We regularly write about arbitration as an alternative to litigation on this blog and on our sister blog, the China Law Blog. Topics have included the pros and cons of arbitration in the cannabis industry, international arbitration issues, and U.S. Supreme Court cases:
This post is about a recent ruling by the Eleventh Circuit Court of Appeals at the confluence of international arbitration and hemp-derived CBD. The case is Earth Science Tech, Inc. v. Impact UA, Inc., No. 19-10118. (Email me if you’d like a copy of the decision).
Background – Florida company distributes CBD manufactured by El Salvadoran company
Earth Science is a Florida-based company that distributes CBD products throughout the United States. Cromogen Biotechnology Corporation is an El Salvador-based company that supplies hemp-based biotechnology. In 2014, Cromogen entered into a Distribution Agreement with Earth Science that allowed Earth Science to exclusively market, distribute, and sell Cromogen’s CBD oil to other companies. Generally, Cromogen agreed to provide conforming quantities of CBD oil and Earth Science agreed to purchase the oil and sell it in the United States, with the two companies sharing the sales revenue.
The Distribution Agreement included an arbitration clause stating that the contract would be