According to ICA, arbitration requests are markedly down in the first half of 2013. This reduction comes as a relief to the association, after record highs were recorded in 2012. The 247 requests received in 2012 represent a five-fold increase in the normal annual average. This year, 52 requests have been filed as opposed to the 135 received during the same period last year.
ICA admits that it did struggle to cope with the high volumes of arbitrations and is now in the process of introducing a series of initiatives to ensure that its global arbitration system is prepared should the industry suffer further market setbacks.
With the drop in arbitration requests, ICA has been able to move forward with plans to improve and modernize its arbitration system. A new Head of Arbitration has been appointed and steps are being taken to streamline the process as well as reduce the cost and time taken. ICA is working to digitize files and develop an electronic case management system. A pool of 10 chairmen has also been appointed to write awards, mentor new arbitrators, and chair tribunals and technical appeals.
“In an ideal world we want to see zero arbitration requests, with all contracts being honored 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 on 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%. The association now has 530 members (firms and individuals). The association has also introduced new membership categories for agents and associations to better represent the entire supply chain.
The association says it hopes that arbitration requests continue to drop, saying, “If the cotton community works together to promote safe trading and contract sanctity, this could be achieved.”