A recent arbitration case highlighted an important but often overlooked issue: ensuring that the legal entity named in a contract is the same legal entity that holds a membership with the Fruit and Vegetable Dispute Resolution Corporation (DRC).

In this case, both the claimant and the respondent were DRC members. However, the written contract identified the claimant using a company name that did not match the claimant’s legal name registered with DRC. Although the ownership and personnel behind both names were the same, the contract itself referred to a different legal entity.

The claimant argued that DRC should still have jurisdiction because the respondent “knew” they were dealing with a DRC member and that the incorrect name in the contract was merely an oversight.

The arbitrator disagreed. DRC By-laws and Dispute Resolution Rules clearly state that jurisdiction applies only to disputes between DRC members. It is the responsibility of the parties to ensure that the legal entity named in the contract is a member of the DRC. The contract also lacked a DRC arbitration clause, which could have extended jurisdiction to a non-member entity. As a result, the arbitrator found that DRC had no jurisdiction over the dispute.

While this is only a summary of the case, it underscores a critical point: DRC membership applies strictly to the legal entity that has been accepted as a member. Membership rights are not transferable, and members must keep their information current.

Key membership obligations

DRC By-laws require that:

•  Membership covers only the specific legal entity approved by DRC.

•  Membership rights cannot be transferred to another legal entity, even if ownership is the same.

•  Members must update their membership information promptly when changes occur.

Recommendations for members

To avoid jurisdictional issues and ensure your transactions are properly covered, consider the following:

•  Multiple legal entities: If you own more than one company and use each for trading, ensure each entity has its own DRC membership.

•  Name or ownership changes: Report any legal name changes, amalgamations, or changes in ownership to DRC’s membership department.

•  Sister companies: Many organizations operate multiple related companies. Some may be DRC members while others are not. Transactions with non-members are not covered. Always confirm the correct legal entity.

•  Shared ownership does not equal shared membership: Common or similar ownership does not extend DRC membership rights across entities.

•  Contracts and marketing agreements: Always verify that the legal names appearing in any written agreement accurately reflect the DRC member entities involved.

This case underscores the importance of correctly identifying legal entities in contractual agreements and keeping your DRC records up to date. Taking these steps can help avoid jurisdictional issues and preserve access to the DRC dispute resolution system.

Source: Dispute Resolution Corporation June 5, 2026 newsletter