Arbitration

ARBITRATION SYSTEM

Formally established in 1901, the NGFA’s Arbitration System has operated in some form since the formation of the Association on November 9, 1896. It is believed to be North America’s oldest industry-based arbitration system.

The Arbitration System provides a fair, cost-effective and timely way to resolve disputes involving grain, feed, barge and barge freight transactions. Its use is compulsory for resolution of disputes between Active members under the NGFA’s Bylaws. The Arbitration System is also available for resolving disputes with and between Associate/Trading members if the Arbitration Rules are referenced in the underlying contractual agreement or the parties otherwise consent The Arbitration System is kept current through the amendment process at the NGFA’s annual business meeting.

The Rail Arbitration Rules, first adopted on Aug. 24, 1998, supplement the Arbitration Rules. The Rail Arbitration Rules are applicable to disputes between railroads and their customers using the NGFA Arbitration System.

NGFA-member railroads and their customers can use the NGFA Arbitration System to resolve any type of dispute where both agree. All NGFA Active and Associate/Trading members are covered by, and have access to, NGFA rail arbitration unless they notify the NGFA of their desire to withdraw from the Rail Arbitration System within 30 days of membership approval. Thereafter, an Active or Associate/Trading member may withdraw from the Rail Arbitration System after providing 90-day’s advance notice to the National Secretary. See the Participants in Rail Arbitration below for a list of any NGFA-member rail carrier(s) or Active member(s) electing to withdraw from the Rail Arbitration System.

Members Withdrawing from Rail Arbitration

All of the Class I railroads and a number of shortline and regional railroads are participating, as are most NGFA-member grain, feed and processing companies. Thus far, the following companies have elected to withdraw from the NGFA Rail Arbitration System:

Atherton Grain Co. Inc.
Cereal Byproducts Co.
Elburn Cooperative Co.
Farmers Elevator Co. of Biggs & Easton
Harmony-Preston Agri Services Inc.
Keller Grain & Feed Inc.
Marquette Transportation Company
Mid-Coast Grain Company
Quad Commodities Marketing Service Inc.
Revillo Farmers Elevator
Scott Equity Exchange
Settlemyre Seed Company
Canada Steamship Lines
Columbia Grain & Ingredients Inc.
Famo Feeds Inc.
White Commercial Corporation
Hardeman Grain and Seed Inc.
Ingram Barge Company
Lamont Grain Growers
M.D. Thompson & Son Co.
Moore Elevator
Rail America
R.J. O’Brien
See-Mor Grain Inc.

In addition, all Class I railroads and some shortline and regional railroads have agreed to enter confidential mediation on certain rate-related issues upon request by a NGFA Active or Associate/Trading member. The text of these agreements is set forth in this publication.

Arbitration cases are prepared by the parties involved. Decisions are based upon evidence submited by the parties.

Cases are considered by an Arbitration Committee comprised of three persons selected by the NGFA secretary and approved by the NGFA chairman. Arbitrators are employees, active partners, principals, officers, or directors of Active and Associate/Trading members from different geographical areas. Arbitrators generally are selected based upon their personal experience in the type of trade practices or questions involved in the case. Arbitrators must have no commercial interest in the case.

Arbitration Appeals Panel

Committee Chairman: Roger Krueger, South Dakota Wheat Growers Association
NGFA Liaisons: Charlie Delacruz and Mary Hitchcock

First Name
Last Name
Title
Company
City
State
John Anderson Chief Executive Officer Ritzville Warehouse Co. Ritzville WA
James Banachowski Vice President, Eastern Region The Andersons Inc. Maumee OH
Michael Bilovesky Vice President Marketing, Agriculture and Minerals Kansas City Southern Railway Kansas City MO
Steve Campbell Executive Vice President – Head of North American Grains Louis Dreyfus Commodities Kansas City MO
Sharon Clark Sr. VP, Transportation & Regulatory Affairs Perdue AgriBusiness LLC Salisbury MD
Jeffrey Edwards Vice President J & J Commodities A Division of Abbitt’s Inc. Greenville NC
Charles Elsea Chief Executive Officer The Scoular Company Omaha NE
Roger Krueger SVP, Grain South Dakota Wheat Growers Association Aberdeen SD
Edward Milbank President Milbank Mills Inc. Chillicothe MO
Steven Nail President & CEO Farmers Grain Terminal Inc. Greenville MS
Dean O’Harris Commodity Manager Parrish & Heimbecker Inc. Buckeye AZ
Steve Young Grain Merchandiser Grainland Cooperative Holyoke CO

Last updated: July 23, 2014

Parties involved in an arbitration case may appeal the decision of the Arbitration Committee to an Arbitration Appeals Committee, consisting of a permanent chairman and four others selected from a standing Arbitration Appeals Panel appointed by the NGFA chairman.

Usually, the Arbitration Committee or the Arbitration Appeals Committee processes cases by mailing to one another the documentation involved. However, either party may request an oral hearing, in which case it must be granted.

Arbitration committees endeavor to decide cases within 30 days after receipt of papers and documentary evidence pertaining to the case. Each award under the Arbitration System subsequently is published as an Arbitration Decision bulletin and is mailed to all NGFA members. New decisions are also posted on the NGFA web site.

 

USE OF NGFA TRADE RULES AND ARBITRATION RULES FOR CROSS-BORDER TRANSACTIONS IN NORTH AMERICA

Increasingly, NGFA members reference the NGFA’s Trade Rules and Arbitration Rules in contracts with firms located in Mexico and Canada. In addition, Canadian and Mexican firms that become NGFA Associate/Trading members are expressly permitted to reference the NGFA’s Trade Rules and/or Arbitration Rules in their contracts, or otherwise consent to have the NGFA’s rules apply. However, before referencing the rules in cross-border trade, it is advisable to consult competent legal counsel and review at least three international treaties that govern such transactions, which are summarized below:

  • “The United Nations Convention on Contracts for the International Sales of Goods” (52 Fed. Reg. 6262). The United States, Mexico and Canada are signatores to this treaty, which creates a type of international code for sales of goods. Importantly, parties can exclude application of this treaty to particular transactions by express contractual provisions.
  • “The Convention on the Recognition and Enforcement of Foreign Arbitral Awards” (9 U.S.C. Section 201 et. seq.), which governs the enforcement of arbitration provisions and awards between United States and Canadian firms.
  • “The Inter-American Convention on International Commercial Arbitration” (9 U.S.C. Section 301 et. seq.), which governs the enforcement of arbitration provisions and awards between United States and Mexican firms.