Grain Journal - July/August 2008 - (Page 105) Arbitration Upheld – Again IN FEBRUARY DECISION, SUPREME COURT REAFFIRMS MORE THAN 100 YEARS OF SUPPORT A recent U.S. Supreme Court decision in an unrelated industry once again upheld a national policy favoring arbitration agreements. The case of Preston vs. Ferrer, decided Feb. 20, involved a pre-dispute arbitration agreement in a contract between an entertainment lawyer and his television celebrity client. A dispute arose when the attorney invoked the arbitration provision to collect fees allegedly due under the contract. The celebrity client sought a determination from a state regulatory agency that the contract was invalid, because the attorney violated state law by not having the required agent’s license. The Supreme Court upheld the arbitratior’s authority to decide the question, citing the Federal Arbitration Act (FAA). “We hold today that, when parties agree to arbitrate all questions arising under a contract, state laws loding primary jurisdiction in another forum, whether judicial or administrative, are superseded by the FAA,” the justices ruled. Indirect Affirmation The ruling was yet another from the Supreme Court indirectly affirming the validity of arbitration systems like the National Grain and Feed Association’s (NGFA), which has been around in some form since November 1896 and relied upon by grain handlers, feed and feed ingredient manufacturers, millers, and others buying and selling grain and grain products. The NGFA system provides a fair, cost-effective, and timely means of resolving disputes involving grain, feed, feed ingredient, barge, barge freight, and secondary rail freight transactions. Under the NGFA Bylaws, NGFA arbitration is compulsory to resolve disResponse No. 1051 putes between NGFA active member companies. It also is available for resolving disputes between NGFA members and non-members, if the parties agree to arbitration in their contract or consent to arbitration after the dispute arises. How NGFA Arbitration Works Once a dispute goes to arbitration, arguments are prepared by the parties involved in the dispute. Decisions are based upon evidence submitted by the parties. Cases are considered by an Arbitration Committee comprised of three persons generally selected based on their expertise in the type of trade practice or questions involved in the case. Arbitrators must have no bias or commercial interest in the case. Parties involved in an arbitration case may appeal the decision of the original Arbitration Committee to an Arbitration Appeals Committee, consisting of a permanent chariman and four others selected from the Arbitration Appeals Panel appointed by the NGFA industry chairman. Usually, the Arbitration Committee or the Arbitration Appeals Committee processes cases by mail, e-mail, and telephone. However, parties involved in the dispute are entitled to request an oral hearing. Arbitration committees endeavor to decide cases promptly after receipt of papers and documentary evidence pertaining to the case. Each decision under the NGFA Arbitration Sytem subsequently is signed by the arbitrators, published in the NGFA Newsletter, and posted on the NGFA web site at www.ngfa.org. The number of cases filed with the NGFA for adjutication has increased dramatically in recent months. For instance, the number of new cases filed during the first quarter of 2008 was seven times the number from the same period in 2007. J/A GJ 105 http://www.ngfa.org http://www.unionironwork.com http://www.unionironwork.com
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