Presentation on theme: "1 The International Cotton Association Ltd Your Partner in International Cotton Business."— Presentation transcript:
1 The International Cotton Association Ltd Your Partner in International Cotton Business
2 On 9th December 2004, the name Liverpool Cotton Association was changed to International Cotton Association the International Cotton Association
3 Our Standards:- Integrity Reliability Impartiality Service
4 International Membership Members from about 60 countries involved in the Cotton business:- Growers Spinners Merchants Controllers Banks Insurance companies All these are represented on our Board of Directors, to ensure impartiality and balance
5 International Membership Currently estimated 70-80 percent all the raw cotton traded internationally, bought and sold subject to the International Cotton Association Rules – otherwise known as the- INTERNATIONAL RULES
6 The International Rules are designed to be fair to both buyer and seller protecting and reflecting their interests on a totally impartial basis. The ICA provides support to an Industry whose value in trade exceeds 20 billion U$ year without a single bale of this cotton, physically passing through Liverpool. The location of Liverpool as a neutral location, guarantees our impartiality.
7 Our Objectives To serve buyers and sellers of raw cotton by facilitating and promoting fair trading. To reduce the risks involved in international trading by providing a clear framework of rules within which both buyer and seller can operate To support the philosophy of sanctity of contracts for all parties, on an international level
8 Our Objectives To provide Trading rules supported by a standard, simple proforma ICA contract An Arbitration service producing Awards that can be enforced in the courts of most countries in the world To provide Protection for all parties, by way of a clear, internationally recognised set of Trading Rules and Arbitration procedures.
9 PROTECTION FOR INTERNATIONAL COTTON BUSINESS INTERNATIONAL COTTON RULES
10 The International Rules are intended to apply to all parties involved in the cotton chain: Growers Ginners Shippers Agents Spinners Who benefits from using the International Rules?
12 THE INTERNATIONAL RULES AND BYLAWS OF THE ICA: THE INTERNATIONAL RULES
13 International Rules You may not be able to see into the future…but you can prepare for it.
14 The ICA Trading Rules anticipate what can go wrong with a contract- and provide Rules that let both Buyers and Sellers, to deal with it. These Rules act as PROTECTION for your business, by setting out your RIGHTS The Rules can supplement your contract, or form the basis of your contract. This is looked at later in more detail. The International Rules
15 By adopting and applying the ICA Rules to your contract, you will know what your rights are in the case of any: Late shipment Late opening L/Cs Sampling of cotton Quality Problems Underweight, or overweight shipments Insurance for shipments Closing out contracts The International Rules
17 The Rules are a framework recommended for the purchase and sale of raw cotton. International Football- both sides agree to play to the same rules. International Trade - buyers and sellers can agree to trade on the same rules The International Rules
18 The Referee in a football match is there to ensure that both teams play by the rules- and if they do not, that the other teams rights are to be respected The ICA offers this service - to referee the game of cotton
19 REMEMBER!! The Trading Rules provide the framework for a contract. But the parties must decide if they are acceptable in every detail. This means that they can, if they agree, exclude some of the Rules. ICA Rules and Arbitration in your contract means both parties must apply and observe these Rules UNLESS both parties have also agreed that a RULE should not apply, or should be altered in some way.
20 The International Rules What happens if a contract breaks down? Rules 225 provides for closure and invoicing back. If for any reason a contract has not been, or will not be, performed (whether due to a breach of the contract by either party or due to any other reason whatsoever) then that contract must be closed by being invoiced back to the seller in accordance with our rules in force at the date of the contract
21 Arbitration The Role of the Association as an Arbitral Authority
22 Arbitration is by definition: - The voluntary submission of a dispute between two parties for a decision by a third party or two other parties of their choice ARBITRATION
23 ICA cannot advise arbitrators what to decide, or even to assist them to decide. The Associations role is to facilitate, and manage the arbitration process ARBITRATION ICA procedures are based upon the Arbitration Act 1996, and incorporate the mandatory provisions of this Act.
25 By specifying Arbitration in your contracts- you are agreeing to chose Arbitration to resolve your disputes There must first be an agreement between the parties that the dispute will be decided by Arbitration – The Arbitration Agreement Where might you find an Arbitration Agreement? Choosing Arbitration
26 The Arbitration Agreement It can be written in to the Contract Or evidenced in writing, as agreed between the parties
27 ARBITRATION There must be something in writing which evidences the fact that arbitration was agreed by the parties. This could be recorded by: Fax Correspondence Email
28 We recommend using the following wording from our ICA Contract, as your Arbitration Agreement: All disputes relating to this contract will be resolved through arbitration in accordance with the bylaws of the International Cotton Association Limited. This wording incorporates the Bylaws which set out the Associations arbitration procedure. ARBITRATION
29 ARBITRATION Your Contract (and Arbitration agreement) may be on one piece of paper, but they are considered to be separate agreements. This means that Arbitration Agreement is not affected if the Contract is unenforceable for some reason
30 ICA MEMBERS No application fee/or A reduced application fee NON-MEMBERS Application fee This will be reduced if decide to also become a member when apply for Arbitration ICA ARBITRATION
31 ARBITRATION Who CANNOT use ICA Arbitration?.
32 ICA Members that have been expelled or suspended may be prevented from commencing arbitration under the Associations Bylaws ICA Members who have traded with a defaulter If a non-registered firm has traded with firm listed on the ICA or CICCA default list then it too will be refused arbitration facilities.
33 Disputes will be resolved in a fair and impartial manner ARBITRATION
35 The ICA can offer further protection to the International Trade The ICA List of Unfulfilled Awards (or Default List)
36 ICA list of Unfulfilled Awards The ICA expects parties to honour Arbitration Awards If an Award is not honoured, the ICA can take steps to publish the details of the other party or (Defaulter) on a List, which is sent to the Membership. ICA Members may be subjected to disciplinary action if they trade with a Defaulter
37 How does this work? A Party must fail to honour an Award If complaint is upheld: ICA Members and CICCA Member Associations may be informed. The ICA must receive a request to list the defaulter The ICA will check the facts
38 The ICA Default List is NOT a substitute for formal enforcement of an Award If you have not been paid, you will have to pursue the payment through the courts Enforcement of Awards
39 1958 New York Convention (The Convention on the Recognition and Enforcement of Foreign Arbitral Awards). Under the Convention signatory will require that the country under which the arbitration was conducted must also be a signatory. Most of the countries in the world are signatories. Enforcement of Awards
40 International Rules Cotton Shipper Cotton Grower Cotton GinnerCotton Spinner English Law & Arbitration Act 1996 1958 New York Convention Protection
41 Our Membership is growing internationally More countries are trading on ICA Rules If you choose not to- you may be left behind
42 Acceptance, Understanding, Application of the International Rules, means we have a level playing field for International Trade
43 International Cotton Rules Always be prepared
44 The International Cotton Association has members all over the world… …and more people are adopting the International Rules
45 OUR OTHER SERVICES Publications and circulars. Membership directory contact addresses members Laboratory fitted with HVI Spectrum Full range of standard boxes Quality arbitration facilities On-line Guidebook to Arbitration Procedures Opportunity to Train as a Technical Arbitrator
46 International Cotton Trade Seminar Educational two week conference on all aspects of the raw cotton trade International Cotton Trade Conference and Dinner Keynote presentations from international speakers. Dinner for 800 delegates and guests OUR ANNUAL EVENTS
47 Change is constant, we need to embrace the world. Communications are instantaneous, cost are rising, and markets growing. We welcome new members to join us and reinforce this vital ingredient of our business
48 The International Cotton Association of the future Let us get together make a strong Association for the long term protection of our industry.
49 World wide harmony International Cotton Trading Rules
50 The International Cotton Association Ltd Your Partner in International Cotton Business