It is of utmost importance to know that in order to have direct access to DRC’s Dispute Resolution System, companies need to be members of the DRC before any dispute arises. This means that if a dispute arises between two DRC members, they are obligated to use DRC’s Dispute Resolution System to resolve the issue unless they mutually agree otherwise.
What about disputes between a DRC member and a non-member?
According to Article 3 of DRC’s Dispute Resolution Rules, these rules apply to any dispute, controversy or claim between a member and one or more non-members where the parties agree in writing to submit their dispute to DRC.
One option is for the two parties to voluntarily sign an arbitration agreement. In addition, one of these two steps must occur; the non-member can either join DRC (application + Membership fee) or pay a flat non-member access fee.
Once the arbitration agreement is signed and one of the two steps is completed by the non-member, DRC’s dispute resolution process can proceed as normal.
Another option is to include a DRC arbitration clause in a contract. An arbitration clause is commonly used in written contracts and requires the parties to resolve any disputes arising out of the contract through DRC’s arbitration process. A DRC arbitration clause allows the parties to resolve a dispute outside of the courts in a more timely and cost-effective manner. If the losing party fails to comply with the arbitrator’s decision and award, the award can be enforced in the appropriate court of law.
DRC recommends inserting the following arbitration clause into their contracts:
“Any dispute, controversy or claim arising out of or relating to this contract, or the breach thereof, shall be submitted to and finally settled by arbitration administered by the Fruit & Vegetable Dispute Resolution Corporation in accordance with its published rules and procedures. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.”
Important things to consider when using a DRC arbitration clause in a contract:
- At least one of the parties needs to be a DRC member.
- If the non-member decides they don’t want to join DRC or pay the non-member access fee, the member can pay the non-member access fee.
- If there is a dispute over the validity of the contract, in order to enforce the arbitration clause, the parties would need to go to court first to have a judge decide if the contract is valid.
If you have a signed contract, which includes the DRC Arbitration clause and find yourself in a dispute, contact our office. We will guide you through the next steps to initiate the DRC’s Dispute Resolution process.
To avoid complications of having the DRC involved in a dispute, we encourage companies and their commercial partners to join the DRC prior to beginning a business relationship. If your customer becomes a member, both of you will be automatically protected in a contract dispute.
If you have any questions or comments about this article or would like to speak to a DRC representative, click here. We look forward to speaking with you.
