It is well known in coffee circles that over the years
the number of arbitrations has fallen steadily with most disputes
being resolved amicably. This is understandable
considering that amicable settlement is always much better in that
it may even help to cement the relationship with a buyer, whereas
arbitration often results in the opposite. Winning an arbitration
is all very well but what if it results in the loss of a
(substantial) client?
Unfortunately, no records are published concerning the
number of arbitrations held in different locations, therefore the
win or loose record for exporters is not known either.
But, it is possible to identify some of the more common errors that
might cause an exporter to lose. The buyer is not the enemy!
Keeping buyers informed usually means that most if not all of a
problem can be resolved amicably! Hiding 'bad news' on the other
hand guarantees trouble. Knowingly shipping sub-standard quality
demonstrates disregard for contract integrity, or a lack of quality
knowledge, or both! And not reporting promptly that a shipment may
be delayed can cause much greater damage to the buyer than may
immediately be obvious.
Buyer and seller are partners in a transaction: both are
obliged to play their role to ensure the successful completion and
to minimize the impact of potentially harmful situations.
Keeping the buyer informed of any problems enables timely
corrective action to be taken, thereby saving costs and damages.
Arbitrators will take this into account when it comes to making an
award. And if a claim is received, deal with it! Promptly and
efficiently! Do not ignore a claim in the belief that it will 'go
away'. And if a claim does result in arbitration proceedings being
initiated, co-operate fully because otherwise the exercise will
proceed without your input.
Remember also that those who see the coffee trade from only
one side, such as exporters, do not always appreciate why and how
certain actions or lack of actions can cause their counterpart to
suffer loss or damage. It is not uncommon therefore for
some to feel subsequently that they have been treated unfairly in
the arbitration proceedings. Look for local assistance therefore in
the place or country where the proceedings will be held. This
because local representatives usually have more experience with the
arbitration system and can guide an exporter through some of the
details. A local representative might not know exactly how an
arbitration award was decided, but he or she should clearly
understand the proceedings and be able to explain more or less how
the outcome was determined. This is very helpful for an exporter in
deciding whether or not to appeal against an award. For more go to
07, Arbitration (Link below).
Arbitration awards are normally never published, certainly
not so in the United States, the United Kingdom and
Germany. This is so first of all because they are
considered to be confidential between the parties to the dispute,
and do not concern anyone else. And even if individual parties
agreed to their publication, then still the arbitral body under
whose auspices and rules the arbitration was held might not
encourage publication. This because even with the names of the
parties and arbitrators deleted, the nature of the dispute could
still lead to the identification of any of them. This in turn could
have unwanted spin-off effects. Yet it can also be argued that
especially awards in arbitrations of principle, i.e. arbitrations
that are held with the willing consent of both parties to determine
a question of principle, would provide useful guidance to many. We
agree with you that it would be helpful if existing award archives
were available for review but at this stage such access is not
available.
Posted 11 December 2004