Arbitration Clause
Contractual frameworks in the global cotton trade provide structured mechanisms for resolving quality disputes between buyers and sellers. The provisions of ICA Clause 14 establish the official procedure for holding quality arbitrations under the rules of the International Cotton Association. This rule governs how disputed cotton shipments are sampled, assessed, and adjudicated by certified arbitrators.
Arbitration Procedure
When a spinner receives a shipment that does not match the contracted grade, the buyer triggers the arbitration clause. Swatches from the shipment are extracted and sent to a neutral laboratory or registered arbitration room for manual and instrumental evaluation. The arbitrators compare these samples against the official standards to measure differences in micronaire, staple length, and colour.
Their findings determine the amount of financial compensation or discount the seller must provide to the buyer. This procedure avoids costly court cases and keeps the cotton trade moving smoothly.
Sample Protection
Strict rules govern the drawing and sealing of samples to prevent tampering before the arbitration. Samples must be taken within a specified number of days from arrival at the port of discharge. Both parties must agree on the integrity of the sealed packages before they are sent for evaluation.
Commercial Binding
Arbitrations conducted under these rules are legally binding on all registered cotton traders worldwide. Companies that refuse to abide by the decisions are placed on a defaulter list, which restricts their ability to trade with other members.