Arbitration FAQ

Where will the hearing be held?

The arbitration clause in Gafta Contracts states that arbitration shall be in accordance with the arbitration rules No. 125.  Much of arbitration work is dealt with online. However if the parties wish the arbitrators to convene a hearing, this can be held anywhere they agree. If the parties do not agree it is held in London.  In any event wherever the arbitration is, the law which applies is English Law and the Arbitration Act 1996.  Arbitrators are appointed from the list of Gafta Qualified Arbitrators wherever they are based.

How much will it cost?

It is not possible to provide an estimate of costs, as this will depend on a number of variables. These include the complexity of the case, and whether a sole arbitrator is appointed or a Tribunal of three, whether the hearing is paper-based or before a Tribunal and whether the parties instruct their own lawyers for pre-hearing work. A non-member fee applies to each party who is a non-member. There is an issue fee of £700 for a first time hearing and £2750 for an appeal.

The amount of deposit to be called for is as follows:

£10,000.00 when both parties are members

£11,500.00 when one party is a non-member

£13,000.00 when both parties are non-members

£15,000.00 for all appeals

£8,000.00 for first tier sole arbitrator cases

The value if the dispute is relatively low, will this reduce the costs of the arbitration?

No, not necessarily. Even though the value of the claim may be low, it may still be complex. An option that the parties may wish to consider is the Simple Dispute Rules 126. The 126 Rules provide a system whereby the fees are fixed. These allow for a quick arbitration so both parties can get on with the business of trade. Both parties must expressly agree to the Simple Dispute Rules.

How long will a case take?

It is not possible to give an estimate. The standard timetable for a first tier case provides that once a claimant has issued a claim, the respondents have 28 days to provide their defence submissions. The claimants then have 21 days for a final reply. However, very often there will be further exchanges between the parties which results in a lengthier time frame. If either party requests an oral hearing, this again will generally increase the time frame. When all submissions have been received, the Tribunal will close the proceedings and proceed to the Award save as to any further information they believe is necessary. From close of proceedings to the Award being available for publication is usually between 4 and 8 weeks – however the complexity of the matter will significantly impact on this.

Can we consolidate the cases if the matter in dispute is very similar?

If a dispute arises, each party claims arbitration against the other party as per their contract/arbitration agreement.  It is only when the quality/condition of the goods is in dispute that it is possible for the individual arbitrations to be consolidated and heard as one arbitration.

What if I believe the decision is wrong?

Gafta provides a two tier arbitration facility. Once the first tier award is published the parties have 30 days from its date to lodge an appeal with Gafta. Gafta will then appoint a board of appeal to hear the appeal against the first tier award of arbitration. They will hear both parties' arguments and when completed will produce an appeal award. This award is final and binding on the parties. With regards to Jurisdiction, it is not always possible to Appeal. If a first tier Tribunal rules that they do have jurisdiction to hear a matter, this decision cannot be appealed. Further, The Simple Dispute Rules 126, is a Single Tier Arbitration System and there is no right of appeal under any circumstance.

Can non-members come to arbitration?

Yes. You are not required to be a member of the Association in order to present an arbitration case, either orally or in writing. The parties must however have contracted into Arbitration Rules 125 so that in the event of a dispute, the matter is referred to Gafta.

What if the other side doesn’t participate in the proceedings?

The Tribunal/Board will make an award based on the evidence before it. The non-participation by a party will not affect the validity of the Award.

What if the Award is in my favour and the other side fails to comply?

In accordance with Arbitration Rules 125, Gafta may post a company who neglects or refuses to carry out or to abide by a final award of Arbitration. The defaulter process generally comprises of a number of letters which will be sent to the defaulting party. Each letter gives the defaulting party a time period to comply with the Award. If, after each step has been taken the Award has not been settled, the file will be put before the Council of the Association who will decide whether to post the defaulting party, informing all members via a circular that the defaulting party has failed to comply with an award of arbitration. Each matter will be dealt with in the most suitable way.

One of the main advantages of commercial arbitration is the comparative ease of enforcing an award internationally compared to the enforcement of a foreign court judgment. This is significantly facilitated by the New York Convention of 1958. The Convention essentially imposes on Contracting States the duty to stay court proceedings if a dispute exists and a valid arbitration agreement is established, and most importantly, to recognise and enforce foreign arbitration awards.

What are the backgrounds of the arbitrators?

Gafta qualified arbitrators must have been actively engaged in the grain and feed trade for at least ten years.  Gafta is keen to promote greater transparency in the appointment of Arbitrators and has published two documents- Guidelines for Gafta Appointment of Arbitrators and Letter of Appointment as an Arbitrator. The Guidelines set out the selection criteria which Gafta considers when appointing arbitrators. The Letter of Appointment is a Letter which is signed by Arbitrators annually and sets out the terms on which they are appointed.