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The The International Cotton International Cotton Association LtdAssociation Ltd
Your Partner in International Cotton Business
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On 9th December 2004, the name Liverpool Cotton Association
was changed to the International Cotton International Cotton
AssociationAssociation
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Our Standards:-
Integrity
Reliability
Impartiality
Service
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International MembershipMembers from about 60 countries involved in the
Cotton business:-
GrowersSpinners
MerchantsControllers
BanksInsurance companies
All these are represented on our Board of Directors, to ensure impartiality and balance
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International Membership
Currently estimated 70-80 percent all the raw cotton
traded internationally, bought and sold subject to the
International Cotton Association Rules – otherwise known as the-
“INTERNATIONAL RULES”
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The International Rules are designed to be fair to both buyer and seller protecting and reflecting
their interests on a totally impartial basis.
The ICA provides support to an Industry whose value in trade exceeds
20 billion U$ yearwithout a single bale of this cotton,
physically passing through Liverpool. The location of Liverpool as a neutral location,
guarantees our impartiality.
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Our ObjectivesTo serve buyers and sellers of raw cotton by facilitating and promoting fair trading.
To reduce the risks involved in international trading by providing a clear framework of rules within which both buyer and seller can operate
To support the philosophy of sanctity of contracts for all parties, on an international level
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Our Objectives
To provide Trading rules supported by a standard, simple proforma ICA contract
An Arbitration service producing Awards that can be enforced in the courts of most countries in the world
To provide Protection for all parties, by way of a clear, internationally recognised set of Trading Rules and Arbitration procedures.
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PROTECTION FOR INTERNATIONAL COTTON BUSINESS
INTERNATIONAL COTTON RULES
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The International Rules are intended to apply to all parties involved in the cotton chain:
GrowersGinnersShippersAgentsSpinners
Who benefits from using the International Rules?
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International Rules
ProtectionProtectionCotton Grower
Cotton Ginner
Cotton Shipper
Cotton Spinner
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THE INTERNATIONAL RULES AND BYLAWS OF THE ICA:
“THE INTERNATIONAL RULES”
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International Rules
You may not be able to see into the future…but you can prepare for it.
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The ICA Trading Rules anticipate what can go wrong with a contract- and provide Rules that let both Buyers and Sellers, to deal with it.
These Rules act as PROTECTION for your business, by setting out your RIGHTS
The Rules can supplement your contract, or form the basis of your contract. This is looked at later in more detail.
The International Rules
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By adopting and applying the ICA Rules to your contract, you will know what your rights are in the case of any:
•Late shipment •Late opening L/C’s •Sampling of cotton •Quality Problems•Underweight, or overweight shipments•Insurance for shipments •Closing out contracts
The International Rules
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The Bylaws and Rules book
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The Rules are a framework recommended for the purchase and sale of raw cotton.
International Football- both sides agree to play to the same rules.
International Trade - buyers and sellers can agree to trade on the same rules
The International RulesThe International Rules
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The Referee in a football match is there to ensure that both teams play by the rules- and if they do not, that the other team’s rights are to
be respected
The ICA offers this service - to referee the “game” of
cotton
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REMEMBER!!REMEMBER!!The Trading Rules provide the framework for a contract. But the parties must decide if they are acceptable in every detail. This means that they can, if they agree, exclude some of the Rules.
“ICA Rules and Arbitration” in your contract means both parties must apply and observe these Rules UNLESS both parties have also agreed that a RULE should not apply, or should be altered in some way.
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The International RulesThe International Rules
What happens if a contract breaks down?
Rules 225 provides for closure and invoicing back.
“If for any reason a contract has not been, or will not be, performed (whether due to a breach of the
contract by either party or due to any other reason whatsoever) then that contract must be closed by
being invoiced back to the seller in accordance with our rules in force at the date of the contract”
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Arbitration
Arbitration
The Role of the Association as an Arbitral Authority
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Arbitration is by definition: -
‘The voluntary submission of a dispute between two parties for a decision by a third party or two other parties of their choice’
ARBITRATION
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ICA cannot advise arbitrators what to decide, or even to assist them to decide.
The Association’s role is to facilitate, and manage the arbitration process
ARBITRATION
ICA procedures are based upon the Arbitration Act 1996, and incorporate the
mandatory provisions of this Act.
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Why choose Arbitration?
1) privacy
2) convenience
3) cost
4) speed
5) expertise
6) satisfaction
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By specifying “Arbitration” in your contracts- you are agreeing to chose Arbitration to resolve your disputes
There must first be an agreement between the parties that the dispute will be decided by Arbitration – The Arbitration Agreement
Where might you find an Arbitration Agreement?
Choosing Arbitration
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The Arbitration Agreement
It can be written in to the Contract
Or evidenced in writing, as agreed between the parties
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ARBITRATIONThere must be something in writing which evidences the fact that arbitration was agreed by the parties. This could be recorded by:
Fax Correspondence Email
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We recommend using the following wording from our ICA Contract, as your Arbitration Agreement:
“All disputes relating to this contract will be resolved through arbitration in accordance with
the bylaws of the International Cotton Association Limited.”
This wording incorporates the Bylaws whichset out the Association’s arbitration procedure.
ARBITRATION
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ARBITRATION
Your Contract (and Arbitration agreement) may be on one piece of paper, but they are considered to be separate agreements.
This means that Arbitration Agreement is not affected if the Contract is unenforceable for some reason
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ICA MEMBERS
No application fee/or
A reduced application fee
NON-MEMBERS
Application fee
This will be reduced if decide to also become a member when apply for Arbitration
ICA ARBITRATION
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ARBITRATION
Who CANNOT use ICA
Arbitration?
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ICA Members that have been expelled or suspended may be prevented from commencing arbitration under the Association’s Bylaws
ICA Members who have traded with a defaulter
If a non-registered firm has traded with firm listed on the ICA or CICCA default list then it too will be refused arbitration facilities.
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“Disputes will be resolved in a fair and impartial manner”
ARBITRATION
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The ICA List of Unfulfilled Awards
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The ICA can offer further protection to the International Trade
The ICA List of Unfulfilled Awards (or “Default List”)
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ICA list of “Unfulfilled Awards”
The ICA expects parties to honour Arbitration Awards
If an Award is not honoured, the ICA can take steps to publish the details of the other party or (“Defaulter”) on a List, which is sent to the Membership.
ICA Members may be subjected to disciplinary action if they trade with a Defaulter
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How does this work?
A Party must fail to honour an Award
If complaint is upheld: ICA Members and CICCA Member Associations may be informed.
The ICA must receive a request to list the defaulter
The ICA will check the facts
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The ICA Default List is NOT a substitute for formal enforcement of an Award
If you have not been paid, you will have to pursue the payment through the courts
Enforcement of Awards
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1958 New York Convention (The Convention on the Recognition and Enforcement of Foreign Arbitral Awards).
Under the Convention signatory will require that the country under which the arbitration
was conducted must also be a signatory.
Most of the countries in the world are signatories.
Enforcement of Awards
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International Rules
Cotton ShipperCotton Grower
Cotton Ginner Cotton Spinner
English Law &
Arbitra
tion Act 1996 1958 New York Convention
ProtectionProtection
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Our Membership is growing internationally
More countries are trading on ICA Rules
If you choose not to- you may be left behind
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Acceptance, Understanding, Application
of the International Rules, means we have a level playing field for International Trade
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Inte
rnat
iona
l Cot
ton
Rul
es
Always be prepared
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The International Cotton Association has
members all over the world…
…and more people are adopting the International Rules
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OUR OTHER SERVICES
Publications and circulars. Membership directory contact addresses members
Laboratory fitted with HVI Spectrum
Full range of standard boxes
Quality arbitration facilities
On-line Guidebook to Arbitration Procedures
Opportunity to Train as a Technical Arbitrator
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International Cotton Trade Seminar
• Educational two week conference on all aspects of the raw cotton trade
International Cotton Trade Conference and Dinner
•Keynote presentations from international speakers. • Dinner for 800 delegates and guests
OUR ANNUAL EVENTS
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Change is constant, we need to embrace the world.Communications are instantaneous, cost are rising,
and markets growing.
We welcome new members to join us and reinforce this vital ingredient of our business
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TheInternational Cotton Association
of the future
Let us get togethermake a strong Association for the long term protection
of our industry.
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WorldwideharmonyInternational Cotton
Trading Rules
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The International Cotton The International Cotton Association LtdAssociation Ltd
Your Partner in International
Cotton Business