February 25, 2015

Why an Investment in a DRC Membership Can Pay Dividends

By: Tom Oliveri

Supplementing my last guest column blog written by Fred Webber, President and CEO of the Fruit & Vegetable Fruit Dispute Resolution Corporation (DRC), I would like to share my perspective on the tangible benefits of the value of DRC membership. Over the past several weeks, two separate Western Growers (WG) members have contacted me about the inability to get their contracts paid in full from Canadian buyers. Both calls concern different Canadian buyers and both are DRC members, who for one reason or another, were failing to remit the full amount of the FOB contract to the WG shippers. Both shippers that contacted me wanted to pursue the unpaid balance(s) against the Canadian buyers as there was no basis for failing to pay in full. In each scenario, it was determined that the Canadian buyers were indeed members of the DRC. Unfortunately, only one of the WG shippers was a member of the DRC. In that one dispute, because of their DRC membership, I was able to assist the WG member by filing a Notice of Dispute (informal complaint) with the DRC against the Canadian receiver and hence pursue the balance due.

Unfortunately, for the other WG shipper that was not a DRC member, I was unable to file a Notice of Dispute (informal complaint) and therefore was unable to provide assistance in handling an official claim against the Canadian buyer. While the DRC rules do provide for a process to request the DRC member to submit voluntarily to mediation with a non DRC member, in this case, the Canadian refused. While the WG shipper wanted to become an immediate member of the DRC hoping that retroactively it would allow for a claim filing, regrettably you must be a member of the DRC prior to any disputed transaction occurring. The best analogy I can think of is a DRC membership is similar to insurance; you need to have full coverage in affect prior to the occurrence of a loss in order to be covered. For this reason I strongly recommend to all shippers who do business in Canada to become a member of the DRC thus providing you with a vehicle to pursue any disputed contract. Unfortunately, without a DRC membership your only alternative would be to hire a Canadian Attorney and pursue the matter civilly through the Canadian Courts. Needless to say, this alternative is not cost efficient when compared to the membership fee (investment) in the DRC.

The DRC Membership fee of $765.00 U.S. is a smart investment to pre-position your company, so that in the event of a problem you will have access to a proven arbitration process that will efficiently and in a timely matter settle your dispute. Also, all DRC members are vetted prior to being granted membership.

If you have any questions on how to become a member of the DRC, please do not hesitate to contact me with any questions at 949 885-2269 or email me at TommyO@wga.com.