The principle of arbitration

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 texts.

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 1^st 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.