ICA arbitrations half year update
At the half year stage, we received 52 requests for arbitration, a marked reduction compared to the 135 requests we received during the same period last year.
During 2012, as continued market volatility resulted in more parties failing to honour their contractual obligations, arbitration requests at the ICA reached a record high of 247 requests, over five times the normal yearly average. These latest half year results see a welcome return to ‘normal’ operating conditions here at the ICA.
“In an ideal world we want to see zero arbitrations, with all contracts being honoured and all disputes being settled amicably,” says Ahmed Elbosaty, ICA President. “It is an ambitious goal, but we believe that the events of the past highlight the importance of contract sanctity and responsible trading.
“Whilst it is difficult to predict what the future holds, sadly many firms do not take a long term, strategic view. They fail to develop strong relationships or respect contract sanctity. Those that do are much better equipped to agree a way forward with their trading partners in difficult times. That is why we are continuing our efforts to strengthen the ICA community, welcoming more new members that represent the entire value chain and have the integrity to abide by contract sanctity.”
Last year ICA membership grew by 15 per cent. We now have over 530 members (firms and individuals) and there are more mills and spinners in the ICA community than ever before. We have also introduced new membership categories for agents and associations to help represent the entire supply chain.
We admit that we did struggle to cope with the high volumes of arbitrations and we are now in the process of introducing a series of initiatives to ensure that our global arbitration system is fit for purpose should the industry experience another blip.
“With the drop in arbitration requests, our plans to improve and modernise our arbitration system have gathered pace”, says Kai Hughes, ICA Managing Director. “We have appointed a new ‘Head of Arbitration’ and a lot of work is going on behind the scenes to streamline the process and reduce the cost and time taken for arbitrations, for instance digitising files and developing an electronic case management system. Our members also voted in new changes to introduce a pool of 10 ‘chairmen’ who will be responsible for writing awards, mentoring new arbitrators and chairing tribunals and technical appeals. A move designed to increase the quality and enforceability of our awards and improve the proficiency of our arbitrators.
“We sincerely hope that arbitration requests continue to drop. If the cotton community works together to promote safe trading and contract sanctity, this could be achieved.”