Printed 1st June 2014

Arbitration
Code of Practice

Printed in England and issued by

GAFTA
THE GRAIN AND FEED TRADE ASSOCIATION
9 LINCOLNS INN FIELDS, LONDON WC2A 3BP
post@gafta.com
www.gafta.com

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 APPEAL PROCEDURE

C H A P T E R 6
O R A L H E A R I N G S
FIRST TIER ARBITRATION AND APPEALS
REPRESENTATION AT HEARINGS
WITNESSES
EVIDENCE
TRIBUNAL DISCUSSION

Table of Contents CONFIDENTIALITY

CLOSING PROCEEDINGS

C H A P T E R 7
CHAPTER 1 O R D E R S A N D A W A R D S
ARBITRATION ORDERS FOR DISCOVERY
ARBITRATION AGREEMENT ORDERS FOR DIRECTIONS
ARBITRATION ACT PEREMPTORY ORDER
SEAT AWARD WRITING
LEGAL ASSISTANCE
CHAPTER 2 CONSOLIDATION
THE PARTIES
CONCURRENT HEARINGS
CLAIM
AWARDS ON DIFFERENT ASPECTS
TIME LIMITS & TIME BAR
INTEREST
QUALITY & CONDITION
FEES
LAPSE OF CLAIM
ARBITRATORS TIME SHEETS
CHAPTER 3 LEGAL COSTS
ARBITRATORS AWARD PUBLICATION
GAFTA QUALIFIED ARBITRATORS
C H A P T E R 8
APPOINTING AN ARBITRATOR
E N F O R C E M E N T

C H A P T E R 4
C H A P T E R 9
P R E P A R I N G A C A S E
S I M P L E D I S P U T E R E S O L U T I O N
NOTICES AND COMMUNICATIONS
SUBMISSIONS C H A P T E R 1 0
BASIC STRUCTURE OF SUBMISSIONS M E D I A T I O N

CLAIM SUBMISSIONS
C H A P T E R 1 1
DEFENCE SUBMISSIONS T H E C O U N C I L A N D S E C R E T A R I A T
REPLY SUBMISSIONS THE COUNCIL
FURTHER SUBMISSIONS SECRETARIAT
EVIDENCE RULES OF CONDUCT FOR ARBITRATORS
DISCLOSURE
C H A P T E R 1 2
DISCOVERY
A Z REFERENCES
LEGAL AUTHORITIES
WITHOUT PREJUDICE

C H A P T E R 5 5
A R B I T R A T I O N A N D A P P E A L S
ARBITRATION PROCEDURE

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 Chapter 1

ARBITRATION

The object of arbitration is to obtain the fair resolution of disputes by

an impartial tribunal, without unnecessary delay or expense.

This Code of Practice and Guidelines have been prepared for users of the
GAFTA Arbitration Service, parties and arbitrators. It does not pretend to
form a definitive handling of the subject. Further reference may be made to
GAFTA Contract Forms, and GAFTA Rules of Arbitration Form No. 125.

While every care has been taken in the preparation of these notes which
are believed to be accurate, neither GAFTA nor its Officers can accept any
liability whatsoever resulting from any error, mis-statement or omission
therein.

ARBITRATION AGREEMENT

The written agreement to submit present or future disputes to

arbitration

When parties enter into a contract incorporating a reference to the terms and
conditions of one of GAFTA's 80 standard contract forms they have agreed that
their disputes will be heard and determined by arbitrators in accordance with
the GAFTA Arbitration Rules Form No. 125. The Arbitration Clause in GAFTA
standard forms, is the parties' arbitration agreement, and is common to the
entire range of contracts.

Arbitration Rules Form No.125 applies to the range of GAFTA Contracts and is
re-printed from time to time. The applicable rules for the dispute are the
edition current at the date of the parties contract. See also Arbitration Rules
No.127, Maritime Rules for disputes arising out of GAFTA Charter Party No.1.

It is usual in the parties own house contract confirmations to make

reference to a GAFTA standard contract form and to the Arbitration Rules
that applies to the transaction. Some references are inadequate if for
example under the special conditions in the parties' own house forms of
contract they only state the appropriate GAFTA contract form or to the
applicable contact and arbitration rules. The Courts have upheld instances
where there are references only to the GAFTA form of contract number,
and to the Gafta Arbitration Rules No.125. However, each party should

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satisfy itself that references to the contract form and arbitration rules are
adequate in the circumstances and country where the award may have to
be enforced. (The Contracts Committee has provided a suitable form of
wording for house forms by a "Model Computer Contract No: 117").

On occasion the Association has dispute referred to arbitration arising out of

special contracts terms agreed between the parties that do not rely on a
GAFTA standard form of contract, but incorporate only the reference to the
Arbitration Rules Form No.125. These cases will be dealt with in the same way
as those arising out of the terms of the GAFTA standard forms of contract,
except parties have to be clear on the jurisdiction and law of their contract in
relation to the sale of the goods to avoid unnecessary argument and confusion.
Wherever possible it is advisable to incorporate the terms of a GAFTA
standard contract in a transaction and if none are entirely suitable, the most
general terms that can be adopted are found in GAFTA General CIF and FOB
Contracts Nos. 81 and 82.

ARBITRATION ACT 1996

The purpose of the Act is to provide users with access to a speedy, cost
effective and fair system of resolving disputes by an impartial tribunal.
The parties are free to agree how their disputes are resolved and the Act
allows the parties to agree to the application of institutional rules.
(AA1996/sec.4) Thus the Association has constructed its arbitration rules
and procedures to suit the requirements of the users, the parties to the
dispute.

SEAT (LAW)

The seat of arbitration, England, means the juridical seat of the arbitration
designated by GAFTA in the standard contract terms and Arbitration Rules.
(AA1996/sec.4.)

English Law applies to all Gafta Standard forms of contracts and to the
Arbitration Rules.

When entering into a contract it is up to each party to ensure it has in its

possession up-to-date copies of the applicable contract form and rules. The
latest publications can be accessed by Members on WWW.GAFTA.com.

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 Chapter 2

THE PARTIES

CLAIM

A claim for a breach of contract (not quality and condition) may for
example, consist of non-performance by one side or the other, usually
called a default, or it may be in respect of non-contractual performance,
e.g. a late delivery, delivery of non-conforming, non-contractual goods, a
failure to open a letter of credit in time, a failure to provide a vessel within
due time or a failure to give certain vital notices at the appropriate times.
Then the party who has suffered as a result of the breach may declare the
other party to be in breach of contract and in default of his obligations to
perform, with a requirement that the defaulting party should pay damages.
If settlement cannot be mutually agreed then notice is served on the
defaulting party of the claimants intention to refer the dispute to
arbitration.

Wherever possible it is desirable for contracting parties to arrive at a

mutual settlement of problems. However there should be no loss of
"goodwill" or "good customer relationship" if a party claims arbitration to
protect its interests since that is the mechanism the trade has adopted for
many years to solve its problems.

The notification of the arbitration claim can be a simple statement that the
claimant intends referring the dispute for settlement by arbitration. It
should be served on the other party in accordance with the Notices Clause
of the Arbitration Rules. It is helpful to give the relevant contract details
and any other relevant details in order to identify the dispute/contract.

In this notice the party making the claim may advise the other party of the
name of the arbitrator, or send a separate notice, and such notice has to be
within the time limit laid down in the Rules.

So far as a monetary payment can do this, damages are designed to put the
innocent party in the position that he would have been in had the breach
not occurred. There are certain rules guiding how such damages shall be
assessed, to be found in the Sale of Goods Act in case law and certain
parallel provisions in the GAFTA contracts providing for default.

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TIME LIMITS & TIME BAR

Time limits for claiming and proceeding with arbitrations and appointing
arbitrators apply under GAFTA Rules. (Rule 2:0/125). These time limits
have evolved over the years and it is GAFTA's understanding that this
reflects the trades requirements to ensure certainty and a final settlement.
In particular for quality and condition disputes there are strict time limits
to ensure the state of the samples is as near as possible to their condition
at the time of discharge of the vessel. Time limits do not cease during any
negotiations and it is often advisable for a party to claim arbitration to
safeguard their interests.

As a preliminary matter if it is raised as a defence in the arbitration, the

arbitrators have the duty to rule on whether the time limits laid down in the
Rules are observed. When there is a failure to comply with limits, then
claims are barred, subject only to the discretion of the arbitrators to waive
the need to comply with the time limit or to extend the time limit in certain
circumstances, as they think fit and in their absolute discretion. (Rule /125).
In considering whether they should do this, arbitrators should take into
account what the consequences would be for either party if discretion was
or was not given.

Under the Arbitration Act 1996, the Courts may upon application from
either party, provided the arbitral process has been exhausted, extend
time limits where a claim might otherwise be barred. (AA 1996/Sec.79 (3)
(a)).

It is understood that the Courts will do so however only if it is satisfied

that the circumstances were outside the reasonable contemplation of the
parties when they agreed to the time limit provision in the Rules or that
the conduct of one party would make it unjust to hold the other to the
strict terms of the time limits provisions.

QUALITY & CONDITION TIME LIMITS

Some contracts stipulate under the "quality" clauses, scales of fixed

allowances, for example in respect of oil and protein, or sand and/or silica.
Where such allowances are not fixed by the terms of contract, the
Arbitration Rules provide that claim must be made not later than 21
consecutive days from the date of receipt by the claimant of the final
certificate of analysis. (Rule 2:1/125). It is important to remember this
where certificates of analysis are to be passed on in a string.

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LAPSE OF CLAIM

If neither party has submitted any submissions and/or documentary evidence

to GAFTA, within the period of 1 year from the claim, then the claimant may
renew the claim annually, before the expiry of that year, but not for more than
5 successive years in total. Otherwise the claim is deemed to have been
withdrawn and abandoned. (Rule 4:10/125).

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 Chapter 3

ARBITRATORS
For the purposes of this Code of Practice, the word tribunal includes
reference to a sole arbitrator, three arbitrators or board of appeal as
appropriate.

For the purposes of the Arbitration Rules and this Code of Practice, the
term "Arbitrator" shall unless the contrary intention appears, include all
Qualified Arbitrators, whether acting as arbitrators, or appeal board
members.

GAFTA QUALIFIED ARBITRATORS

Any GAFTA Member wishing to qualify as an arbitrator must comply with

CPDP, (Continuing Professional Development Programme).

An arbitrator must:-

1. Be familiar with the mechanics of the commodity markets

2. Have knowledge of the basic principles of contracts and tort law

3. Understand the legal principles underlying commodity sale

contracts, carriage and insurance contracts, letters of credit and the
relationship between these arrangements

4. Understand the central responsibilities of arbitrators as set out in

the Arbitration Act and GAFTA Arbitration Rules

5. Efficiently unravel a bundle of documents documenting a dispute,

reason out a resolution sound in business and in law

6. Write a clear and enforceable award.

Arbitrators must always remember that they are acting in a judicial

capacity and that there are basic requirements of justice which they must
observe during the entire arbitration proceedings. These requirements
will usually be satisfied if the arbitrators have acted with fairness towards
both the parties. Arbitrators must always act with impartiality between
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the parties and avoid saying or doing anything which even gives the
impression that they are not or may not be impartial.

Before accepting appointment and during the entire arbitration, arbitrators

have the duty to satisfy themselves that they are eligible to act in the dispute
and that:-

1. They are eligible to act as required by the Arbitration Act 1996, the
Gafta Arbitration Rules and Gafta Code of Practice for Arbitrators.

2. They are a GAFTA Qualified Arbitrator and have not been suspended
or removed by the Association.

3. They, their company or firm, have no direct or indirect interest in the

transaction in dispute, including an interest as a party, a broker,
agent, consultant, analysts or superintendent. Nor where another
employee of the same organisation or associated organisation or
firm, is appointed to act as arbitrator or appeal board member in
the same case.

4. They have not already advised, given an opinion on the case, or been
consulted by one of the parties to the dispute in respect of the specific
dispute.

5. They are not so closely associated with a party or with an issue

arising in the case in which they have been appointed as to create a
reasonable impression of a conflict of interest prejudicing their
ability to conduct the reference impartially.

Conflicts of interest

Whether accepting an appointment made by a party or by the Association

or acting during the course of the arbitration, the following criteria apply
in avoiding any conflict of interest or the reasonable perception of the risk
of it.

A Arbitrators should not act in cases involving former employers for a

period of 5 years from leaving their employment. Retired employees shall
always be ineligible to serve on any case involving their last employer.

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B Doubts on the impartiality of an arbitrator are justifiable if a reasonable
and informed third party would reach the conclusion that the arbitrator
may be influenced by factors other than the merits of the case.

C If a party, co-arbitrator or Secretariat of the Association has concerns

about an arbitrators impartiality notifies the Association of its concerns
and of its reasons for such concerns, then, within seven days of notification
by the Association to the arbitrator, the arbitrator should disclose any facts
or circumstances related to such concerns to the Association.

D An arbitrator has a continuing duty to disclose to the parties, co-

arbitrators and the Association facts or circumstances which may give rise
to a reasonable doubt relating to the arbitrators impartiality (either priot
to the appointment or as soon as he is aware of the facts or circumstances)

E The purpose of such disclosure (C and D above) is to allow the parties to

eliminate concerns about the impartiality of an arbitrator or to challenge
the arbitrator under Chapter 11 and under the Rules and Regulations.
Parties are deemed to have irrevocably waived any potential conflict of
interest if no challenge to the arbitrator has been received by the
Association within 15 days of such disclosure.

F At appeal hearings individuals may not be appointed as either partys

representative or as a board member where they participated as an
arbitrator in the arbitration against which the appeal has been lodged.

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 Chapter 4

PREPARING A CASE

NOTICESANDCOMMUNICATIONS

When serving notices that are required by the Arbitration Rules on the
Association or to the other party, they should be sent either by letter, telex,
or electronic means method of rapid written communication.

All submissions and documents must be exchanged between the parties and
sent to the Associations Secretary with sufficient copies for the Secretariat to
forward to the tribunal. The tribunal will be deemed to have received them on
the day they are received at Gaftas offices.

All communications to the parties from the tribunal will be sent via offices of
Gafta and vice versa.

SUBMISSIONS

The purpose of the submissions (statement of case) presented by each

party is to explain its case concerning the dispute which has been referred
to arbitration. Submissions should be written in plain, clear language. It is
neither necessary nor helpful to use Latin or quasi-legal language in the
submissions.

Lawyers should particularly note that submissions are not pleadings.

Therefore the formal rules of pleadings do not apply and, unlike pleadings,
submissions should refer not only to matters of fact but also to matters of
evidence and to matters of law.

Parties should avoid using personal or emotional language in submissions

and in presenting a case. The purpose of arbitration is to resolve a
commercial dispute in a fair and rational way

Any submissions should contain a full statement of the party's case. The
tribunal can only decide upon the case as presented in the submissions.
The tribunal cannot make a case for a party when a party is not presented
fully or at all. While the tribunal will intervene and may invite the parties
to deal with relevant matters, which they have failed to deal with in their
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submissions, the tribunal cannot and will not make the submissions on a
party's behalf.

BASIC STRUCTURE OF SUBMISSIONS

Arbitration Rules Form No.125 sets out the procedures for providing
submissions and supporting documents (evidence) to be delivered by each
party.(First tier 4:0/125 and appeal 12:0:)/125)

A case file will be opened by the Secretariat, when they will call on the
claimants for a deposit on account of the costs, fees and expenses of the
Association and arbitrator(s). Upon receipt of the deposit a timetable will
be provided for the production of submissions.

Documents only cases are more usual at first tier arbitrations although
there is nothing to stop the parties agreeing to an oral hearing. If there is
no hearing full written submission should be provided, but if a hearing is
to take place skeleton arguments (concise statements) plus all
documentary evidence should be exchanged between the parties and sent
to the Association.

When there is no oral hearing full submissions and documentary evidence

are required to be exchanged between the parties and sent to the
Association. (4:4, 12:2, 12:3 /125).

The basic structure of any set of submissions or statement of case should

usually be as follows:

1. A statement of the relevant contract terms

2. A statement of the relevant facts

3. A summary of the case and a statement of the award which the

party is seeking from the tribunal

The arbitrator(s) have the duty to examine all the documentary evidence
supplied by both parties to the dispute and to ensure that both parties have
had sight of each others evidence and submissions prior to the hearing. If
one party puts in any additional evidence that has not been supplied to the
other, then copies of this must be sent to the other party in good time (48
hours) before the hearing. In the event that a party fails to give adequate
time, the arbitrators will decide whether or not to admit the additional
evidence. Arbitrator(s) may request additional documents from either party
and should advise both parties of such a request.

The arbitrators may, at their discretion, seek legal advice and any expenses
incurred will be a charge in the arbitration and/or appeal. Arbitrators have
an obligation to ensure these costs are proportionate to the case.
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CLAIM SUBMISSIONS

Usually the claimant/appellant will serve the first set of submissions. The
submissions should begin with a statement of the contract terms. The
statement should cover the terms of the contract and emphasise any other
terms relevant to the particular dispute. The contract itself should always
be included in the documents, which are served with the claim
submissions. It is not usually necessary to include a further copy with the
defence submissions unless there is some dispute about the contract terms
and the respondent is relying upon a different document as containing the
terms of the contract.

This should be followed by a statement of the facts giving rise to the

dispute. The statement should set out the basic facts and then only such
other facts as are relevant to the dispute. It is not necessary to recite all
communications between the parties. It is only necessary to refer to
communications relevant to the dispute. Where there is a dispute about
the facts; it is in this part of the submissions that a party should refer to the
evidence that supports its case as to the facts. This evidence may be in the
form of copies of documents, such as e-mails or faxes, or other
communications between the parties, shipping documents, analysis or
survey reports or statements of witnesses.

This should be followed by submissions stating the basis for the

claim/appeal and a calculation of the claim. The submissions should
conclude with a summary of the case and statement of the award, which
the claimant/appellant is seeking. If necessary ask that the tribunal find
"as a question of fact" that certain things happened. Establishing the facts
will allow the arbitrators to analyse the problem. (4:1, 12:2(a), 12:3(a),
/125).

In their submissions the claimant will lay down the reasons why he
believes that the respondent owes a liability under the contract to the
claimant. The claimant will usually submit that the respondent is in breach
of a particular term of the contract. It is the breach of the contractual
obligations under the contract that gives rise to claim and puts the
respondent under a liability to the claimant. The submissions will also set
out the claimant's calculation of the value of that breach. This is known as
the quantum of damages and will be the amount for which, if it is claimed,
the respondent will be liable to the claimant.

A party should identify the relevant contract provisions and evidence upon
which it relies in support of its case. The relevant contract provisions can
be proved by reference to the contract. The parties are free to support
their interpretation by reference to legal textbooks or reports of previous
decided cases (case law) if they so decide.
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The party should then explain why the contract provisions and evidence
supports its case. A party should always remember that it is the purpose of
the submissions not only to state its case but also to explain it fully to the
tribunal.

The summary of the case and statement of the award that the party is
seeking from the tribunal should be as brief and clear as possible for
example: "We submit that the goods were not shipped within the contract
shipment period. Therefore we ask the tribunal to find that Sellers were in
default and to award us damages of ."

DEFENCE SUBMISSIONS

The respondent in the arbitration/appeal will serve the second set of

submissions. It is unnecessary to restate the contract terms and the facts if
agreed. In the defence submissions the respondent should only identify where
it disagrees with the claimant's/appellants statement of the facts or where it is
relying on additional facts. Where the respondent wishes to rely on a different
document or contract than that submitted by the claimant then that document
or contract should be submitted with a statement clearly identifying the
differences. (4:2, 12:2(b), 12:3(b) 125)).

If the respondent has a counter-claim the respondent should, following its

submissions in defence, state the additional facts giving rise to the
counter-claim, the counter-claim submissions and the calculation of the
counter-claim.

The defence submissions should conclude with a summary of the case and
a statement of the award which the respondent is seeking, if necessary,
setting out the findings of fact and law which the respondent is asking the
tribunal to make. Where the respondent has a counter-claim the defence
and counter-claim submissions should conclude with, first, a summary of
case and statement of award sought for the defence and, second, a separate
summary and statement of award sought for the counter-claim.

REPLY SUBMISSIONS

The claimants/appellants should only serve detailed reply submissions to

the defence submissions if: -
1. The defence submissions raise new matters not dealt with in the
claim/appeal submissions, or

2. The defence submissions include a counter-claim in which case the

reply submissions should include defence to counter-claim
submissions. Defence to counter-claim submissions should be

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 similar to the defence submissions described in the previous
section. If the defence submissions do not raise new matters and do
not include a counter-claim, the claimant/appellant should simply
state in its reply submissions that it disputes the defence
submissions and asks the tribunal to proceed to make an award.
The claimant should not simply repeat its claim submissions in the
reply. (4:3, 12:2(c), 12:3(c)125).

FURTHER SUBMISSIONS

After the service of reply submissions, the process envisaged under the
Arbitration Rules has been completed, except that further submissions
may be necessary where new matters were raised in reply submissions
and/or defence to counter-claim submissions. If either party considers
that a point(s) raised has/have not been adequately covered in the other
party's submissions, a request may be made for further details. In which
event the arbitrators should be advised without delay, with a view to
making an appropriate order.

The tribunal must ensure that each party is aware of the claims made against
him and is given the opportunity to reply to them. Furthermore arbitrators
may not decide issues in dispute on a basis not argued or relied on by the
parties without first giving the parties an opportunity to make submissions
thereon.

Whilst arbitrators are expected to use their general trade knowledge and
skill, they may not use any particular knowledge relating to the case in
dispute, unless it is first raised with both parties and each is given the
opportunity to comment or make submissions on it. (17:0/125).

EVIDENCE

A party must remember that the tribunal can only decide upon the case as
presented in the submissions which must include a party's evidence.
Where there is a dispute about facts it is not enough for a party simply to
state what it believes are the facts. Otherwise that party has not given the
tribunal a basis for finding in its favour and where one party puts forward
evidence while the other party does not the tribunal will usually accept the
only evidence which is put forward.

Documents are the most common form of evidence. It is usual for a file or a
bundle containing copies of documents referred to in the submissions to
be served with the submissions. Typically the bundle will contain a copy of
the contract, copies of the communications between the parties, shipping
documents if relevant, analysis or survey reports if relevant and written
statements of witnesses. If the submissions contain reference to legal
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textbooks or reports of previously decided cases these should also be
included in the bundle. The bundle should be numbered and it is
preferable to number each page rather than each document.

The respondent should not include in its bundle; copies of documents

already included in the claimant's bundle. Where it also relies on the same
documents it should simply refer to the documents in the claimant's
bundle.

Where possible to save time, costs and for ease of reference the parties
should agree on the bundle of documents to be submitted to the
arbitrators.

DISCLOSURE

Parties are required in every case to disclose all documents to the

arbitrators and to the other party which are material to the matters in
dispute.

LEGAL AUTHORITIES

A party may wish to support submissions by reference to either legal

textbooks or reports of previous decided cases. Where this is the case, the
party should include a copy of the section of the textbook or of the case
report in the documents' bundle, drawing attention to the relevant part.

WITHOUT PREJUDICE

Correspondence between the parties which attempts to settle a dispute,

whether before or after arbitration has started are often exchanged
without prejudice. Such documents must generally contain the words
without prejudice, usually at the top. This correspondence is privileged,
i.e. not to be disclosed to the Association or to the tribunal. This is
important since a party might have made a concession in his attempt to
settle which if disclosed in the arbitration might influence the tribunal. It
follows that if the other party wrongly discloses a without prejudice
document it has received, the tribunal must ignore it.

It should be noted by arbitrators that simply putting the words without

prejudice on any document is not good enough to prevent disclosure. To
qualify for privilege, correspondence must contain genuine attempts to
settle the dispute.

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 Chapter 5

ARBITRATION AND APPEAL

ARBITRATION PROCEDURE

All documentary evidence submitted by the parties to the dispute should

have been exchanged between the parties and sent to Gafta prior to any
meeting or oral hearing. (4:4, 12:2, 12:3/125).

If parties and/or their representatives attend an oral hearing they may not
necessarily be entitled to present further documentary evidence in addition
to the evidence provided prior to the hearing. If there is not oral hearing then
full submissions and documentary evidence is exchanged between the
parties and sent to Gafta.

Arbitrators must decide the case on the arguments and evidence put before
them by the parties or their representatives, but they are entitled to use their
own knowledge of the trade (including knowledge of trade customs) in
deciding on their award. However, if arbitrators have knowledge of facts
relating to the dispute before them which have not been submitted by the
parties, they should reveal these facts and invite the parties to comment on
them. Likewise they should not decide any issue on a basis not argued or
relied upon by the parties without first inviting the parties to make
submissions thereon.

For arbitration on quality and/or condition where samples are to be

examined, arbitrators must give the Association adequate prior notice for
samples to be made available. The Association may dispose of samples 6
months after they are received unless a specific request has been made to
and acknowledged by the Association or an appeal against the award has
been lodged.

APPEAL PROCEDURE

Each party to an award of arbitration has the right to appeal, with some
exceptions. There is no right of appeal if the arbitration arose out of the rye
terms clause (See Rule 6/125), or where the arbitrators decided they had no
jurisdiction (See Rule 8:1(b)/125) or under a provisional order (See Rule
8:2/125).
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The Arbitration Rules set down a time limit within which to lodge an appeal.
In order to lodge an appeal with the Association no later than 12noon on the
30th consecutive day from the date of the award, the appellant gives a notice
of appeal to the Association, and notifies the other principal to the contract
that he has done so and arranging to pay to the Association the appropriate
deposit as prescribed by the Council. The amount of this deposit will be
shown, usually on the last page, of the first tier award of arbitration.

The Association must receive the above two notices and deposit not later
than 12.00 hours by the 30th consecutive day after the date of the Award. If
they fail to comply then their appeal is deemed to be waived and barred. (See
Rule 10:1, (i) (ii) (iii).

If the appeal notices and fee are received after the 30 consecutive days the
other party will be notified by the Association. If the respondent raises this
as a defence then the arbitrators decide whether or not to grant their
discretion to admit the appeal. (See rule 21/125)

An appeal is a complete new hearing of a dispute. Neither the parties, nor the
representatives nor the board can assume that evidence or information
produced at the arbitration is available to the board of appeal. The
Secretariat will provide the board of appeal with a copy of the first tier award
only but will not pass to the board of appeal any documents it may hold on
its files from the first tier arbitration.

Either party may state his case orally or submit his case in writing. In the
case of an appeal, after it is lodged the Secretariat will ask the parties if they
require an oral hearing. In that case the parties will be asked to name their
authorised representatives who will attend the hearing on their behalf.

The parties or their representatives must provide the Secretariat with five
copies of any written statements and documentary evidence for forwarding
to the board of appeal. Any documents, other than in English, must be
provided with a parallel translation attached.

If there is an oral hearing skeleton arguments (a concise statement of case)

only need to be prepared by the parties to send to each other and to the
Association for circulation to a board of appeal. (12:/125).

In the absence of an oral hearing the board of appeal will decide their
award on the basis of the documents and full written submissions
provided by the parties.

If a party withdraws his appeal against an award of arbitration, the other

party has the right to appeal against that award and the notice of appeal
must be received by the Association no later than 12.00 hours on the 30th
consecutive day after the date of the Association's notice to that party of the
withdrawal.(13:2/125).
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 Chapter 6

ORAL HEARINGS

FIRST TIER ARBITRATION AND APPEALS

The date for an oral hearing will be set down by the Secretariat and
notified to the arbitrators/board of appeal, the parties, their
representatives and solicitors. This will be held at the registered offices of
GAFTA in London, unless otherwise agreed by both parties. In which case
the Secretariat will arrange for the hearing to take place in the parties
chosen venue/town/country, and the costs will be a charge in the
arbitration.

At the first tier arbitration the tribunal will grant an oral hearing if requested
by a party to do so, or the tribunal may decide an oral hearing is necessary
and will notify the parties accordingly. (Rule 4:8/125). An appeal hearing will
be set down by the Secretariat if requested by either party. (Rule 12: l/125).

At the appointed time for the oral hearing the arbitrators/board of appeal
(the tribunal), the parties and/or their representatives meet.

The tribunal should have received beforehand all the documents submitted
to the Association by the parties. Any documents submitted after the time set
down for the receipt of submissions, or less than 2 business days before the
day of the hearing, will be retained by the Association for the tribunal to
decide whether or not they will admit them at the hearing.

Each party has the right to attend a hearing and to present his own case or to
appoint a representative. However, parties may not be represented by or
have present at the hearing, counsel or solicitor or any member of the legal
profession wholly or principally engaged in legal practice unless agreed by
both parties.

After being given reasonable notice of the time and place fixed for the
hearing, if either party fails to appear or present a case, the hearing may
proceed without them if the tribunal is satisfied that they have sufficient
evidence and submissions to proceed to make an award. If one of the
parties is not represented at the hearing and any new points are raised in
their absence, the tribunal must draw these points to the attention of that
party for their comments.

19
Hearings are based on an adversarial system and each party will hear the
other's case and have an opportunity to answer it.

1. Both representatives shall be admitted together and no part of the

hearing shall be conducted in the presence of only one of the
representatives, unless the other party is not represented, and has
made known his intention neither to appear nor to be represented.
The tribunal shall not proceed with the hearing unless they are
satisfied that the absent party was duly notified of the date, time
and place of the arbitration hearing.

2. The purpose of an oral hearing is to allow oral representations and

submissions but not to allow the parties to adduce fresh
documentary evidence not already exchanged prior to the hearing.
Any such evidence may, however, be admitted by the tribunal
provided they are satisfied that the other party has or has had
sufficient opportunity to produce evidence in reply and to this end,
if they think fit, (whether on application by the parties or not) the
tribunal should adjourn the hearing for this purpose.

3. At the hearing the chairman will invite the claimant/appellant to

present his evidence and to state his case first. The tribunal should
ask for clarification of any point as the submissions are made, but
should reserve questions of substance relating to the case as a
whole until the claimant has completed his submissions.

4. The chairman will invite the respondent to present his evidence and
to state his case. Again the tribunal may then ask questions to clarify
any points. If the respondent has a counterclaim this can be
presented to the tribunal in the like manner as the
claimant/appellant, and the procedure as above is to be followed

5. The chairman will invite the claimant/appellant to reply to the

respondent's case, but he may not introduce new evidence. The
claimant/appellant should reply only to any new points made by
the respondent which were not already covered in his first
submissions, but he should not be permitted to take the
opportunity of merely repeating his case. However, where a
counter-claim has been made, the claimant/appellant may respond
to that claim as though he were respondent in the proceedings. In
which case, the respondent has a final right of reply to any points
made in such response which were not covered by the respondent
in his counter-claim.

6. The parties should not be allowed any further replies.

Before closing the proceedings, the tribunal should raise with the parties
any points which seem unclear or which have not been sufficiently
covered, or even omitted altogether which seemed relevant to the tribunal.
20
In particular, arbitrators should remember that while they are able to use
their trade knowledge and skills in general, any particular knowledge
relating to the case which is in the possession of any member of the
tribunal may not be used unless such is first raised with both parties, and
each given an opportunity to comment or make submissions thereon.

Parties, their representatives and witnesses, shall withdraw after the

hearing.

REPRESENTATION AT HEARINGS

Parties are entitled to attend a hearing personally. If they are unable or do

not wish to make their statement of case personally at the oral hearing
they may nominate a representative (not an arbitrator involved in the
case) to speak for them and present their case to the tribunal. Although
parties are free to seek legal advice, they may not be represented at the
hearing by lawyers or solicitors unless both parties expressly agree.

(If there is not oral hearing, then the arbitration is judged on the
documentation submitted to the tribunal).

WITNESSES

If a party intends to call a witness then adequate time (not less than 14
days prior to the hearing) should be given to the other party, failing which
the tribunal will decide whether or not to admit the witness at that
hearing. It is preferable to receive witness statements in advance of the
oral hearing, in which case it is appropriate to go direct to the cross-
examination.

At the discretion of the tribunal witnesses may be allowed into a hearing

from the beginning until the end, or excluded and only called in to give
their evidence. If a party intends to call witnesses, they should advise the
arbitrators, and the other party, of the number of witnesses and the
probable time to be taken. Witness statements ideally ought to be
delivered in advance of the hearing to the tribunal and other party.

The parties and the tribunal are not bound by the strict rules of court and
generally a witness is sworn in only if either party requires it or if the
tribunal in its discretion so decides. The party calling a witness shall
examine-in-chief and may not ask leading questions; i.e. not questions
which prompt a particular answer. A party calling a witness will usually
have gone through the evidence beforehand with the witness, and it is a
skill of the party's representative calling witnesses to elucidate the
evidence required.
21
The opposing party may cross-examine any witness and may put forward
leading questions if he pleases. It is the duty of chairman of the tribunal to
ensure that this is done in a reasonable and civilized fashion, taking into
account any language difficulties if the witnesss first language is not
English.

When the cross-examination is over, the party calling the witness may
re-examine the witness, if he wishes, but only on new matters which arose
out of the cross-examination and not a repetition of matters dealt with in
examination-in-chief.

It is advisable for tribunals to reserve questions of witnesses until the

above three stages have been completed, although sometimes it may be
necessary to check a witness's answers when they are indistinct, as he
goes along.

If an adjournment is necessary (e.g. lunch-break) during a witness's

evidence, the witness should be cautioned not to discuss the case or his
evidence with anybody whatsoever.

An expert witness is not a witness to elucidate the case of either party but
is called to give his expert opinion, not least for the benefit of the tribunal,
and such evidence should be in written form available to both parties
beforehand as well as to the arbitrators. However such evidence may be
tested by cross-examination.

EVIDENCE

An arbitrator's prime duty is to ascertain facts from the evidence

presented and in any subsequent appeal to the High Court, a tribunals
finding of facts will rarely be challenged, on the basis that such findings are
final. Facts are elucidated by evidence, either from documents or from
witnesses so that an arbitrator needs to ascertain all the facts first before
he can begin to make a decision on them.

An arbitrator is to a large extent master of his own procedures and is

allowed a good deal of flexibility as to what he should admit as evidence,
compared to strict rules of evidence in Court designed to avoid a jury being
unfairly influenced by evidence which turned out to be inadmissible. Thus,
if there is doubt, it is usual for an arbitrator to admit evidence on the basis
that an arbitrator's function is to weigh and accept or reject the evidence
according to his reading of it.

The best evidence is always original documents and original evidence from
the person who was involved in what was happening. Copies of originals
may be admitted and also unofficial translations (provided both parties
accept the versions proffered). In cases where an original witness is not
22
available, "hearsay" evidence as to what a person said may be admitted
and may or may not be accepted by the tribunal.

The important principle to remember is that it is the arbitrator's duty to

weigh all the evidence proffered and to derive from that evidence findings
of fact. This usually involves rejecting evidence to the contrary.

There are certain things which in principle are not admissible, such as
privileged documents, or "without prejudice" communications between
parties.

TRIBUNAL MEETINGS DISCUSSION

In the event that an oral hearing is not required the tribunal may decide
the award on the basis of the documents presented to them by the parties.

The arbitrators need not meet in person. They may communicate with
each other by telephone, post, fax and e-mail, to consider the submissions,
the documents and to decide on the award. (4:9, 12:3/125).

The chairman of a tribunal is responsible for the conduct of all meetings,

hearings as well as the discussions by e-mail and telephone and the co-
ordination of those discussions. Wherever possible the chairman should
instigate the discussion and record when they have started and ended.

The chairman should advise the Secretariat to notify the parties, their
representatives and solicitors when the arbitral proceedings are at an end
and no further documents, submissions or representation will be admitted.

The chairman is responsible for the timely production of the award.

CONFIDENTIALITY

Arbitrators must not disclose details of awards nor of any documents

submitted to them in the arbitration at any time prior to, or after the
publication and issuance of their awards by GAFTA. Arbitrators must
not disclose or discuss, either with the disputing parties or with third
parties, details of their arbitration awards, nor any documents or
submissions put in by the parties, prior to and after the publication and
issue of, such awards by the Association.

Arbitration awards are private and confidential to the parties. Every

agreement to arbitrate (including all GAFTA contract forms) is deemed to
include a term imposing a duty on both parties to keep the arbitration
award confidential from third parties. The scope of the duty extends not
only to the award itself, but also to the reasons and all other documentary
23
materials relating to the arbitration. This principle was confirmed by Mr.
Justice Colman in Insurance Company -V- Lloyds Syndicate.

It is open to the parties to consent to the award being made public and in
which case it may then be reported by GAFTA. In that case the parties need
not be named and the awards published anonymously. However, in the
absence of any such agreement, then neither party can disclose the award
to a third party unless disclosure was necessary to enable that party to
defend a claim against him or to bring a claim against another. As was
made clear in the case before the Court, the duty of confidentiality was
quite capable of being enforced by way of an injunction preventing
disclosure of the award to a third party.

CLOSING PROCEEDINGS

The tribunal should always make it clear to the parties when the arbitral
process and any hearing is at an end, to be conveyed to the parties in
writing by the Secretariat.

24
 Chapter 7

ORDERS AND AWARDS

Order for Discovery, Order for Directions, Peremptory Order
To ensure the progress of the arbitration, the tribunal may make a number
of orders to the parties during the course of the reference.

ORDERS FOR DISCOVERY

When the parties are preparing a bundle of documents to be submitted to

the arbitrators they have to work out what documents they have in their
possession that are material to the arbitration. If one of the parties
considers that the other has not disclosed all material documents they may
apply to the arbitrators for a general order for discovery. Or call for a
particular order for discovery, listing the document(s) required to be
disclosed which they consider the other party has in their possession.

The tribunal will usually find it easier if an order is necessary to call for
specified documents. They should in any event call on the party to
comment and should satisfy themselves that the request for disclosure is
genuine and fair. The arbitrators should check that each document being
called for is material to the dispute before them. If they are satisfied that
the request is correct the arbitrators should make an Orders for
Discovery of the identified documents, otherwise they should declare that
they will not make such an order.

When requested to do so by one of the parties the tribunal may, at its

discretion, decide to call on a party to produce information or documents
which may be material to the arbitration. For example, but not limited to,
the vessel's log book, bills of lading, insurance certificates etc.

ORDERS FOR DIRECTIONS

Where a tribunal is of the opinion that the case is not progressing at a

satisfactory rate, they may call on a party, in a simple order form to
present its case by a stated date.

25
PEREMPTORY ORDER

Where a tribunal finds that a party has failed to proceed with the case and
has not complied with previous orders, they will give a final notice to the
parties, which may be a notice of their intention to proceed on a given date
with the arbitration, on the basis of the documentation before them.

AWARD WRITING

At the conclusion of the case the tribunal will prepare a draft award and send it
to GAFTA for printing. The completed award will be signed by all arbitrators
(or chairman of the board of appeal) and returned to the Association for
publication to the parties.

An award should be written in plain English, (or another language if

agreed) and must be self-explanatory and clear as to its meaning. All
awards should be fully reasoned. The Association will monitor and assess
the skills of award writing and follow an assessment programme in quality
of award writing

If it is impractical to recite relevant parts of a document in an award, a

copy of the document may be annexed to the award. An award should not
refer to contract prices or delivered weights etc., without stating what
these are. Wherever possible damages and/or monies awarded should be
expressed in the currency of the contract with the calculation clearly
shown.

The tribunal, and in particular the chairman, is responsible for the

progress of the arbitration and ensuring that an award is available to the
parties within six weeks from the close of the proceedings.

Arbitrators should set out sufficient facts and reasons for their award to
enable a party to understand fully what were the points in dispute and
how they have been dealt with. It is desirable to set out the background
and basis of facts, the contract and the particular contract term which is in
dispute or under construction, and enough of the history of events to show
how the problem arose and to state as clearly as possible what precisely
was the dispute put before the tribunal.

Both sides will have made submissions, and setting out in the award a brief
prcis of each side's submissions on the point in dispute will be helpful,
leading, by elimination, to the reasoning of the award. It is unnecessary to
recite in full the written submissions put in by the parties.

It is advisable as far as is possible for arbitrators to avoid difficult

Latin/legal terms or quasi legal jargon. The tribunal will not be expected to
analyse the law and the authorities and it will be quite sufficient that it
26
should explain how they reached the conclusion. Clarity, simplicity and
comprehensive understanding of the case are required.

The award must give all the necessary information. In particular, the full
company names of the parties to the arbitration must be clearly shown
together with the contract details. The award should state in full any sums
awarded as damages or allowances, and by whom and to whom they are to
be paid. These are normally in the currency of the contract. More important,
the award should state the figures for delivered weights, contract and
settlement prices etc., sufficient to enable the total amount of damages to be
calculated. The award should normally provide for the payment of interest
up to the date of the award, or to the date of payment as the arbitrators
decide. It should also state the arbitrators' fees, by which they are to be paid
and, if by both parties, in what proportions.

LEGAL ASSISTANCE expert, legal adviser, assessor

Unless agreed otherwise, the arbitrators are entitled to appoint an expert, a

legal advisor or assessor to report to them to assist them on legal and/or
technical matters. In all such cases the parties should be given a reasonable
opportunity by the arbitrators to comment on any advice or opinion they are
provided.

CONSOLIDATION OF QUALITY AND/OR CONDITION

DISPUTES.

The Arbitration Rules provide for the issue of one award of arbitration to
all parties in a string of contracts, but only for quality and/or condition
disputes. (7:1/125). Quality arbitrations will be heard by a sole arbitrator
or three arbitrators. The award will name the first seller and the last buyer
with other buyers and sellers shown as intervening principals. The
contracts in the string have to be identical in all material terms, with the
possible exception of the contract price. Following the examination of the
samples by the arbitrators, if they decide an award should be given for any
inferiority of, or damage to, the goods, the damages will often be awarded
in the form of an allowance as a percentage of each respective contract
price per tonne, and each buyer and seller in the string will settle the
differences between them. The fees for the arbitration will be paid by the
unsuccessful principal, either the first seller or the last buyer as the case
may be.

27
CONSOLIDATION OF OTHER DISPUTES.

The Arbitration Act 1996 provides the possibility to consolidate, with the
agreement of the parties, any type of dispute as well as quality or condition
arbitrations. (7:2/125). In many cases this would create more problems
than it solves, particularly where not all parties take the same action if
there is a breach of contract and where their responsibilities possibly
differ. Therefore an award will be issued to each buyer and seller as
principals to a contract, and the fees follow the event.

However, to cut down on time and expense, arrangements can be made by

the parties with the Secretariat for the arbitrations to be heard by the
same tribunal at the same hearing. This procedure can apply at both
arbitration and appeal, except that not all of the parties in the string may
elect to go to appeal.

CONCURRENT HEARINGS

With the exception of quality and condition disputes, unless the parties
agree that concurrent hearings are to be held, the tribunal has no powers
to order concurrent hearings.

If there is agreement, the Association should be advised for administration

purposes and in order to set down hearing dates in the correct sequence.

AWARDS ON DIFFERENT ASPECTS

The tribunal may decide to issue an award during the course of the
arbitration on a certain aspect, leaving other aspects of the dispute to be
decided at a future time. For example, such an award may be given in
answer to the parties' submissions on a time limit issue if a claim is late. If
the tribunal admits the claim and awards on that basis, this will mean that
the same arbitrators will issue a further award at a later time on the
substantive issue(s) in dispute. In such cases the tribunal should clearly
state that it has not dealt with all the aspects of the case and that a further
award is envisaged on any outstanding issues.

Since each award issued is final as to the matters with which it deals, if a
party is dissatisfied, then they may, when entitled to do so under the Rules,
lodge an appeal against the tribunal's award. In such event the first tier
arbitrators do not proceed until the board of appeal has published its
award. Depending on the outcome of the appeal, the tribunal will then
proceed with a new timetable for the production of submissions.

28
INTEREST

All sums awarded shall carry interest, at simple or compound rates in the
arbitrators' discretion. If the arbitrators determine not to award interest
their reasons for this decision must be stated in the award.

FEES

Each party, by engaging in arbitration, accepts a duty to be liable to the

Association for payment of all fees and expenses of the arbitration.
(18:0/125).

Fees and expenses incurred by arbitrators or GAFTA in relation to a

dispute should be shown on the award of arbitration. In cases where the
arbitration has been withdrawn settlement of any fees and expenses
should be made to the Association.

At first tier arbitrators will decide the fees to be included in the award, and at
an appeal the rates are laid down by the Council from time to time. Fees are
usually calculated at an hourly rate by the time taken and should normally be
based on the magnitude and the complexity of the case, in order to be
proportionate to the merits of the case.

GAFTA will call for a deposit on account of the Association and arbitrators
fees and expenses at the outset of the arbitration or for any other sums
required pending the publication of the award. No fees should be paid
direct to an arbitrator or appeal board member other than through GAFTA.

In the event of non-payment of any costs, fees and expenses of the

Association and tribunal, the Council may notify GAFTA Members of that
fact. (Rule 22:2/125).

ARBITRATORS TIME SHEETS

Arbitrators should during the course of the case, from the time of the claim to
the completion of the award writing process, a record of the time they have
spent hearing or working on a case, both at arbitration and appeal tier.
Arbitrators should provide the Secretariat with copies of their time sheets to
be maintained on file for information only. At the conclusion of the case the
chairman is responsible for notifying the Association what hours shall be
charged for the arbitration or appeal.

The fees charged may be based on less but not more than the time spent. Any
fee charged should be proportionate to the matter in dispute.

29
LEGAL COSTS

Where both parties have expressly agreed to legal representation then

they may claim their legal costs at the arbitration. The parties are free to
agree what costs are recoverable and in the normal event the unsuccessful
party pays the costs, in whole or in part, to the successful party, but the
arbitrators must consider awarding legal costs based on the merits of the
case.(16:1/125).

Under the Arbitration Rules however if both parties have not expressly agreed
to legal representation then their legal costs are not recoverable and each
party are responsible for the costs of the solicitors/lawyers they engage.
(16:2/125).

AWARD PUBLICATION

When the arbitrators have signed the completed award, GAFTA will, upon
receipt of the fees, date and send it to the parties. (9:3, 15:0/125).

30
 Chapter 8

ENFORCEMENT
If a party to an award notifies the Association that the other party neglects or
refuses to honour the award, the Council may in its discretion post on the
Association's notice board and/or circulate to Members in any way thought
fit notification to that effect.(22:1/125).

To be told of the possible consequences of his neglect or refusal is often

enough to cause a party to honour the award. But if not, the party in whose
favour the award is made may have to seek the assistance of the Court in the
country of the party against whom it is made for enforcement of the award.
The law of the Association's contracts and arbitration is English law. For
parties in England there is a fairly simple procedure for applying to the High
Court to obtain a judgment for execution of the award.

However, almost all Association awards involve one party, and often both,
from a country other than England. A party seeking to have an award
enforced in a country other than England should take legal advice on the
procedures that apply. In almost all cases there will be a requirement for an
authenticated copy of the award and perhaps of the arbitration agreement. In
this the Secretariat is able to assist by providing notarised copies of the
awards, legalised as necessary for enforcement in the appropriate country,
together with affidavits sworn by Association staff to the effect that the
necessary procedures under the Arbitration Rules have been complied with.
A fee is charged for this service.

Different countries have different laws and procedures for enforcement of

foreign awards. But there are two international conventions to which most
countries of the world are parties. They are the Geneva Convention of 1927
on the Execution of Foreign Arbitral Awards and the New York Convention of
1958 of the Recognition and Enforcement of Foreign Arbitral Awards. Under
the Geneva Convention each contracting country is required to recognise as
binding and to enforce awards made in the territory of another contracting
state, under certain conditions. The New York Convention applies to the
recognition and enforcement of arbitral awards made in the territory of a
state other than the state where the recognition and enforcement of such
awards are sought. One practical improvement introduced by the New York
Convention is that it has restricted the grounds on which the court of the
country in which a foreign award is sought to be enforced can re-examine it.
Also, the onus of proving that award was not enforceable is placed on the
defendant.

31
 Chapter 9

SIMPLE DISPUTE RESOLUTION

The Simple Dispute Resolution Rules is an alternative dispute resolution
procedure to the two tier arbitration system. In order to provide a service
for parties who have a simple problem to resolve which they do not
believe warrants the two tier arbitration facilities provided by Form No.
125, GAFTA has provided set of rules, Form No. 126.

After the dispute has arisen, the parties may sign the agreement attached
to Form No. 126. This means that have opted out of the requirements of
Arbitration Rules No. 125 and have instead elected to have a sole
arbitrator, with an one-tier arbitration, no legal representation, with no
appeal either to GAFTA or to the Courts.

The submissions and award will be produced within a set timetable and
the arbitrator and Association's fee will be laid down in advance by the
Association's Council.

32
 Chapter 10

MEDIATION
Mediation is an alternative dispute resolution procedure to facilitate the
parties in settling their differences or disputes. Mediation Rules No.128.

A Mediator is appointed by the two disputing parties to assist them in a

meeting to find a resolution and reach a settlement. A Mediator has no
authority or power to bind the parties, only to facilitate a settlement
agreement.

In the event that a settlement cannot be achieved, where the parties had
originally claimed arbitration they are entitled to revert to the arbitration
and continue with the arbitration.

33
 Chapter 11

THE COUNCIL & SECRETARIAT

THE COUNCIL

Under the Memorandum & Articles of Association one of the objects for
which GAFTA was established is to provide facilities for the settlement of
disputes by arbitration and to act as arbitrator, or to appoint persons to
act as arbitrators, in the settlement of disputes arising out of transactions
in or relating to the Trade. The Council is the governing body of the
Association and its duty is to provide the service required under these
articles.

Any irregularities in the conduct of arbitration by the arbitrators should be

reported to GAFTA. Arbitrators are reminded that the Council may
exercise its powers under the Association's Rules and Regulations
regarding membership of the Association and under the CPDP with regard
to the Criteria for Qualified Arbitrators.

THE SECRETARIAT

The Association, through its staff, administers the system of arbitration. It is

not GAFTA's policy to interpret its contract terms or rules, particularly
when these are the subject of a dispute. They can help with the procedures
to assist the smooth running of an arbitration or mediation.

The Associations duties will be as follows:

1. To appoint arbitrators on application by either party when required

under the Arbitration Rules;

2. To appoint the chairman of the tribunal, or the sole arbitrator or the

mediator.

3. To appoint substitute arbitrators in certain circumstances;

4. To appoint the board of appeal and its chairman

5. Monitor the conduct of the arbitrators and the progress of the case,
and report to the Council

34
 6. To type the awards of arbitrators, and recommend changes to style
(not substance) where appropriate,

7. To follow up parties complaints in accordance with the Rules and

Code of Conduct,

8. To charge the Association's fees as approved by the Council.

9. On receiving payment of the fees from the parties, to issue the awards
and arrange payment of arbitrators' costs, fees and expenses.

RULES OF CONDUCT FOR ARBITRATORS

An arbitrator is a person appointed to adjudicate impartially in a

dispute between two parties and shall not take on the role of an
advocate.

The Rules and Code of Conduct are issued specifically for Qualified
Arbitrators and Qualified Mediators who are Members of GAFTA either
under Category D (as individuals) or under Category I (as employees of
other GAFTA Members acting with their employers consent). They apply
to arbitrations, appeals and mediations as appropriate, and can be found in
the Associations Members Handbook.

Any person may make a challenge to the Director General regarding an

Arbitrator's eligibility to act in a particular case, on any of the following
grounds:

1. that he is not impartial or there are doubts as to his

impartiality;

2. that he does not possess the qualifications required by the

arbitration agreement;

3. that he has failed or refused to conduct the proceedings

properly;

4. that he is incapable of acting;

5. that he has acted or proposes to act in excess of his

jurisdiction;

6. that he has failed or refused to use all reasonable dispatch in

conducting the arbitration or making an award;

7. That he has failed to comply with the requirements of the

Continuing Professional Development Programme as
decided by the Council.
35
 Chapter 12

A Z REFERENCES
ADDUCE: Cite as proof

ADR: Alternative Dispute Resolution

A means of resolving a dispute under GAFTA contracts by arbitration or by
mediation, which does not involve court litigation.

AMIABLE COMPOSITEUR
A person who has the power to judge equitably without complying with the
rules and procedures applicable to arbitrations and can be empowered by the
parties to judge the issue without having to apply the rules of law with regard
to the substance of the matter. This would not exempt the parties from their
obligations in law and contract. This is not a service offered by GAFTA.

ANTON PILLAR ORDERS: Search and Seizure Orders

ARBITRATION ACT: Arbitration Act 1996 (replaces the Acts of 1950, 1975,
and 1979)

ASSESSMENT PANEL
Is a panel of 5 persons appointed annually by the Council as required by the
CPDP (Continuing Professional Development Programme), to recommend the
appointment of individual members to become Qualified Arbitrators.

ASSOCIATION: GAFTA, the Grain and Feed Trade Association

CIRCULATION OF AWARDS TO MEMBERS

Where both parties agree, GAFTA may publish the final award to Members.
The parties and arbitrators' names and other references that identify them or
the contract will be deleted before publication.

COMMON LAW
The body of law established by the decisions of the Courts and set out in
the reported judgments.

CONCILIATION
An alternative form of dispute resolution where the mediator attempts to
reconcile the differences between disputing parties.

CONSOLIDATION: (Amalgamating disputes arising out of strings of

contracts into one arbitration).

36
COUNTER-CLAIM
When a party initiates a claim in arbitration and the other party
(respondent) also has a claim arising out of the same contract, the
respondent's claim in the same reference is called a counter-claim. All
claims admitted by the arbitrators will be dealt with in the same
arbitration.

COURTS
Under the Arbitration Act 1996 if the parties resort to arbitration generally
most matters are resolved by the arbitrators and the High Court in
England would not interfere during the course of an arbitration except to
be of assistance and supportive of the arbitral process when called upon
by either the arbitrators or one of the parties.

Once a final award is published if a party is successful in obtaining leave to

submit its case to the High Court, a further restriction is that there can be
no appeal from the High Court Judge to the Court of Appeal, unless he, or
the Court of Appeal, gives leave This is why it is essential for the board of
appeal to give a sufficiently reasoned award for the Judge to be satisfied
whether or not the determination of the question of law will substantially
affect the rights of one or more of the parties or on the basis of the findings
of fact in the award the decision of the tribunal was obviously wrong or
open to serious doubt.

When a final award is issued by GAFTA, it is final and binding on the parties
and should be settled as directed .

CPDP: Continuing Professional Development Programme

The syllabus for this programme was introduced by GAFTA in 1996 and is
updated from time to time by the Council. It is for the training and
education of Members' employees in general and of arbitrators in
particular for them to achieve and maintain GAFTA Qualified Arbitrator
status.

EXPARTE
Where a principal party to the reference is absent and the arbitration
proceeds in their absence. (In the High Court however this means that a
hearing can be for benefit of one party in the absence of the other, i.e.
Mareva Injunction).

EXPERT: See Witness

FACTS: See Evidence

FREEZING ORDER, Mareva Injunction: Restraint Order

Is an order to prevent a defendant from removing assets from the
jurisdiction so that enforcement of a Judgment is impossible.

FUNCTUS OFFICIO

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When the arbitrators have completed the reference and issued their award
and when they have no further authority or legal competence to act in any
matter concerning the arbitration. See Sections 58,59, 60 of the Arbitration
act for the time limits for award clarifications and corrections.

INTERLOCUTORY ORDERS
Orders or directions from the tribunal to the parties during the course of
the arbitration prior to the issuance of their award, e.g. allowing a party
further time before complying with a deadline.

LANGUAGE
All documents provided in arbitration should be in English or translated
into English language, unless another language is agreed by the parties. In
the event of a dispute on the validity of the translation, the document(s)
should be translated by an accredited/independent translator.

Each award should be written in plain English, is self-explanatory and

clear as to its meaning.

LAW: Common Law, Statute Law, and Proper Law

LAWYERS
Where the parties engage solicitors/lawyers/legal advisors to assist them
with their arbitration submissions and hearing representation they should
notify the other party to the dispute..

LIQUIDATED DAMAGES
When the measure of damages, if a party breaches the agreement, is
determined by the contract provisions in advance.

MERCANTILE LAW
Very similar to the law-merchant, designating a system of rules, customs and
usages generally recognised and adopted by traders.

OFFICERS OF GAFTA
The President, Deputy President, Vice-President, Immediate Past-President,
Director General & Secretary of GAFTA.

PRIMA FACIE: On the face of it

For example, when a claimant produces a document purporting to be a
contract subject to the GAFTA Arbitration Rules, which the other party
refutes, the Secretariat or Officers of the Association will not give an
opinion on the validity of the document. In such cases however they will if
called on to do so, appoint an arbitrator and it will be a matter for the
tribunal to decide whether or not there is a contract and they have
jurisdiction act in the matter.

PRIVILEGED DOCUMENTS

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Documents which a party does not have to disclose or show to the other
side or the arbitrators in arbitration. For example, without prejudice
correspondence, or, generally speaking, correspondence between a party
and his own legal advisers.

PROPER LAW: The law governing the contract and arbitration rules.

QUALIFIED ARBITRATORS
GAFTA Members or employees of Members, who have been assessed under
the CPDP by the Association's Assessment Panel as being entitled to accept
appointments as GAFTA Qualified Arbitrators.

RULES: Arbitration Rules Form No.125 - two tier system

Arbitration Rules Form No. 126 - Simple dispute resolution
Arbitration Rules Form No. 127- Maritime
Mediation Rules No.128.

SAMPLES
Parties or arbitrators who wish to carry out arbitrations requiring the
examination of samples are advised to notify GAFTA and to give not less
than 24 hours prior notice for the samples to be made available. Samples
may be disposed of 6 months after they are received unless a specific
request has been made to and acknowledged by GAFTA.

SCOTT -v-AVERY CLAUSE

This is a provision in arbitration agreements which provide that neither
party involved in a dispute may bring any action against the other in court
on the merits of a case (substantive issue) without first having obtained an
award through the GAFTA arbitration process. The Arbitration and
Domicile clauses of Gafta Contract forms do allow parties to take injunctive
ancillary relief in any court to secure their risk.

SLIP RULE: Errors and Omissions

Where an arbitrator makes an accidental slip, or an error or omission in an
award this can be rectified upon application to the tribunal in accordance with
the Arbitration Act 1996.

STATUTE LAW: The law passed by a legislative body

TORT: A tort is a division of law. A legal term covering civil wrongs; areas
where injury is caused to a person or property. Civil wrongs could include
negligence, nuisance or defamation of character.

TRITE LAW: Is obvious and commonly known law.

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 Printed in England and issued by

GAFTA
THE GRAIN AND FEED TRADE ASSOCIATION
9 LINCOLNS INN FIELDS, LONDON WC2A 3BP
post@gafta.com
www.gafta.com

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