The England-based International Cotton Association (ICA) used to expel members that deal with companies that are blacklisted for defaulting on contracts.But now mediation services will be introduced. This will help resolve disputes over reneged contracts. Mediation is seen as a speedier tool to resolve disputes in addition to the current methods of negotiation and arbitration.
Mills that agreed to buy raw cotton from trading houses when prices were high then refused to honor those deals when prices plunged. The problem has become common in the industry in periods of high price volatility.Some defaulting companies had approached ICA, requesting to be removed from the list and mediation was thought of as a suitable way to achieve that.
If both sides agree to mediation, ICA can provide a professional mediator to help resolve a dispute. The two parties share the costs.ICA is the first commodities association to offer mediation services.
The process is quicker than arbitration as most mediations usually take only one day. It provides a forum for the two parties to resolve their disputes. The beauty of mediation is that it is a win-win situation as both parties have to agree, and both parties want to find a solution that they are happy with. With arbitration, one party loses at the end.
www.ica-ltd.org/
