Conflict Is it a bad word, Consultant Challenges enforceability

Conflict

Is it a bad word?

Consultant Challenges enforceability of Arbitration Policy

Note: Agronomy is the science and technology of producing and using plants in agriculture for food, fuel, fiber, recreation, and land restoration.

John Smith (Smith) a seasoned Saskatchewan consultant specializing in canola and wheat agronomy, entered into an international consulting services agreement (Agreement) with a company in Vietnam called Agro. Smith moved to Hanoi and consulted for roughly six months for the company. Smith was asked to incorporate the use of hazardous and internationally banned chemicals as part of his plan for wheat and canola production in Vietnam. He declined and Agro terminated the Agreement and refused to pay him for his services rendered up to that date.

 

Arbitration Policy (con’t)

Smith filed an action in Saskatchewan, alleging that Agro had violated the terms of the Agreement.

Agro responded by requiring arbitration of Smith’s claim according to an arbitration policy incorporated into the Agreement that excluded litigation as a dispute- resolution mechanism and mandated that Vietnam as the proper location for arbitration.

 

Arbitration Policy (con’t)

Smith opposed this, arguing this the arbitration policy was unfair.

The arbitration policy stated that:

Each party proposes a list of three arbitrators.

The parties alternate by removing one name from the other party’s list of arbitrators

The defendant/respondent in the dispute makes the first strike from the respective lists.

The sole remaining arbitrator decides the claims

 

Arbitration Policy (con’T)

The process of selection clearly results in the nomination of one of the three candidate on the defendant/respondent’s (Agro) list, making the entire process skewed in favor of the party that did not start the claim.

In addition, the arbitration policy stated that Agro may change its terms anytime and without notice and that all cost resulting from any arbitration, would be borne by the plaintiff/applicant (Smith)

 

Case Study 5 Questions

Based on the Supreme Court case Douez vs Facebook, what arguments can Smith make to persuade the court not to enforce the arbitration policy?

How do the facts of this hypothetical case differ form Douez v. Facebook? What would persuade the Canadian courts to side with Agro to enforce the arbitration policy?

How can one-sided, sole method dispute – resolution provisions hurt a company’s business?