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Membership Updates for July 31st, 2023

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.

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Incoterms® in Maritime Transportation Transactions and the DRC

When it comes to the global trade network, there are plenty of opportunities for things to go wrong. Due to different languages and cultural barriers, buyers (importers) and sellers (exporters) can easily misunderstand one another. Unfortunately, these misunderstandings can lead to disputes.

In the past few months, the Fruit and Vegetable Dispute Resolution Corporation (DRC) has come across importers who were either unfamiliar with Incoterms® or how to use them correctly, especially first-time importers.

What are Incoterms, and why are they important for international trade?

International commercial terms (Incoterms) provide a universal set of rules and guidelines that help facilitate a successful trade. The International Chamber of Commerce (ICC) created and published Incoterms to set clear-cut rules that outline how sellers and buyers should conduct themselves during the exporting/importing process.

Incoterms are used in many ways to facilitate a smooth and easy trade. Of primary importance, each term clarifies the tasks, costs, and risks to be borne by buyers and sellers in these transactions. Among the things that Incoterms brings is the clarification of each party’s financial and legal responsibilities, an essential advantage during international trade.

Some things the buyer or seller might be responsible for based on the Incoterms they use include are:
• Insurance
• Proper documentation
• Customs clearance
• Shipping costs
• Risk of Transit

Familiarity with Incoterms will help improve smoother transactions by clearly defining who is responsible for what in each step of the transaction.

The Incoterms Insurance and the DRC

While it is important to understand that the Incoterms are part of the contract, the Incoterms are not in themselves a contract of sale. Incoterms do not deal with whether the other conditions of the contract are met or not or the law of dispute resolution in the event of a breach of contract.

Unless otherwise agreed, DRC members must follow DRC’s Trading Standards, Transportation Standards, and other guidelines. Therefore, a DRC member, regardless of their Incoterms insurance obligations, must first prove a breach of contract following DRC’s Operating Rules or the written contract prior to the application of the insurance.

For example, when using the Cost Insurance and Freight (CIF) Incoterms, the seller is required to buy cargo insurance with the buyer as the beneficiary and share that policy with the buyer. In the event of a maritime transportation claim, since the risk of transit under this term falls with the buyer, it is up to the buyer to invoke the insurance to make the proper claim against the shipping line. If the insurance bought by the seller does not have the buyer as the beneficiary, the payment of the transaction may be jeopardized.

We strongly recommend that when negotiating a transaction with product shipped by maritime transportation, both parties dedicate some time to discuss the Incoterms to ensure that the buyer and their supplier understand what the right Incoterms are for them. Transparency and agreement are essential in establishing the rights and responsibilities of all parties. Lack of agreement and confusion over terms may not only cost you money, but valuable trading partners as well.

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Changes to the Canadian Grade Compendium: Volume 2 – Fresh Fruit or Vegetables

On July 7, 2023, the Canadian Food Inspection Agency (CFIA) published a notice informing the fresh produce industry of changes to the Canadian Grade Compendium: Volume 2 – Fresh Fruit or Vegetables.

These changes reflect feedback received from industry, trading partners, and stakeholders, during the consultation period covering:

• A new standard for greenhouse miniature seedless cucumbers.
• Updates to the grades and requirements for greenhouse long seedless cucumbers, including changes to size requirements and clarifications to terminology for defects and tolerances.

The modified and new standards are found in the following:
Part 2 Grade Requirements for Fresh Vegetables.
Grades and Requirements for Greenhouse Long Seedless Cucumbers, paragraphs 148-154.
Grades and Requirements for Greenhouse Miniature Seedless Cucumbers, paragraphs 200-206.

The CFIA is committed to providing industry with sufficient time to adjust product grading and labels. The transition period begins July 7, 2023, when this change came into force, and ends on January 6, 2024.

As of January 7, 2024, the previous grade requirements will cease to apply, and all regulated parties must comply with the new requirements.

Consult the notice to industry to learn more.

Questions or concerns can be sent to [email protected].

The DRC extends its thanks and appreciation to members of the fresh produce industry review team and other industry stakeholders who contributed to reviewing the existing grade standard and the development of the new grade standard for mini cucumbers. Publication of an updated standard for greenhouse tomatoes is expected in the coming months.

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Membership Updates for June 30th, 2023

Welcome new members!

From May 16 until June 30, 2023, the DRC welcomed the following 36 new members:

1022358 BC LTD.

BC

Canada

14953134 CANADA INC.

ON

Canada

2823899 Ontario Inc

ON

Canada

9468-9247 QUEBEC INC.

QC

Canada

AFROCAN DIRECT IMPORT INC.

ON

Canada

AGRIKO TRADING LIMITED

BC

Canada

ANUSAYA FRESH CANADA LTD.

BC

Canada

AWR GLOBAL (Also d/b/a 8499055 Canada Inc.)

ON

Canada

BAROHUP (Also d/b/a Love April)

CA

United States

BERRY PEOPLE LLC

CA

United States

BISKRA-DZ LTD.

ON

Canada

CATAB IMPORT INC. (Also d/b/a Catab)

BC

Canada

CQR LOGISTICS (A d/b/a of 9089365 CANADA INC.)

ON

Canada

EAST COAST GROWERS FAMILY OF FARMS, INC.

FL

United States

EXPORTADORA CRUZ BAUTISTA SRL

La Vega

Dominican Republic

FARM GIRL CANADA INC.

ON

Canada

FEXINCO INC.

ON

Canada

FRESH VER SAPI DE CV (También haciendo negocios como Fresh V)

Veracruz

Mexico

GEORGE REDIES

BC

Canada

GLEZ  FRESH (A d/b/a of 14111648 Canada Inc.)

AB

Canada

GWILLIMDALE PRODUCE LTD.

ON

Canada

KONOL INDUSTRIES LTD.

BC

Canada

LE SOLEIL INTERNATIONAL INC.

ON

Canada

LEGEND PRODUCE LLC (Also d/b/a Legend Produce / Sweet Legend)

AZ

United States

MITTAL IMPEX (A d/b/a of 10517232 Canada Inc.)

ON

Canada

NEW CARROT FARMS, LLC

CA

United States

PATTERSON PRODUCE INC.

QC

Canada

RENSO TECHNOLOGY (CANADA) CORPORATION

BC

Canada

S. S FOOD TRADING (Also d/b/a 1129977 B.C. Ltd.)

BC

Canada

SANTIS PRODUCE LLC.

TX

United States

SCARLA FRUIT (A d/b/a of 9492-9122 Québec Inc.)

QC

Canada

VALLEY FIELD FOODS (A d/b/a of 9386-4171 Quebec Inc.)

QC

Canada

VERKA FOOD INTERNATIONAL LIMITED (Also d/b/a Verka)

BC

Canada

VIETNCA TRADING LTD. VIETNCA TRADING LTD. (Also d/b/a Viet S)

BC

Canada

VPCUPE INC.

ON

Canada

ZOL GLOBAL TRADING (A d/b/a of 1000257126 Ontario Corp.)

ON

Canada

DRC Membership: change in status

As of June 30, 2023, the following organizations no longer hold a DRC membership:

AGUACATES CORREY SA DE CV
(También haciendo negocios como Aguacates Correy)

Michoacan

Mexico

BDF INTERNATIONAL LTD.

BC

Canada

CDMG BUSINESS LTD.

BC

Canada

FRUITS ET LÉGUMES ALIOUNE INC.

QC

Canada

GREEN VISION PRODUCE DISTRIBUTORS INC.

ON

Canada

ILYANA WHOLE FOODS (A d/b/a of 11148311 Canada Inc.)

ON

Canada

LES ALIMENTS FAIGNON INTERNATIONAL (Faisant également sous Faignon Putchu)

QC

Canada

MARCHE JUNAID (A d/b/a of Tariq Mahmood)

ON

Canada

MILL CREEK FARM (A d/b/a of 2202558 Ontario Limited)

ON

Canada

NOON & NOOR (A d/b/a of Noon & Noor Trading Limited)

BC

Canada

PELSA AGROPECUARIA S.A. De C.V.

Jalisco

Mexico

ROYALHALO PRODUCE LTD. (Also d/b/a Royalhalo)

BC

Canada

SAGHI KARIM

QC

Canada

SAIRAJ ENTERPRISE CORPORATION

BC

Canada

SUN-RYPE PRODUCTS (A Division of A. Lassonde Inc.)

BC

Canada

TAYLORS CONTINENTAL FOODS

ON

Canada

THE GLOBAL GROCERS INC.

ON

Canada

TOP STAR INTERNATIONAL TRADING (A d/b/a of 10612952 Canada Limited)

ON

Canada

UNITED WORLD CARGO LIMITED

BC

Canada

VAN CHEONG TEA INC.

BC

Canada

VISION IMPORT EXPORT TRADE INC.

ON

Canada

For details regarding a change in status, please contact the office (see details below).

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 the 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.

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What Triggers the Fruit & Vegetable Dispute Resolution Corporation’s (DRC’s) Bonding Policy?

Any membership applicant, current member, or a Responsibly Connected Person, who fail to meet the conditions outlined in the DRC’s Operating Rules may be subject to the DRC’s bonding policy.

The DRC bonding policy requires that bonds or other forms of financial security be provided as an assurance to the membership that the entity posting the security will conduct under the DRC’s By-laws & Operating Rules. Depending on the circumstances, a bond may be posted by an applicant, a member, a responsibly connected person in respect of a member, or an employee of a member.

These are the most common circumstances that may trigger DRC to request financial security:

Membership applicants which:
• Have a CFIA Food safety license issued under the Safe Food for Canadians Regulations (SFCR) or a PACA license revoked or suspended within the last five years from the day a membership application is submitted.
• Have been terminated with cause or expelled from membership in the DRC within the last five years from the day a membership application is submitted.
• Have failed to comply with an arbitration award or a mediated agreement within the last five years from the day a membership application is submitted.
• Have filed for bankruptcy or suspended the payment of debts within the last five years from the day a membership application is submitted.
• Have suspended the operations of a business without fully meeting its financial obligations within the last ten years from the day a membership application is submitted.

Members which:
• Have failed to comply with an arbitration agreement or mediated agreement.
• Have failed to comply with DRC Trading Standards General Rules of Conduct.

If a member who has posted financial security violates a provision of DRC’s By-laws and Operating Rules during the bonding period, the DRC may distribute the funds, as provided in the Security Agreement between the member and the DRC.

For more information about the DRC’s Bonding Policy, call 1.613.234.0982 or submit an inquiry through our Help Desk General Inquiry form. 

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Canada’s Fresh Fruit and Vegetable Grade Standards – Beyond the Obvious.

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

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Membership Updates for May 15, 2023

Welcome New Members

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

14962532 CANADA INC.

ON

Canada

ADASS IMPORT EXPORT LLC.

TX

United States

ALL SEASON FOOD MARKET (A d/b/a of 2755591 Ontario Inc.)

ON

Canada

ANNAN ECOMMERCE INC.

BC

Canada

BIMAL PATEL (Also d/b/a SBimal Llc.)

CA

United States

BJS FARMS LTD.

BC

Canada

BLACK CHROME TRADING INC.

ON

Canada

DD ENTERPRISE (A d/b/a of Deepkumar Mistry)

ON

Canada

DISTRIBUTION & TRANSPORT RICARDO INC.

QC

Canada

DISTRIBUTIONS KHALED (A d/b/a of Khaled Aldweib)

QC

Canada

DRISCOLL’S CANADA OPERATIONS, INC. (Also d/b/a Driscoll’s of Canada)

BC

Canada

EMMCAR INTERNATIONAL CORPORATION

AB

Canada

GROCERIZZA INC.

ON

Canada

GRUPO AGUACATERO LOS CERRITOS S DE RL DE CV

Jalisco

Mexico

HAPPY FARMERS GLOBAL INC.

ON

Canada

JALSIN PRODUCE LLC.

AZ

United States

MADHURAM PHARMA COMPANY LTD.

BC

Canada

MAPLE TREE CANADA INC.

ON

Canada

PALMAS WHOLESALE CORP.

ON

Canada

PIERRE LOUIS IMPORT EXPORT (Faisant également affaire sous O

ON

Canada

SAM IMPEX INC.

QC

Canada

SDH IMPEX (A d/b/a of Simplified Tek Inc.)

ON

Canada

UGARIT MARKET (A d/b/a of 2713796 Ontario Inc.)

ON

Canada

VANZARO INC.

ON

Canada

VENUSCA GLOBAL CORPORATION

ON

Canada

VIANDES ET VOLAILLES OMEGA (A d/b/a of 9347-4179 Quebec Inc.)

QC

Canada

YETI REFRIGERATED TRANSPORT INC.

AB

Canada

DRC Membership: change in status

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

11583883 CANADA LTD.

ON

Canada

A1 IMPORTS INC.

QC

Canada

ABDELHAFID BETTA (Faisant également affaire sous AREFFAD FOODS)

ON

Canada

ALBERTO CALIFORNIA GRAPE JUICE (A/d/b/a of 1142951 Ontario Limited)

ON

Canada

AMBAKITI QUALITY PRODUCE INC.

ON

Canada

ASF IMPORT SERVICE (A d/b/a of 1070722 B.C. Ltd.)

BC

Canada

BERRY SUNNY INTERNATIONAL LLC

SD

United States

CHANG LONG TRADING LTD.

BC

Canada

CHARIS BROTHER CANADA TRADING (A d/b/a of Jinchul Kim)

BC

Canada

CHAROEN POKPHAND FOODS CANADA INC. (Also d/b/a CPF Canada)

ON

Canada

COMERCIALIZADORA Y EXPORTADORA ENTRE VALLES SpA

Coquimbo

Chile

DAILY VEGGIES (A d/b/a of 9900390 Canada inc.)

ON

Canada

EXPORTADORA CURICO LIMITADA

Maule

Chile

EXPORTADORA FRUTICOLA DEL SUR S.A.

Lima

Peru

GRD ENTERPRISES (A d/b/a of 2211223 Alberta Ltd.)

AB

Canada

HOMEGROWN HEAT INC.

ON

Canada

IMPERIAL LEGACY MANAGEMENT INC.

AB

Canada

KK BEE LTD.

ON

Canada

NATURE’S EMPORIUM LIMITED PARTNERSHIP

ON

Canada

OCEAN WAVE IMPORTS INC.

ON

Canada

PRESTON HARDWARE (1980) LIMITED

ON

Canada

QUAESTUS TRADING AND CONSULTING INC.

ON

Canada

VILLAMEX FARMS, LLC

TX

United States

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 the 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.

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AUTOMATED IMPORT REFERENCE SYSTEM

The Automated Import Reference System (AIRS) is a reference tool that shows the import requirements for Canadian Food Inspection Agency (CFIA) regulated commodities.

If you are planning on importing fresh fruits and vegetables into Canada or are an exporter intending to export fresh fruits and vegetables to Canada, CFIA-AIRS will provide you with the requirements that a Canadian company must comply with in order for that product or commodity to be able to enter Canada. A few of these requirements are:

• Dispute Resolution Corporation Membership, unless exempted
• CFIA Safe Food for Canadians License
• Electronic Date Interchange (EDI) – Integrated Import Declaration (IID) or Confirmation of Sale (COS) – Government form
• Labeling
• Phytosanitary if applicable

If you want to learn how to use CFIA-AIRS, click on the following link and follow the instructions:

CFIA Automated Import Reference System

If this would be your first-time using CFIA-AIRS, we recommend using the following tutorial link:

CFIA-AIRS Tutorial

If you have any questions about this tool, do not hesitate to contact us at DRC’s Help Desk.

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ARBITRATION DECISION BRIEF: Whether the Respondent’s return is reasonable.

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 8th, 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 13th, 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/)

Categories
Uncategorized

Membership Updates for April 15, 2023

Welcome New Members

 

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

 

1383408 B.C. Ltd.

BC

Canada

14301366 CANADA INC.

BC

Canada

CAPPADOCIA IMPORT TURKISH FOOD INC.

AB

Canada

CHIYUE FOOD PROCESSING INC.

ON

Canada

ELISUR ORGANIC S.A.C.

Chanchamayo

Peru

FERME LISE CHARBONNEAU INC.

QC

Canada

FREITAS BROS. FARMS, LLC

CA

United States

FRESHBOUND TRANSPORTATION & LOGISTICS INC.

ON

Canada

FRUTOS LA AGUADA S. A. (Also d/b/a La Aguada)

Osorno

Chile

HARVESTDANCE INTERNATIONAL INC.

ON

Canada

KOMERA INC.

MB

Canada

LE GROUPE D’AFFAIRES LR INC.

ON

Canada

MAYA FRESH HARVEST, LLC

TX

United States

PACIFICO FOOD DISTRIBUTORS LTD.

BC

Canada

PRIME TROPICALS OF AMERICA LLC.

TX

United States

RALPH’S PRODUCE & JUICE LTD.

BC

Canada

SEALINE TRADING LIMITED

BC

Canada

SHAHG TRADERS INC. (Also d/b/a ShahG Traders)

ON

Canada

SK ORGANICS FRUITS S.A.C. (También haciendo negocios como SKO Fruits)

Callao

Peru

 

DRC Membership: change in status

 

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

 

12322145 CANADA CORPORATION. (Also d/b/a Importation Tropicale KJ)

QC

Canada

9369-8827 QUEBEC INC. (Faisant également affaire sous Méditerrannéene de Négoce)

QC

Canada

ANTELOPE DISTRIBUTING, INC.

CA

United States

BARLIN ENTERPRISE CANADA LTD.

BC

Canada

BELLE MÉDITERRANÉE (A d/b/a of 8381895 Canada Inc.)

QC

Canada

BHANDARI FOOD TRADING INC.

ON

Canada

CURATION FOODS, INC.

CA

United States

D FARM (Faisant également affaire sous 9197-8577 QUEBEC INC.

QC

Canada

EXCEPTIONAL FUTURE LLC. (Also d/b/a Exceptional Future)

CA

United States

FRUTERA EUROAMERICA II SPA

Región Metropolitana

Chile

INIAGRIH INC.

QC

Canada

J. FRANCO BUSINESS S.L. (También haciendo negocios como El Papa Pepe / Broadway / Enfado)

Spain

Spain

JOE RUBENSTEIN LIMITED

ON

Canada

KALESA DE MANILA INCORPORATED

ON

Canada

KNIGHT’S APPLEDEN FRUIT LTD.

ON

Canada

LASANI ONTARIO INC.

ON

Canada

LES ALIMENTS DU MAGHREB INC.

QC

Canada

M & N IMPEX (A d/b/a of 9366-9810 Quebec Inc.)

QC

Canada

MAHDI ET SALAH IMPORT (Faisant également affaire sous 9433-6013 Quebec Inc.)

QC

Canada

MARCHÉ CASTEL (Faisant également affaire sous 9246-1144 Québec Inc.)

QC

Canada

NATURE’S WAY FARMS, L.L.C.

TX

United States

OPERADORA COMERCIAL DATI S DE RL DE CV (También haciendo negocios como Mexafruits)

Queretaro

Mexico

PAISANO CAPITAL SAPI DE CV (También haciendo negocios como Productos Paisano)

Ciudad de Mexico

Mexico

PRODUCTOS SELECTOS MARROKO S.A. de C.V.

Nuevo Leon

Mexico

RALPH’S PRODUCE LTD.

BC

Canada

SHUBHAM SUPERMARKET LTD.

AB

Canada

STANLEY MARKET LTD.

BC

Canada

SUN BEST FRUIT (A d/b/a of  1054741 Alberta Ltd.)

AB

Canada

UNEARTHED PRODUCE (A d/b/a of Christopher Hunt)

PE

Canada

WORLD-VIEW AMERICA COMPANY (A d/b/a of Young Suck Choi)

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 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.

 

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