A look at how we ended the year with arbitrations and more about our new mediation service.
Operating conditions remained stable during 2014, with arbitration requests reaching 45. This figure is down on last year (76 requests in 2013) and marks a return to our normal yearly average, following the record high of 247 requests in 2012.
“In this business, it is very difficult to predict how many arbitration requests we will receive year on year,” says ICA President, Jordan Lea. “From the volatility of 2010 and 2011 to a recent period of stability, the market is now starting to move downwards. This trend could see another increase in contract defaults and possibly arbitrations, but with the improvements we have made to our arbitration process and our new 24/7 automated document management system, we are much better placed to deal with any fall out.”
Previous high volumes have resulted in an increase in the number of firms on our List of Unfulfilled Awards, more commonly known in the industry as the ‘default list’, which now stands at 716. We want to see this figure reduce and we believe that our new mediation service will help, as Jordan explains:
“Arbitration is a last resort in a contract dispute and if the dispute ends up in a court of law, one of the first questions asked is if any attempt has been made at mediation. We know that mediation is very successful – in a recent survey of 1,000+ mediations they found that 75 per cent settled during the mediation and 12 per cent settled a few weeks after.* We also know that more firms would welcome mediation – in fact, some firms find it culturally more acceptable.
“Our new mediation service provides a flexible, confidential and cost effective alternative dispute resolution service. It can take place before, during and after arbitration – helping to prevent disputes escalating to the point of arbitration in the first place and also offering a solution to firms already on our List of Unfulfilled Awards.
“We do not expect mediation to be a panacea, but if we can find a way to settle disputes, where the aggrieved party is justly compensated and the corresponding party is not forced underground and faced with circumnavigating the List of Unfulfilled Awards in order to trade cotton, we will all experience and enjoy a more successful, robust and safer trading environment.”