Especially here in South Florida, businesses frequently find themselves doing business with entities based outside the United States. Whether your contractual partners are based in the USA or elsewhere, it is extremely important to make certain that the arbitration clause in your agreement is drafted with the utmost care. That’s because, whether you’re using Florida rules, federal rules or United Nations rules, if you’ve included provisions about how arbitration will occur (or if it is to occur at all,) the courts will generally follow what’s in that contract. This is another reminder of the profound importance of having a skilled and knowledgeable South Florida commercial contract attorney on your side as you negotiate and draft your commercial agreement, because even one seemingly small provision can have major consequences.
A recent CBD oil contract dispute from South Florida is a good example. The plaintiff was an El Salvador-based supplier of hemp-based biotechnology. The defendant was a Doral-based distributor of CBD oil products. The two entities had a distribution agreement whose arbitration clause indicated that “exclusive International Arbitration through JAMS International using UNCITRAL rules in New York.” The contract also specifically declared that a United Nations convention on International Sales of Goods did not apply.
Just four months after the two entities inked their distribution agreement, the supplier served a demand for arbitration on the distributor. Three years later, the dispute (which encompassed a mixture of contract and tort law claims) went before an arbitration panel, which found for the supplier, awarding $3.9 million in damages.