ECC Article 7 states that where arbitrators
establish that the coffee is unsound or of radically different quality, and
award invoicing back, then they shall also establish the price having in mind
all the circumstances. As an example, the quality difference might be so
enormous that it is obvious the shipper made no serious attempt to supply what
they had sold. Hamburg and Bremen arbitrations deal with this somewhat
differently but both sets of rules make special provision for such cases, and
describe them as 'fraud and negligence'.
Hamburg.
The question of fraud or negligence can be pursued only if the claimant requests
this. In this type of case the arbitrators and three umpires are limited to
pronouncing a 'suspicion of fraud and gross negligence' and to fixing an
adequate allowance. The claimant may contest this and demand a technical
arbitration to order annulment of the contract rather than payment of an
allowance. The panel's reasoning must therefore be provided in writing to the
Association by the umpires for possible use in such an arbitration.
Bremen. If
a verdict is required on 'fraud and negligence' then the vote must be secret
with at least three votes in favour for the request to succeed. The award may
provide for an adequate allowance. As in Hamburg the panel provides its
reasoning in writing for possible use in a later technical arbitration.
The buyer then has two weeks in which to demand a
technical arbitration panel to order annulment of the contract instead of
payment of a penalty.