Although the GCA arbitration system is designed so
that exporters can use the system directly from source countries, it is
advisable to have local representation at the arbitration. The GCA
administration will provide all reasonable assistance to assure a fair hearing
regardless of how far away a respondent may be, but there are certain facts and
procedures of which the system assumes all participants have a good
understanding.
To protect oneself from oversight, it
is a simple matter for an exporter to nominate a local importer to appear on
their behalf in an arbitration. Most importers will perform this service free of
charge and the practice is quite common. Local representation helps in a number
of ways. First of all, documents and sampling usually move along more
efficiently. When a piece of paper or a sampling order is misplaced, local
people can trace the problem more quickly. Second, local representatives usually
have more experience with the arbitration system and can guide the exporter
through some of the details.
For example, it is clearly stated that blanket
contentions are not admissible in quality arbitrations. That is to say, one
cannot simply ask for a quality allowance because 'the coffee is bad'. On the
other hand, an experienced person would point out that a quality complaint
should not only be detailed, but also be all encompassing. There have been
quality arbitrations where a claimant has complained only about the grade of the
coffee. When reviewing the samples the arbitrators also found cup deficiencies
but felt unable to include the cupping problem in their award because the
claimant did not claim on the cup. An experienced claimant would make a claim
for certain grade defects (e.g. black beans, sour beans or husks) 'that
sometimes reflect in the cup quality'.
The need for local representation in technical
arbitrations is more obvious. The details of why and how contractual obligations
are determined can be complex. An exporter's experience is usually mostly sales
oriented, whereas importers (and most technical arbitrators for that matter),
have the broader experience of being both buyer and seller in the international
coffee market.
The final advantage to having local representation
is gaining a better understanding of the award. Most awards are very simple
statements like: 'Based upon the evidence submitted, we award X to the seller
[or buyer], and the cost of the arbitration to the buyer [or seller]'. It is
rare that an award includes any explanation as to why the arbitrators decided
the way they did.
Because most arbitrators are experienced coffee
people, with equal experience as international buyers and sellers of coffee,
they understand both sides of the transaction. 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, and it is not uncommon for some to feel they have been treated unfairly
in the arbitration proceedings. Someone who has not experienced the business
from both sides cannot always see how the other party was legitimately hurt by
their actions and may sometimes think that the other party won the award because
of a bias in the arbitration system.
In quality arbitrations the arbitrators do not know
who the parties are. They see only the complaint and the defendant's reply,
without names. After this the coffee does the talking. Therefore, bias in
quality arbitrations is virtually impossible. In technical arbitrations, the
arbitrators do see the names of the parties but they are both buyers and sellers
of coffee and so understand both sides of the business; before being appointed
they are pre-screened about any personal contacts they may have with the parties
to the dispute, and GCA legal counsel monitors the proceedings. A local
representative might not know exactly how the arbitration award was decided, but
they should have a clear view of the proceedings and be able to explain more or
less how an outcome was determined. This is very helpful for an exporter in
deciding whether or not to appeal.