A contract becomes final and binding when buyer and
seller agree on a transaction: verbally, by e-mail, by fax or otherwise. For
this to be possible all standard terms and conditions must have been agreed to
previously, including how possible disputes will be resolved. Arbitration
provides a neutral, specialized platform to resolve a dispute when amicable
settlement proves impossible.
The international trade in coffee is complex by
nature and so dispute resolution can be quite complicated as well: it requires
experience and insights not easily found outside the coffee trade itself.
Disputes also need to be resolved quickly and fairly, preferably amicably, with
buyer and seller agreeing to a mutually acceptable solution. But if this proves
impossible then arbitration provides the means to resolve the matter in an
impartial manner without involving a court of law where proceedings could be
subject to delays (possibly holding up disposal of the goods) and where expert
knowledge may not be easily accessible. Also, the exercise could be very costly.
This is the main reason why the ECF and GCA Standard Contracts expressly exclude
recourse to the law for the settlement of disputes, stating instead that this
shall always be through arbitration. Go to www.ecf-coffee.org and www.green-coffee-assoc.org for the full contract
Arbitration rules have been set by the professional
coffee associations in importing countries. The most important arbitration
centres in Europe are London (see section 07.09), Hamburg and Bremen (see
section 07.10), and Le Havre (see section 07.11). Other arbitration centers are
Amsterdam, Antwerp, Genoa, Rome and Trieste. In the United States arbitrations have always been held
in New York but effective January 1st 2006 they may also be held in other
locations as approved by the GCA. Until end 2005 New York was the only location
where arbitrations could be held but effective 1st January 2006 arbitrations may also be held
elsewhere in the US. Interested parties should contact their US connection or
the GCA for an up to date list of GCA-approved locations.