Key points of arbitration
Some Bangladeshi cotton importers might face arbitration over forward-booking trade cancellations with international traders as they signed deals to procure cotton at higher prices.
The importers will have to face arbitration for dispute in contracts, as they booked at higher prices earlier, but recently prices began to drop significantly. The Daily Star publishes some major points on arbitration, based on a statement of the International Cotton Association (ICA).
Since a majority of the importers handle trade under the bylaws and rules of ICA, the UK-based settlement organisation, they have the right to apply for ICA arbitration in the event of a contract dispute.
The ICA arbitration awards can be enforced in foreign courts under international law, thanks to an agreement made in New York on June 10, 1958 on the recognition and enforcement of foreign arbitral awards, ICA said in a statement.
An application for arbitration is free to ICA members registered with the association on the date of the contract giving rise to the dispute.
Members also pay reduced fees and stamping charges for technical and quality arbitration, according to the ICA statement. For arbitration, one has to send the ICA a completed 'Request for Arbitration' form.
The person will have to appoint an arbitrator and inform the other party of intentions to go to arbitration, the ICA statement said.
The statement said ICA requires the claimant to pay the first deposit of £3,000 to cover costs, fees and expenses of the arbitration. The respondent will also be asked for a deposit of £3,000.
Generally, arbitration takes place in the UK, but it might take place in other countries also.
ICA arbitrations may take place in other countries, provided the ICA arbitrators are able to meet to discuss the case and they keep in contact with ICA, who administers the process, the statement said.
“A large number of ICA arbitrations take place by telephone conference calls, as well as physical meetings. The applicable law remains as English Law. The award needs to be stamped by the ICA to be effective, and so the final award must be returned to us,” ICA said.
The ICA bylaws and rules are the default positions for parties in the event that they have not agreed on specific terms for trading, the statement said, adding much will also depend upon what the parties have agreed should apply in their contracts.
The parties can add whatever they consider relevant to their contract as long as they both agree, the ICA statement said.
The statement said according to English Law, a contract does not have to be signed if there is evidence that it was agreed, and represents the terms that the parties have agreed are binding on them.
“Establishing a contract requires evidence of a clear offer and an unconditional acceptance. A signed contract is obviously the best way to demonstrate this. Consideration will be required in order to ensure that the contract is binding on the parties. This normally requires some evidence that both sides are getting some form of benefit from the deal (this is a very simplified summary),” the statement read.
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