Grain company disputes seldom become public. They tend to be settled
quietly, behind closed doors, with none other than a handful of
insiders knowing how it was resolved, or even that there was a problem.
While this secretive dealing may have made some farmers suspicious
about what the grain companies have been up to, neither do most grain
traders themselves know what really happens when a dispute erupts
between grain companies and then disappears behind closed doors.
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That’s why Winnipeg arbitrators organized a mock negotiation at the end
of this year’s Grain World conference. They wanted to illuminate their
mysterious world of resolving commercial combat.
“A lot of them will never be in an arbitration,” said Lorraine Idt of
Agricore United, who organized the mock arbitration.
“You seldom get a chance to see how the process works.”
The arbitration was based on a fictitious case involving a grain ship
that arrived in port and got into a dispute with the grain buyer.
During the unloading there was a riot on the docks, a port strike
occurred and time charges piled up.
The arbitrators had to decide who was responsible for what, and who
would have to pay.
A panel of three arbitrators, one appointed by each company and the
third appointed independently, heard the case presented by
representatives of the two battling companies.
Montreal arbitrator John Weale explained to about 50 watchers that
companies that go into arbitration do so voluntarily, agreeing to
follow the arbitrators’ ruling.
Arbitration rulings can be appealed to the courts, but Weale said
courts are loath to overturn a ruling unless there is evidence of gross
injustice or obvious bias by the arbitrators.
Weale said arbitrations can be settled by grain company officials
without bringing in lawyers, but companies generally send lawyers
anyway. That tends to make arbitrations more expensive than they have
to be.
Idt said she hopes that grain company employees who saw the mock
arbitration will realize that disputes can be avoided if contracts are
written more clearly or fully.
“It brings to grain traders and other people in the industry the
importance of what they agree to at the outset,” said Idt.
“It’s important how you make your contract, because everything goes
from that point.”
