Author: DRC

Welcome New Members

From September 15 until October 15, 2021 DRC welcomed the following new members:

13383831 CANADA INC.	ON	Canada
CONAGRA BRANDS CANADA INC.	ON	Canada
DELTA FRESH SALES LLC (Also d/b/a Delta Fresh)	AZ	United States
HIEP HOA ASIAN FOOD MARKET (A d/b/a of 2247538 Alberta Ltd.)	AB	Canada
HOLA PRODUCE INC.	BC	Canada
LONGFE INTERNATIONAL TRADE COMPANY OF CANADA LIMITED	ON	Canada
MAPLE FRESH PRODUCE WHOLESALE (A d/b/a of Arshdeep Sharma)	AB	Canada
RICE BROS. TRUCKING LTD.	AB	Canada
TRIPOD SMART ENTERPRISES LTD.	BC	Canada
ZOE FOOD AND ORGANICS (A d/b/a of Zoe Organic Foods and Inorganic Corporation)	ON	Canada

 

DRC Membership: change in status

As of October 15, 2021, the following organizations no longer hold a DRC membership:

 

C K JESPERSEN FARMS INC. (Also d/b/a Spruce Grove SOD)	AB	Canada
CONNIE’S AFRICAN CARIBBEAN GROCERY (A d/b/a of 9970991 Canada Inc.)	ON	Canada
DB TRADING SERVICES INC. / SERVICES COMMERCIAUX DB INC.	QC	Canada
EVERYTHING PRODUCE INC.	BC	Canada
LARA FOOD DISTRIBUTION INC.	ON	Canada
P.A.L. TRADING INTERNATIONAL INC.	ON	Canada
PERSIS LAND PRODUCTS INC. (Also d/b/a Persis Land Products)	ON	Canada
TEMAK INC.	ON	Canada
THE SIX PRODUCE COMPANY INC.	ON	Canada
TOROMANO 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 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 14 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 $83 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 Regulations (R&R) apply in the event of a dispute. DRC Dispute R&R 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 #20083 – Parties Domiciled – Canada

Facts

• Between August 2017 – September 2017 the Respondent, and the Claimant, had dealings whereby the Claimant sold squash, peppers, and tomatoes to the Respondent. 
• The dealings that led up to the orders were mostly between “Y”, an employee of the Respondent, and “X”, a Claimant employee. “Z”, an employee of the Respondent also had, but to a much lesser extent, some communications with “X.” Both “Y” and “X” had had dealt together in the past.  
• There was a total of 16 invoices that were the subject matter of this dispute.  

Issue

Whether the prices and credits for each transaction were discussed and agreed between the parties.

Arbitrator’s Analysis/Reasoning

QUESTION 1: What was the agreement between the parties with respect to pricing?

The Arbitrator, in his analysis, found that, based upon the evidence presented by the parties, the following matters were not in dispute:

1. There were phone discussions between “Y” and “X” which led to the Claimant delivering produce, especially squash, peppers, and tomatoes, to the Respondent.
2. The Claimant would issue an invoice for the produce delivered on the day of shipping.
3. The Respondent issued short payments for the produce.
4. The Respondent’s alleged agreement that the costs of the produce shipped by the Claimant would be determined by USA market after the fact was not indicated in writing.

Based upon the above set of facts, the Arbitrator determined if any amounts were owed to the Claimant by the Respondent.

With respect to the reason for the “short payments,” the Respondent maintained that they were the result of credits owing based on the USA market. There was very little evidence demonstrating what the eventual USA market prices were. The Respondent offered no evidence to demonstrate the produce received from the Claimant was eventually distributed. Based on the evidence adduced (cited), the Arbitrator was unable to determine whether the Respondent resold the produce received from the Claimant at a profit, loss, or cost.   

The Claimant denied the existence of any agreement where the prices for the produce were to be determined at a later date, dependent on the USA market, as alleged by the Respondent.  According to the Claimant, the Respondent pursued them for the produce, not the other way around. The Claimant maintained that the Respondent received what they ordered and should therefore have to pay the invoices.

With respect to pricing, in the Arbitrator’s point of view, it was incumbent on the Respondent to adduce (cite) evidence showing that the parties had agreed that the prices were to be governed by the USA market. None was put forward. 

With respect to alleged quality issues, the evidence does not demonstrate that any alleged quality issue for which a credit was not provided by the Claimant was brought to the attention of the Claimant in a timely fashion. The Arbitrator also found that the Respondent did not engage the services of a third party quality inspection, such as a CFIA inspection, to report on any quality issue. 

The Arbitrator accepted that the invoices were the best indicator of the price discussed and agreed between the parties at the time the orders were placed.

QUESTION 2: Who should pay for the costs of the arbitration?

Article 53 of DRC’s Operating Rules – Part 6 – Mediation & Arbitration Rules provides that the Arbitrator shall determine liability for costs and that the Arbitrator may apportion costs between the parties. It further provides that in awarding costs, the Arbitrator shall take into account the purpose of achieving a just, speedy and economical determination of the proceeding on its merits. Given the Claimant’s overall success, the Arbitrator ordered that the Respondent pay the Claimant the sum of US$6,220.65 as costs of the arbitration. 

Arbitrator’s Decision

The Respondent is to pay the Claimant the sum of CND$72,775.50 in damages, plus US$6,200.65 filing fee, within 30 days from the date of this Decision and Award.

DRC Comments

There are several points in this decision that DRC members must take into consideration in their transactions:   

• As a receiver/buyer, if you have received produce in deteriorated condition, you must request a federal inspection unless otherwise agreed. 
• Timely notice of a problem is essential when claiming damages.
• Properly documenting the terms of the transactions is essential and helps prevent misunderstandings.

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))
• DRC Good Inspection Guidelines (https://fvdrc.com/wp-content/uploads/2016/10/good_inspection_guidelines.pdf )
• Acts of acceptance (Fruit and Vegetable Dispute Resolution Corporation Trading Standards s.19 ss. 1)
• Reasonable Time (Fruit and Vegetable Dispute Resolution Corporation Trading Standards s.19 ss. 18)

A couple of years ago we published an article titled “Holding Back Unrelated Invoices”, which described a scenario where a buyer deducted their losses from a seller’s unrelated undisputed transaction.

That article focused on a produce transaction between a shipper and a receiver. In this article we will focus on a transportation scenario based on the following FOB transaction. “A transportation company has an account with a receiver. The receiver uses the transportation company regularly to haul produce from their suppliers to the receiver’s facilities. The receiver files a claim against the transportation company for failing to maintain desired temperatures during transit, high pulp temps at arrival and deteriorated condition. After the receiver salvages the product, they have incurred a $10,000 loss which does not include the unpaid freight bill.  The receiver decides not to pay the freight bill and additionally, does not pay a few unrelated freight bills to cover their loss.”

DRC Transportation Standards reflect the industry norms, where the transportation of fresh fruits and vegetables do not fall under the general transportation laws, such as a receiver is not obligated to pay the freight while there is an ongoing transportation dispute. Any transit-related damages are deducted from the freight invoice. 

Technically, unless the receiver and the transportation company have an agreement to offset accounts, the receiver is not automatically entitled to offset their losses on unrelated freight invoices. The receiver should be sending an invoice to the transportation company collecting any damages which exceed the freight bill.

As with produce transactions, each freight transaction is its own contract, and each contract must be addressed separately, especially when there is a dispute.

Provided that the receiver and the transportation company are DRC members, if losses are beyond the invoice price plus freight, and the transportation company refuses to pay, a claim can be filed with DRC.

The Canadian Food Inspection Agency has announced their temporary import requirements for romaine lettuce imported from the United States.

The following information is part of the CFIA news release which may be found at:

https://www.canada.ca/en/food-inspection-agency/news/2021/09/temporary-import-requirement-for-2021-lettuce-growing-season-some-romaine-from-parts-of-california-must-be-tested-forecoli.html

To protect Canadians from possible health risks, the Canadian Food Inspection Agency (CFIA) is implementing temporary import conditions for romaine lettuce from the Salinas Valley (Santa Cruz, Santa Clara, San Benito, and Monterey counties) in California for the 2021 growing season.

Between September 30 and December 31, 2021, importers of romaine lettuce and products containing romaine lettuce from the U.S. are required to provide proof that the product does not originate from counties in California’s Salinas Valley, or an attestation form and certificate of analysis for each shipment to demonstrate that the romaine lettuce does not contain detectable levels of E. coli O157:H7.

Similar temporary import conditions were implemented during last year’s fall season.

For more information, read the CFIA’s guidance Import requirements for romaine lettuce from the United States.

This continues with our series of articles summarizing past DRC arbitration decisions. We believe these articles will help members to better understand how the DRC Dispute Rules and Regulations (R&R) apply in the event of a dispute.

The DRC dispute R&R 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 #20579 – Parties Domiciled – United States and Canada

Facts

• On March 3, 2020, Claimant sold to Respondent one truckload of limes comprised of 60 cartons of 175-count limes (Product of Mexico) at US$21 per carton, (US$1,260), and 300 cartons of 200-count limes (Product of Mexico), at US$22 per carton, (US$6,660) for a total of US$7,860. According to the invoice, the product was sold F.O.B.
• The product was shipped on March 3, 2020, from McAllen, Texas to Respondent, in Toronto, Ontario, where the shipment arrived on March 8, 2020.
• On March 9, 2020, Respondent requested a CFIA inspection of 300 cartons of 200 count limes received from Claimant. The inspection, performed at 10 am the same day, disclosed 43% average defects, including 17% permanent defects (12% blanching, 2% oil spots, 3% scars) and 25% condition defects (4%decay, 17% yellow color, 4% skin breakdown). Pulp temperatures at the time of the inspection ranged from 10.8 to 11C (approx. 51F). The inspector also noted that nearly all the decay was accompanied by mold.
• Respondent reported reselling 50 cartons of the 200 count limes at CD$21 per carton and 250 of the 200 count limes at CD$22 per carton.
• Respondent issued a cheque dated March 26, 2020 made payable to Claimant in the amount of US$3,705. This amount included payment of US$21 per carton for the 60 cartons of 175-count limes as invoiced and payment of US$8.15 per carton for the 300 cartons of 200-count limes. Claimant did not accept this cheque and returned it to Respondent.
• Claimant issued a revised invoice billing Respondent for the 60 cartons of 175-count limes, at US$21 per carton, (US$1,260), and for the 300 cartons of 200-count limes, at US$18 per carton, (US$5,400) for a total F.O.B. invoice price of US$6,660.

Issue

Whether the CFIA inspection certificate showed the correct product identity

Arbitrator’s Analysis/Reasoning

The Arbitrator’s analysis focused on determining whether the CFIA inspection, in light of the product identity issues raised by the Claimant, established that the 200-count limes in the subject shipment did not comply with the contract requirements, thereby entitling Respondent to damages. 

Claimant stated that when the load of limes in question arrived at Respondent’s warehouse on Sunday, March 8, 2020, Respondent advised that the limes were in poor condition and sent photos of the limes to Claimant.  The photos, according to Claimant, showed limes from a previous order that was shipped to Respondent on February 20, 2020.  When questioned about the photos, the Claimant states Respondent insisted the photos were of the limes that just arrived even though the date tags showed otherwise. In order to resolve the issue, the Claimant states Respondent was asked to secure a CFIA inspection of the subject load of limes.

Respondent agrees that following arrival of the shipment and its discovery that the limes were in poor condition, photos of the limes were sent to Claimant per Claimant’s request.  Respondent states a single photo of 175-count limes was sent to Claimant as a result of a technological error, which was immediately rectified by contacting Claimant by email and telephone. Respondent states Claimant acknowledged the new pictures but continued to deny their validity.

Respondent submitted a copy of the photo of the 175-count limes, which bears a label with the handwritten date “02-20-20.” The file contains a number of other photos, some of which are the digital photos taken by the CFIA inspector, and some are the photos taken by Respondent.  There are photos showing just the limes inside the cartons, as well as photos showing the outside of the cartons and photos showing two pallets with dozens of cartons stacked upon each. 

Photos included in the file showed labels and QR codes associated with different purchase order and invoice number for the limes at issue in this dispute. This would appear to support the Claimant’s contention that some of the cartons made available to the CFIA inspector for inspection were from a different shipment of limes.

The CFIA inspection certificate shows defect percentages ranging from 0 to 10 percent for decay, 0 to 8 percent for skin breakdown, and 2 to 34 percent for yellow color.  The presence of sample cartons showing little, or no presence of a defect combined with those showing a significant percentage of the same defect may also be indicative of a non-homogenous load.

Based on the items just noted, it would appear that the integrity of the load was compromised prior to the CFIA inspection, such that it is impossible to ascertain with reasonable certainty that all 300 cartons of 200-count limes covered by the inspection were from the March 3, 2020 shipment herein in dispute.

Consequently, the inspection cannot be used to determine whether the 300 cartons of 200-count limes in question complied with the contract requirements. 

Arbitrator’s Decision

Respondent was ordered to pay Claimant the sum of US$6,660.00, plus the US$600.00 filing fee, within 30 days from the date of the Decision and Award.

DRC Comments

Unless proven otherwise, a government inspection such as a CFIA Inspection or USDA inspection, is considered prima facia evidence. In other words, it is considered a correct description of the condition of the product as well as the information contained on the cartons and other markings on the product, at the time the inspection is performed.

In this case, the markings on the cartons and the photos of the load, created reasonable doubt that the integrity of the load inspected was compromised.

As a receiver who requests an inspection to prove the condition of the product upon arrival, it is very important to request and make sure the inspector writes in his report all the information included in the cartons and can report Lot ID. The inspector can also refer to the invoice # connected to the load. This normally avoids any possible lot identity issues.

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

DRC Trading Standards and References:

• 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))
• Reading inspection certificates – Part 1
• Reading inspection certificates – Part 3

Representatives from DRC will be at Fruit Attraction in Madrid, Spain on October 5-7. This will be DRC’s third visit to Fruit Attraction.

With members located in 17 countries¹, DRC is gaining increasing recognition as a global solutions provider when it comes to private, commercial business-to-business dispute resolution and trading assistance for produce entering the North American market.

Expanding international outreach through events such as Fruit Attraction, is a strategic initiative intended to expand membership and assist trading partners with a range of matters such as:

• quality and condition problems at destination
• contract of sale and issues related to breach of contract by either party
• transportation
• slow pay, partial pay and no pay disputes
• trade terms (INCOTERMS vs North American Terms)

DRC’s Trading Assistance staff have achieved a high level of dispute resolution expertise over the past 20 years and are also able to assist exporters with understanding and navigating various import requirements. A comprehensive Frequently Asked Questions guideline has been developed specifically for companies located outside of Canada and is available HERE.

Most of DRC staff (Luc Mougeot, Jaime Bustamante, Dafne Palomino and Iryna Romanenko) will be participating at Fruit Attraction. If you or your trading partners would like to meet at this event, please reach out to confirm your interest and schedule a time to meet ([email protected]; [email protected]; [email protected])

 

¹ Source: DRC Membership statistics July 1, 2021

Welcome New Members

From August 15 until September 15, 2021 DRC welcomed the following new members

2777501 ONTARIO INC.	ON	Canada
CANCAREX FOODS LIMITED	ON	Canada
FUYU FRESH TRADE (Also d/b/a 2661555 Ontario Inc.)	ON	Canada
HOLA PRODUCE INC.	BC	Canada
IGLOO COLD STORAGE INC.	ON	Canada
LONGFE INTERNATIONAL TRADE COMPANY OF CANADA LIMITED	ON	Canada
OUTCAST FOODS INC.	NS	Canada
PIERRE DAGENAIS & FILS INC.	QC	Canada
SUTHA IMPORTS & EXPORTS LTD.	ON	Canada
T.I.H. TRADING CORP.	ON	Canada
VALLEY PRIDE SALES, LLC	WA	United States

DRC Membership: change in status

As of September 15, 2021, the following organizations no longer hold a DRC membership:

1127360 B.C. LTD.	BC	Canada
1127360 B.C. LTD.	ON	Canada
9405-0044 QUEBEC INC.	QC	Canada
ALIMSUR (Faisant également affaire sous Oliver Cuadros Velarde / Jesus Zamudio Juarez)	QC	Canada
INDIAN FROOTLAND (A d/b/a of 2407475 Ontario Inc.)	ON	Canada
JACOB REDEKOP TEICHROEB (Also d/b/a Abarrotes y Refacciones Teichroeb)	ON	Canada
LE FRUIT LATIN S. E. N. C. (Faisant également affaire sous Le Fruit Latin)	QC	Canada
PEOPLE EXPRESS TRANSPORT LTD.	AB	Canada
PRODUCE BROTHERS (A d/b/a of 2480263 ONTARIO INC.)	ON	Canada
ROYAL CANADIAN SUPPLY CHAIN INC.	ON	Canada
VALLEY FRESH FRUIT (A d/b/a of 1833228 Ontario Limited)	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 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 14 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 $83 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 Regulations (R&R) apply in the event of a dispute. DRC Dispute R&R 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 #19868 – Parties Domiciled – Spain and Canada

Facts

• The Claimant sold to the Respondent a container of 2,400 boxes of Argentinian Grapes; according to the invoice, product was sold FCA at $16.00USD/box. The container arrived on February 2^nd.

• According to correspondence between the Respondent and the Claimant dated September 21st, 2016, there is no indication of any grade standard being agreed to. Only grapes of “Quality 1” are mentioned.
• Respondent requested a Private Survey and a CFIA inspection. The Private Survey was performed on February 2^nd indicating that the grapes did not meet US#1. A CFIA inspection was performed on February 3^rd and revealed 3% decay, 4% discoloration, 3% shatter, and 2% waterberry. 
• According to the parties, the Respondent paid in advance $19,680USD of the total invoice value ($38,400 USD) for the first container.

The Respondent supplied an account of sale and remitted the proceeds of $7,472.70USD after a deduction of $13,123.80USD from the original invoice value of $20,596.50USD.  

Issues

• Whether there was an agreement between the parties on the terms of sale.
• Whether there was an agreement between the parties to use an independent private commercial inspection service.

Arbitrator’s Analysis/Reasoning

There was no evidence that a Purchase Order was ever issued providing the agreed upon specifications for the shipment. A Purchase Order that was never discussed, understood, and agreed upon cannot be considered a contract.

In addition, neither the invoice nor the bill of lading indicates US # 1, and the INCOTERM used for this transaction was FCA, which would mean that even if there was an agreement for US # 1, it would have meant that US # 1 at the shipping point and not upon arrival.

The statement of purchase orders entitled “XXXX CANADA SPECIFICATION” is not an agreement between the Claimant and the Respondent for the Claimant to provide grapes meeting U.S. No. 1. According to DRC Trading Standards and Related Guidelines, in the absence of an agreement on grade, the transaction defaults to its Good Arrival Guidelines. The grapes, therefore, were to meet the DRC Good Arrival Guidelines upon arrival at destination.

Based on the grower’s explanation of the procedure used in loading freshly harvested grapes into a container, the Arbitrator couldn’t find evidence to indicate that the grapes were not properly pre-cooled.

Based on the CFIA inspection certificate dated February 3, 2017, the condition of the grapes met the DRC’s Good Arrival Guidelines of 15% total defects, no more than 15% of the same single condition defect, and no more than 3% decay for European Type grapes. 

According to the DRC’s Good Inspection Guidelines, “Independent private commercial inspection services mutually agreed upon by both parties; and who meet DRC Inspection Standards and Inspection Elements” can be used in the event of a dispute. 

However, there was no agreement between the parties that the inspection results of an independent inspection service would be used to attest to the condition of the grapes upon arrival.

In addition, the Arbitrator finds that the results and statements made on the independent inspection certificate go beyond the responsibilities of a fruit and vegetable inspector.  An inspector is to observe and report on the condition of the product, and they are not to provide their interpretation of what may have caused the condition. 

In the Arbitrator’s opinion, if the Respondent believed the results of the CFIA inspection were not accurate and the private surveyor reflected a more accurate picture of the condition of the product, they should have requested an appeal of the CFIA inspection immediately upon receiving the results of that inspection.

A further inspection such as this could have affirmed or reversed the fact that the grapes met DRC Good Arrival Guidelines and may have helped in determining the extent of any progressive nature of the condition of the grapes.

Based on the statements and evidence provided by the parties, the Arbitrator found the Claimant succeeded in establishing their claim.

The Respondent has failed to establish damages due to failing to secure an agreement for US # 1 and the CFIA inspection report indicating the product met DRC Good Arrival Guidelines.

 

Arbitrator’s Decision

Regarding the Claimant’s remedy sought, the Respondent is hereby ordered to pay the Claimant the remaining one-half of the invoice price of $19,200USD, plus $700USD as the non-refundable administrative filing fee and $1,500USD for estimated arbitration fees for a total of $21,400USD.

 

DRC Comments

As a receiver/buyer, if you have received produce in deteriorated condition, you must request a federal inspection unless otherwise agreed. When a receiver/shipper is not convinced that the results of a CFIA inspection reflect the condition of a load, they have the right to request an appeal inspection immediately after they are provided with the inspection report. To request an appeal inspection, the following criteria must be met:

“Any person who has a financial interest in the produce and it is not satisfied with the initial inspection may apply for an appeal inspection. To perform an appeal inspection, the produce must be accessible for inspection, the load must be identifiable by the original inspection certificate and 75 percent of the lot is available for inspection.”

In this decision, and like previous analysed DRC arbitration decisions, we see again the importance of properly discussing, understanding and agreeing to a Grade Standard. In this case, there was no evidence showing the parties agreed to any specific grade standard. As a result, the Arbitrator had to rule that the transaction defaulted to DRC Good Arrival Guidelines.  

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

DRC Trading Standards:

• Incoterms (https://fvdrc.com/solutions/drc-good-arrival-guidelines-incoterms/)
• Trade Terms (DRC Trading Standards s. 20)
• Receiver Duties (Fruit and Vegetable Dispute Resolution Corporation Trading Standards s.10 (2)(b)(ii))
• DRC Good Inspection Guidelines (https://fvdrc.com/wp-content/uploads/2016/10/good_inspection_guidelines.pdf )

To initiate a formal claim through DRC’s Dispute Resolution Process, members must submit a Notice of Dispute (NOD).

A NOD is your opportunity to explain: Who you are; who you are claiming against? What happened that led to the dispute?  What remedy you are seeking?

Keep in mind that to present a successful NOD, DRC’s Dispute Resolution rules requires members to submit their claim within nine (9) months of when the claim arose or when the claimant ought reasonably to have known of its existence.

The following guide explains each element of a Notice of Dispute template that DRC provides to members who wish to file their claim:

INSTRUCTIONS
Company Letterhead	Submit your NOD on Corporate letterhead. The letterhead usually consists of a name, address, and a logo or corporate design, and sometimes a background pattern.
GENERAL
Date DRC File#   TO	Date on which you are submitting your Notice of Dispute. Include the DRC File# provided by staff. If it has not been provided to you, please contact us. 1. DRC Contact Person, included in the template. 2. Counterpart/Respondent’s contact information (Contact Person and title)
PARTIES’ INFORMATION
Claimant Information	Include Company Name, DRC #, Contact Person and Title, Mailing Address, Telephone, Fax, Email.
Claimant’s Representative Information	If the Claimant has a representative, include the representative’s Name, Mailing Address, Telephone, Email Address (if any).
Respondent Information	Include Company Name, DRC #, Contact Person & Title, Mailing Address, Telephone, Fax, Email.
Respondent’s Representative Information	If the Respondent has a representative, include the Representative’s Name, Mailing Address, Telephone, Email Address (if any). If Claimant is unaware of a representative, leave it blank.
MATTER IN DISPUTE
How to explain my case	Clearly describe and outline the events and reasons you think you are entitled to a remedy. The better you explain and detail your claim, the easier it is to address the main issues. Often a good way to organize your presentation is to order the events chronologically, including:   ·       Terms of sale (e.g., FOB, CFR, FCA, etc.), ·       When and from where was shipped, ·       When and where arrived, ·       Pulp Temperature/s at shipping point and/or on arrival (if any), ·       Inspection Results (if any). ·       Any other information that helps understand the issue.

 

 

REMEDY SOUGHT
Remedy	The total amount plus any other relief, such as interest and legal fees.
SIGNATURE
Signature, Name & Title	The person who acts as the authorized contact person for the claimant must be the one who signs and must include their name and title.
EXHIBITS
Exhibits	If you are relying on any documents, you should attach copies of these documents: ·       Bill of lading (BOL), ·       Invoice, ·       Purchase Order (PO), ·       Inspection, ·       Account of Sales, and/or ·       Any other document that is related with the matter.

I am pleased to have been selected as the new Vice-President of Operations for the Fruit and Vegetable Dispute Resolution Corporation. I have big shoes to fill moving into the position as Fred Webber takes his retirement and Luc Mougeot becomes President and CEO. The warm welcomes received so far are much appreciated!

Prior to joining the DRC, I occupied various positions with the Canadian Food Inspection Agency (CFIA). Prior to joining the CFIA I worked in the private sector within the meat, dairy, and confectionary industries.

The CFIA is a regulator with a broad mandate. Within the food business line, the CFIA mandate includes food safety, consumer protection, and trade and commerce. While I was originally heavily involved with food safety, my career path at CFIA increasingly steered me towards consumer protection and trade and commerce.

I was fortunate to have worked with the DRC as the CFIA liaison officer to the DRC Board of Directors. I had become familiar with the culture of DRC and found it to be extremely open and professional with a profound passion for contributing to the wellbeing of the fruit and vegetable sector. It is an organization that I grew to admire and respect.

Changing jobs and organizations means joining a new team and learning about the business in detail. Upon joining the DRC, I was impressed with the scope of activities that the DRC undertakes with the fresh fruit and vegetable sector. While the core business of the DRC is dispute resolution, questions are also received on a variety of other subjects including food safety, tariffs, and products stuck at the border. The DRC works closely with members, allied associations, and governments to provide its expertise to benefit the industry. All of this makes a DRC membership a valuable investment. The DRC takes its mission seriously and I quickly became involved in compliance related activities to ensure that our bylaws and operating rules remain respected. At the DRC I found a dedicated respectful environment that values the contributions of everyone.

I will continue to work collaboratively building on my past experiences. The DRC will continue to work on a variety of issues including grade requirements, Destination Inspection Service, and on standards with the international community. We are embarking on the development of a renewed strategic plan and I am excited about developing new opportunities for the DRC.

As the pandemic runs its course, and face-to-face opportunities increase, I will be engaging to learn more about the fruit and vegetable industry to best serve our membership, and accelerate our growth as a respected international dispute resolution body.

I am proud to be a member of the DRC and look forward to serving the fruit and vegetable industry and meeting many of you.