Does Arbitration fit Agribusiness?
The flexibility and duration of the proceedings are commonly appointed as advantages of arbitration as a dispute resolution method. However, as it is also known, not every dispute has in arbitration its best arena. That said, and noticing the little use of arbitration in conflicts related to the agribusiness, the question title of this article is posed.
It is important to stress that agribusiness involves much more than what is done on the farms. The whole chain of the agribusiness (term coined in 1957 by Goldberg and Davis) includes agrichemical, breeding, crop production, distribution, farm machinery, processing, seed supply, marketing and retail sales, not to mention the international commodities trade.
Analysing the diversity of legal and commercial relationships that can come from this complex chain, it turns clear that many of them fill the arbitrability condition. Besides this, specially nowadays, very specific knowlege is needed in order to resolve the issues arising from this field. For instance, contract farming has peculiarities that are not found in other type of contracts. It is enough to remember that UNIDROIT has already elaborated a document concerning this subject. Even diverse financial operations were created to fit this market, in which is not rare that the “currency’ is the farm production itself. All this meaning that there is a wide range of possibilities for the arbitration, and other ADRs methods, to be adopted in agribusiness, as an alternative to the State courts.
Furthermore, the agricultural production development is seasonal, what means that the duration and costs of the proceedings must be very well administrated. In conclusion, I would say that not only arbitration fits agribusiness, but also agribusiness needs arbitration, in order to reach better results in terms of dispute resolution.
Letícia de Souza Baddauy
Retrieved from Lexology.
Originally published on November 20, 2018.