In this dispute, the arbitrator has determined that there was insufficient evidence to support the Claimant’s agreement to accept the findings from the private inspection or the claimed deduction agreement. As a result, these survey reports cannot be used to assess whether the product adhered to the Good Arrival Guidelines upon arrival, nor will they be used to establish a fair return. Additionally, the arbitrator decided that the claimed deduction agreement does not apply.
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 Dispute Rules and Standards (R&S) apply in a dispute.
The DRC 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 the DRC’s sole role is to administer 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 addresses a dispute between parties from the United States and Canada regarding an alleged agreement to use private inspection reports and the appropriate compensation for each load.
The arbitrator concluded that there was insufficient evidence supporting the Respondent’s alleged agreement to utilize private inspection services. The arbitrator found that the private inspections conducted for the Respondent failed to meet DRC’s Good Inspection Guidelines. Since the private inspections did not meet these guidelines, the arbitrator decided not to consider these reports to determine a fair return.
This summary provides an essential overview of the arbitration decision and its implications for international commercial disputes.
CASE: DRC FILE #20648 – PARTIES DOMICILED – UNITED STATES AND CANADA
SUMMARY OF FACTS:
Two shipments of Flame grapes and Summer Royal grapes were sent to the Respondent by the Claimant:
1. First Shipment: Shipped on June 8th, 2020, with Invoice #2070130 and PO #2060277. This shipment contained 1,440 boxes of Flame grapes at USD$17.10 per box and 540 boxes of Summer Royal grapes at USD$14.10 per box, plus a USD$30.00 charge for a temperature recorder. The total invoice amount was USD$32,268.00.
On June 11th, 2020, a private inspection was performed on the 1,440 boxes of Flame grapes associated with Invoice #2070130. The inspection report, delivered to the Claimant on the same day, indicated the following findings: 3% decay, 1% brown berries, 9% soft fruit, 2% split fruit, 4% bruises, and 8% shattered fruit.
2. Second Shipment: Shipped on June 8th, 2020, with Invoice #2070131 and PO #2060356. This shipment included 1,439 boxes of Flame grapes at USD$17.10 per box and 540 boxes of Summer Royal grapes at USD$14.10 per box, for a total invoice amount of USD$32,220.90.
On June 15th, 2020, a private inspection was performed on the 1,439 boxes of Flame grapes related to Invoice #2070131. The findings indicated: 2% decay, 2% brown berries, 11% soft fruit, 2% split fruit, 5% bruises, and 4% shattered fruit. This report was also delivered to the Claimant on the same day.
On June 23rd, 2020, the Respondent emailed the Claimant regarding a proposed return sale for USD$9.10 per box on the 1439 boxes of Flame grapes linked to Invoice #2070131. On June 26th, 2020, the Respondent emailed the Claimant about a proposed return sale for USD$9.10 per box on the 1440 boxes of Flame grapes associated with Invoice #2070130.
On July 3rd, 2020, the Respondent made a direct deposit payment of USD$41,456.90 to the Claimant for Invoices #2070130 and #2070131. This payment was short by USD$23,032.00 based on the original invoices.
The Claimant is seeking payment for the outstanding balance of USD$23,032.00, along with a USD$2,500.00 filing fee. The Respondent argued that private inspections were accepted in previous transactions and that the inspection reports were sent to the Claimant without any indication that these reports were not accepted.
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