or a proper account of sales, an arbitrator may have to use a different method to determine what a fair return could be.

The arbitrator concluded that based on the timely inspection showing a breach of contract, an itemized account of sales, and available market prices, the return presented by the respondent was reasonable.

For more information regarding the sections of DRC Trading Standards applied to this dispute, refer to the following sections:

DRC Trading Standards:
• Receiver Duties – (Fruit and Vegetable Dispute Resolution Corporation Trading Standards s.10 (2)(b)(ii))
• Back to basics: Account of Sales – (https://fvdrc.com/solutions/back-basics-account-sales/)

Welcome New Members

From March 15 until April 15, 2023, DRC welcomed the following new members:

DRC Membership: change in status

As of April 15, 2023, the following organizations no longer hold a DRC membership:

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About DRC

DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e.: buy, sell, import, export) unless excepted from the regulations. Today, DRC has members in 16 countries outside of North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to the DRC’s Operating Rules and Trading Standards, DRC offers a comprehensive, tailored suite of tools to build the knowledge and capacity of members to avoid or resolve disputes, including education, mediation and arbitration. DRC has ability to impose sanctions and disciplinary actions towards members who do not conduct business in accordance with the terms of their membership agreement.

To date, DRC has resolved claims in excess of $105 million dollars. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

To learn more, reach out to our Help Desk at [email protected] or (+1) 613-234-0982 or visit us at www.fvdrc.com.

Continuing with our series of articles summarizing past DRC arbitration decisions. We believe this will help members to better understand how the DRC Dispute Rules and Standards (R&S) apply in the event of a dispute. DRC Dispute R&S state that all DRC arbitrations are private and confidential. As such, the names of all parties, including arbitrators and companies are not included. A reminder that DRC’s sole role is as administrator of the arbitration process; DRC does not participate in any hearings. Therefore, this summary is based solely on the arbitrator’s written decision and may not reflect important information shared with the arbitrator through written briefs or verbal testimony.

Case: DRC File #20316 – Parties Domiciled – Canada

Facts

• The Claimant shipped nine (9) loads of its 2018 potatoes to the Respondent between August 11, 2018, to September 19, 2018, for a total invoice price of $234,700.29 on the nine (9) loads.
• There was no formal contract between the parties for the 2018 season. However, the parties had a course of dealing during the transactions in 2017. Under this course of dealing in 2017, the Claimant invoiced the Respondent between August 3, 2017, and September 5, 2017.
• The Claimant shipped its 2018 crop to the Respondent FOB, from August 11, 2018, to September 19, 2018.
• An in-house quality control was performed on the arrival on each load.
• Between September and November 2018, the Claimant received four (4) partial payments totaling CAD$75,699.94.
• Communications between the parties shows that the Respondent agreed to pay CAD$100,640.54 to the Claimant based on the percentage the Respondent was able to use on the nine (9) loads.
• The Claimant is seeking the payment of CAD$145,371.95

Issues

• Whether there was an agreement between the parties to use an in-house quality control inspection.
• Whether the receiver is entitled to claim damages in all the 9(nine) loads.

Arbitrator’s Analysis/Reasoning

This case involves the sale and shipment of nine (9) truckloads of the 2018 potato crop, grown by Claimant in Ontario, and sold to the Respondent, located in Prince Edward Island (“PEI”), from August 11, 2018, to September 18, 2018. In the 2018 season, the Respondent began purchasing the potatoes from the Claimant, starting in August 2018. In the beginning of the season in July 2018, the Claimant appeared to have had good quality potatoes; and the Respondent began receiving potatoes from the Claimant in August 2018, which included yellow, red and white potatoes. 

The Respondent provided the trucks that picked up the potatoes from the Claimant and shipped the loads to the Respondent’s facility in PEI. The Respondent packed out the potatoes on each of the nine (9) loads and provided multiple in-house QC inspections on each load.

The Claimant was to ensure the potatoes were in “suitable shipping condition” when loaded on the trucks.  However, according to the Claimant, “There were no third-party reviews, and the Claimant has an in-house quality control, and everything was looked at and made sure that it was number one before shipping to the Respondent.” However, in response to the Arbitrator’s request for documents from the Claimant at the hearing to confirm the quality control of the loads of potatoes, the Claimant advised they did not have them. Since there were no Claimant’s documents showing suitable shipping condition inspections regarding the Claimant’s loads, the only QC documentation regarding the Claimant’s loads are provided by the Respondent, showing six (6) or seven (7) in-house detailed QC Inspection Reports for each load.    

The Respondent states there were actually two (2) deals with the nine (9) loads. “There was one deal for shipping dirty, unwashed, ungraded potatoes that were loads three and four. And there was another deal entirely, still on a pack-out basis, but for clean, washed, and graded potatoes, which were loads one, two and five through nine.” 

Invoicing and Payment

The Claimant invoiced the Respondent CAD$234,700.29 for nine (9) loads of potatoes. The Respondent agreed to pay CAD$100,640.54 to the Claimant based on the percentage the Respondent was able to use. 

The Respondent is required to pay CAD$5,399.80, for trucking and dumping for Load four (4). (There were text messages regarding temperature control issues on this load.) The Respondent is not entitled to deduct CAD$4,040.40 from the invoice of Load three (3). (Respondent’s spreadsheet indicated that the amount of CAD$4,040.40 was used to calculate the 36.69% he claimed was usable product from Load three (3).)

The Claimant received the following CAD payments from the Respondent:

09/04/18 – $20,000.

09/11/18 – $15,000.

10/23/18 – $20,000.

11/18/18 – $20,699.94, which totals $75,699.94

The Respondent also claims an additional payment of $13,628.40 on 1/19/2019, which brings the total paid to the Claimant to CAD$89,327.40. The Respondent claims that the amount still owed to the Claimant is CAD$1,872.94.

Finally, the Arbitrator concluded that the Respondent failed to adhere to DRC rules, especially as to CFIA inspections, or any other neutral third-party inspections. It is always the responsibility of the buyer to request inspections to show damages. The Arbitrator finds that a previous course of dealing, and communication exchanges between the parties, make it reasonable to conclude that the pack-out documentation provided by the Respondent indicates the parties established a course of dealing regarding the Claimant’s acceptance of the Respondent’s in house quality control.

Arbitrator’s Decision

The Claimant is entitled to the full invoice price CAD$31,155.75 for Load four (4) as there was evidence of temperature control issues during transit.  It is well established a buyer in an FOB sale must establish time and temperature were normal before making a claim to the seller. This coupled with no neutral third-party inspection of this load overrides other considerations given to a previous course of dealing on other shipments. The Respondent must also pay CAD$5,399.80 for trucking and dumping of Load four (4), and CAD$4,040.40 from the original calculation of Load three (3). The total owed to the Claimant by the Respondent is CAD$131,796.29 for the product. CAD$89,327.40 has been paid, leaving a balance of CAD$42,468.89 due to the Claimant. 

Lastly, each party shall pay 50% of the arbitrator’s fees of CAD$20,047.38, in the amount of CAD$10,023.69 each. The Claimant has paid CAD$17,747.38 to date. The Respondent has paid CAD$2300.00 to date. Therefore, the Respondent is to pay CAD$7,723.69 in arbitrator’s fees to the Claimant. 

Consequently, the Respondent is to pay the Claimant CAD$50,192.58 within 30 days from the date of this decision.

DRC Comments

When claiming damages FOB receivers/buyers have the burden to prove time and temperature while in transit are acceptable, since in a FOB transaction the risk of loss would transfer from the shipper to the buyer once the shipper loaded the product into the truck. In this case, there was evidence of temperature control issues during the transit of load four (4). Therefore, the arbitrator considered that the claimant was entitled to be paid in full for this load. Since there is evidence that there was a problem during transit, the receiver/buyer would have to claim against the transportation company.

Another important point in this decision that DRC members must take into consideration when receiving product in deteriorated condition is that in the US and Canada, a federal inspection must be requested, unless otherwise agreed. A party claiming an agreement to use an alternate service was established has the burden of proving such an agreement was reached. In this case, the arbitrator concluded that the previous course of dealing, and communication exchanges between the parties, were enough evidence that indicates the parties established a course of dealing regarding the Claimant’s acceptance of the Respondent’s in-house quality control.

For more information regarding the sections of DRC Trading Standards applied to this dispute, refer to the following sections:

DRC Trading Standards:

• DRC Good Inspection Guidelines (https://fvdrc.com/wp-content/uploads/2016/10/good_inspection_guidelines.pdf )
• Receiver Duties (Fruit and Vegetable Dispute Resolution Corporation Trading Standards s.10 (2)(b)(ii))
• When is valid to request a private inspection? (https://fvdrc.com/solutions/valid- request-private-survey/)

Welcome New Members

From February 15 until March 15, 2023, DRC welcomed the following new members:

DRC Membership: change in status

As of March 15, 2023, the following organizations no longer hold a DRC membership:

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About DRC

DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e.: buy, sell, import, export) unless excepted from the regulations. Today, DRC has members in 16 countries outside of North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to the DRC’s Operating Rules and Trading Standards, DRC offers a comprehensive, tailored suite of tools to build the knowledge and capacity of members to avoid or resolve disputes, including education, mediation and arbitration. DRC has ability to impose sanctions and disciplinary actions towards members who do not conduct business in accordance with the terms of their membership agreement.

To date, DRC has resolved claims in excess of $105 million dollars. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

To learn more, reach out to our Help Desk at [email protected] or (+1) 613-234-0982 or visit us at www.fvdrc.com.

As we review questions from our members, we find they often forget the published grade standards have multiple uses that serve to minimize misunderstandings.  Whether you specify a grade (US#1, Canada#1, etc.) or not the standards establish a lexicon, or recognized language, for describing fruit and vegetable commodities and associated defects. This common lexicon is necessary for buyers, vendors, government inspectors, private inspection firms and others to communicate in a common language in the same way we all know an inch, a foot, a centimeter, or a meter is always the same.  Fruit and Vegetable Standards ensure terms like bruising, injury, damage, discoloration, watery scales have that same universal meaning.

The terms and definitions in the standards can be used to verbally define parameters for shipping and arrival expectations.  This is important as fresh fruit and vegetables are generally purchased unseen from distant shipping point.  The defined terms provide clarity to the contract specifications and in turn are the basis for establishing a failure to meet those agreed specifications (FOB Good Arrival as an example.)

When the Commodity Standard is used along with a specific grade (US#1, Canada#1, as examples) the agreement then is based on the defect limits of that published specified grade.  The grade standards represent an overview of the quality, condition, generally appearance of the item, including the presence of defects (damage, insects, disease), size, shape, and colour. The standards also include the maximum tolerance of defects allowed to meet that specific standard. 

While parties may create their own contract specifications outside of the established grades, they must ensure their agreement complies with any applicable minimum grade and condition standards that have been established by the importing or exporter country.  Many commodities are traded based on “no grade good delivery” terms.  Such contracts are still subject to individual country requirements for such things as maximum permanent defects, and sugar (soluble solids) content. 

Our members and trading partners are very often surprised to find out the impact of grade standards when we are contacted to help resolve a problem transaction.  What happens when one of the parties in a produce transaction believes that a commodity was purchased with a specific grade standard (US#1, CAD#1, CAT 1, etc.), but there is no written evidence that shows that this was discussed, understood, and agreed upon by both of the Parties?

Verbal communications are contractually binding if both parties agree on and understand the terms discussed. However, when there is a disagreement, or there is no meeting of the minds as to what was discussed verbally, the documents and written communications related to the transaction will determine the contract between the parties.

Where no specific grade requirement can be documented, the calculation of defects to support a breach of contract changes.  Condition defects (those which change over time like decay and bruising) will be counted toward any breach of contract.  Permanent defects (those such as  scarring and off size) will not be counted toward any alleged problems on arrival.  

In the absence of an agreement, the calculation of conformance to the contract will default to the DRC Good Arrival Guidelines .  Remember, without an agreement only the condition defects may be counted to establish a breach of contract.

Hence, when you are establishing the terms of the transaction and you are buying or selling based on a grade standard, making sure a grade standard is agreed, preferably in writing, is highly important.

Depending on a company’s knowledge of importing or exporting goods, having an in-house expert or outsourcing service for clearing goods across borders is essential. A customs broker provides assurance that the goods to be imported or exported will comply with the necessary documentation and customs declarations. Whether you are just starting your import/export business or don’t have a logistics department, it is a good practice to have a customs broker assist with navigating the complexities of your business’s trade.

Over the years, customs brokers have become more than facilitators when getting commodities across borders. Depending on the level of service required, customs brokers will assist in; collecting, reviewing, and assessing documentation; determining taxes, duties, classifications, and the valuation; submitting declarations and documentation on behalf of the importer; and leveraging their experience to help you grow your business.

Additionally, customs brokers provide educational services that inform importers and exporters how to import into Canada or the USA. These educational services include information on INCOTERMS, CFIA and FDA-regulated goods, the classification of products, and Non-Resident Importers. Pacific Customs Brokers is an example of this and have created an informative learning center with valuable trade resources for businesses, importers, and exporters for this purpose alone; https://learningcenter.pcb.ca/.

Customs brokers stay up-to-date with policy and regulatory changes. They are equipped with advanced technology, professional expertise, and customized trade solutions to ensure that every shipment’s managed and declared with compliant practices to minimize the risk of loss or penalties when helping to secure passage through Customs.

In today’s global trade environment, there are a lot of changing and moving pieces that are often too complicated to manage, let alone understand, without the proper tools. However, a Customs Broker’s role is to facilitate cross-border processes and movements efficiently and compliantly to provide businesses with the convenience and freedom to do the things they do best.

Regardless of the industry or trade, customs brokers hold the key to ensuring your easy entry through Customs. Hiring a customs broker makes excellent business sense and will prepare you for the unexpected and provide you with the peace of mind that your business is always protected.

DRC Trading Assistance staff continue to see the use of private inspections to demonstrate that a commodity fails to meet contract terms or DRC Good Arrival Guidelines. There is nothing wrong with sellers and buyers agreeing to have a private survey performed, but we would like to remind DRC members that, in the US and Canada, a federal inspection must be requested, unless otherwise agreed. DRC Good Inspection Guidelines specify that these federal inspection services are to be used unless they are not available, or CFIA/USDA cannot perform the service.

If a private inspection is requested and the applicant fails to prove that it was discussed, understood, and agreed to, the private survey report may be of no value.  

DRC Trading Standards require that receivers request an inspection within eight (8) hours after the product arrives by land and within 24 working hours after the receiver is given notice of arrival by boat and rail. Even when the product arrives on a weekend or a holiday, buyers/receivers can proceed to request a federal inspection.

The inspections that carry the most weight are those performed by the CFIA (Canadian Food Inspection Agency) and the USDA (United States Department of Agriculture) government inspection agencies.

The DRC will accept inspections performed by independent private commercial inspection services or individuals if these services were agreed upon. Nevertheless, these services can be challenged if the private inspection report fails to conform with DRC Inspection Standards and Elements. The burden of proving that the private inspections report meets DRC Inspection Standards and Elements rests with the party requesting the private inspection.

Unless otherwise agreed to, we cannot stress enough the importance of requesting a federal inspection if you have received product in deteriorated condition. Contrary to private inspection services, the DRC will accept inspection certificates issued by the USDA and the CFIA at face value and a true image of the condition of the product upon arrival.

Welcome New Members

From January 15 until February 15, 2023, DRC welcomed the following new members:

DRC Membership: change in status

As of February 15, 2023, the following organizations no longer hold a DRC membership:

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About DRC

DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e.: buy, sell, import, export) unless excepted from the regulations. Today, DRC has members in 16 countries outside of North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to the DRC’s Operating Rules and Trading Standards, DRC offers a comprehensive, tailored suite of tools to build the knowledge and capacity of members to avoid or resolve disputes, including education, mediation and arbitration. DRC has ability to impose sanctions and disciplinary actions towards members who do not conduct business in accordance with the terms of their membership agreement.

To date, DRC has resolved claims in excess of $105 million dollars. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

To learn more, reach out to our Help Desk at [email protected] or (+1) 613-234-0982 or visit us at www.fvdrc.com.

Most disputes between members are resolved with the help of DRC Trading Assistance Staff during the informal mediation process. Some disputes, however, end up in the arbitration, where an arbitrator is appointed to make a final and binding decision.

An arbitrator reaches a determination based on the information presented to them by the parties. The decision summarizes the arbitrator’s review of the statements and evidence provided by the parties. The arbitrator’s award deals with payment of the claim/counterclaim, or dismissal of the claim/counterclaim.   

90% of DRC arbitration awards are paid without any conflicts but, there are circumstances where the losing party refuses to pay. The importance of paying an arbitration award is critical. Failure to pay an arbitration award could lead to disciplinary actions against the DRC member in default as well as court enforcement. This could have important implications on your business.

When a binding decision is rendered, the DRC monitors for compliance. If the losing party fails to pay the arbitration award within the provided time, their DRC membership will be automatically terminated, and all DRC members are informed of this event.

Under the Safe Food for Canadians Regulations (SFCR), when the DRC membership of a Canadian corporation is terminated, the company no longer has the authority to buy, sell, import, or export fresh fruits and vegetables inter-provincially and internationally unless otherwise exempted from the regulations. For companies outside Canada, this means that their transactions no longer are covered by DRC.

For a party who has an arbitration award in their favor, if DRC disciplinary measures are not enough to make the loosing party pay the award, this does not mean that there is no further recourse. The next step is to have the arbitration decision and award enforced in the appropriate court of law.

Although DRC will assist the winning party of an arbitration award to gather the necessary information and documents to proceed to enforce the arbitration decision and award, the services of a lawyer are needed to start this process in court. DRC can also provide a list of attorneys that can help with this process.

We recently came across an article from attorney Dylan S. Fisher at Pallett Valo LLP, who has experience dealing with enforcing of arbitration awards in Ontario:

https://link.edgepilot.com/s/1cd14d5d/fjcIfp0cJE_wJk01ZknujQ?u=https://www.pallettvalo.com/whats-trending/you-have-just-won-an-arbitration-now-what-a-brief-guide-to-arbitration-enforcement-in-ontario/

We thought that this article may help to better understand the process of enforcing an arbitration award in court.

The Canadian Food Inspection Agency has (CFIA) updated the Automated Shipment Inspection Status Search Tool (ASSIST) with an enhanced tool called the CFIA Shipment Tracker for Food, Plant and Animal products.

Starting December 15, 2022, this tool will allow importers to check the status of any food, plant or animal import declared electronically in real-time. The CFIA has completed additional testing on the tool since it was first announced in the spring of 2022, including consultation with industry stakeholders.

What’s New?

The CFIA Shipment Tracker for Food, Plant and Animal products means that importers will no longer have to call into the National Import Service Centre (NISC) to request the status of their shipment. They can simply visit the webpage anytime and anywhere, to quickly receive a status update.

The CFIA strives to be agile and flexible to respond and adapt to an ever changing environment. We are constantly working to equip and enable both employees and stakeholders with improved access to information sharing and self-service through digital tools so stakeholders can make informed choices and comply with regulatory requirements.

The CFIA continues to expand the services it offers digitally so that businesses can remain competitive at home and abroad.

How does it work?

The CFIA Shipment tracker will share the status of any electronically declared import transaction received by the Agency. To check the status of their import, importers require their Canada Border Services Agency (CBSA) 14 digit transaction number. For meat shipments, importers can continue to use an Official Meat Inspection Certificate number, as well as their 14 digit transaction number.

The United States, Australia and New Zealand, can also use the tool to determine the inspection and transaction status for meat shipments. They can use their Official Meat Inspection Certificate number to verify the inspection status once they have received a Release Notification System (RNS) notice advising them that CBSA has reviewed and released the shipment. Other countries will need to have a CBSA 14 digit transaction number to verify the status of their import using the tool.

More Information

For more information, or if the CFIA Shipment Tracker for Food, Plant and Animal products is unavailable, contact the NISC at [email protected].

Welcome New Members

From December 15 until January 15, 2023, DRC welcomed the following new members:

DRC Membership: change in status

As of January 15, 2023, the following organizations no longer hold a DRC membership:

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About DRC

DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e.: buy, sell, import, export) unless excepted from the regulations. Today, DRC has members in 16 countries outside of North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to the DRC’s Operating Rules and Trading Standards, DRC offers a comprehensive, tailored suite of tools to build the knowledge and capacity of members to avoid or resolve disputes, including education, mediation and arbitration. DRC has ability to impose sanctions and disciplinary actions towards members who do not conduct business in accordance with the terms of their membership agreement.

To date, DRC has resolved claims in excess of $105 million dollars. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

To learn more, reach out to our Help Desk at [email protected] or (+1) 613-234-0982 or visit us at www.fvdrc.com.

As DRC expands its jurisdiction beyond North America, it is important to include terms and definitions that DRC Members, DRC Trading Assistance Staff and Arbitrators can use as reference.

Adding the “Commercial Unit” term and definition to our Trading Standards allows DRC Members, Trading Assistance Staff and Arbitrators to look no further than our Trading Standards for guidance.

We consulted with different authorities and found that adding the “Commercial Unit” term and definition does not conflict with DRC Trading Standards, CISG (Contracts for the International Sales of Goods), and UCC (Uniform Commercial Code).

Therefore, the following “Commercial Unit” will be added to DRC Operating Rules – Part 4 – Trading Standards and Related Guidelines Glossary of Terms:

“Commercial Unit – means a single shipment of one or more perishable agricultural commodities tendered for delivery on a single contract. Such commercial unit must be accepted or rejected in its entirety. Acceptance of a commercial unit does not change the parties’ existing contractual rights and responsibilities.”

This addition enters in effect on January 25, 2023.

Membership renewal invoices to cover the period January 1, 2023, to December 31, 2023, were emailed out on November 16, 2022 to most of our members.

Please note some members may have a different anniversary date depending on when they joined the DRC.  A quick check of your records online at the DRC’s members portal will confirm your anniversary date.

If your company information has changed in the past 12 months, including your responsibly connected individuals, please log in into DRC’s members portal at your earliest convenience and update your records.

Thank you to all our members who have already renewed their membership!

For more information call or email the DRC Help Desk at:

DRC Help Desk | 613-234-0982 | [email protected]

WISHING YOU ALL THE BEST THIS HOLIDAY SEASON

The DRC office will be closed Monday December 25 to Wednesday December 28, 2022, inclusively.  Our office will also be closed Monday January 02, 2023.  

The DRC Help Desk will remain available Thursday December 29^th, and Friday December 30^th at:

DRC Help Desk | 613-234-0982 | [email protected]

Welcome New Members

From October 15 until November 15, 2022, DRC welcomed the following new members:

DRC Membership: change in status

As of November 15, 2022, the following organizations no longer hold a DRC membership:

Automatic Terminations

On November 1, 2022, KK AGRO FARM INC. was expelled from DRC for failure to meet their financial obligations and failure to provide requested information in violation of section 1.5 of the DRC Trading Standards and section 3.03 of the DRC By-laws. At the time of expulsion, Karunaharan (Kan) Kanthasamy       (Director) was the only responsibly connected persons to this organization.

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About DRC

DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e.: buy, sell, import, export) unless excepted from the regulations. Today, DRC has members in 16 countries outside of North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to the DRC’s Operating Rules and Trading Standards, DRC offers a comprehensive, tailored suite of tools to build the knowledge and capacity of members to avoid or resolve disputes, including education, mediation and arbitration. DRC has ability to impose sanctions and disciplinary actions towards members who do not conduct business in accordance with the terms of their membership agreement.

To date, DRC has resolved claims in excess of $105 million dollars. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

To learn more, reach out to our Help Desk at [email protected] or (+1) 613-234-0982 or visit us at www.fvdrc.com.

Broker is the term often used by fruit and vegetable dealers to describe a person or entity that conducts a variety of commercial activities. A true broker’s (see definition below) DRC role is to facilitate good faith negotiations between parties which leads to a valid and binding contract.

After the broker has helped the buyer and the seller negotiate a valid and binding contract, the broker is expected to issue a written or electronic confirmation, normally known as a Confirmation of Sale. This confirmation must detail the identity of both seller and buyer as well as each of the contract terms that the buyer and seller have agreed to. A copy of the confirmation must be delivered to both the seller and buyer. It is important to recognize that, unless otherwise agreed, a broker does not guarantee the performance of either of the contracting parties.

Whenever a valid and binding contract is established and the proper confirmation or memorandum of sale is issued, the broker is entitled to prompt payment of the brokerage fees.

Brokerage fees may be charged to only one of the parties -the party who engaged the broker. However, what happens if the confirmation or memorandum of sale does not identify the party who engaged the broker to negotiate the transaction? In that case, the broker will be assumed to have been engaged by the buyer. Unless, by prior agreement, the parties have agreed to split the brokerage fee, the fee will be deemed to be payable in full by the buyer.

Note: A Broker is defined as any person engaged in the business of negotiating sales and purchases of produce for or on behalf of the vendor or purchaser, respectively. (Definitions 19.4, Operating Rules, Part 4, Trading Standards and Related Guidelines)

Welcome New Members

From September 15 until October 15, 2022, DRC welcomed the following new members: