Arbitration FAQ

How do I commence arbitration?

In order to claim arbitration at Gafta we require a simple e-mail to arbitration@gafta.com, with copy to your counter party that outlines the names of parties involved, a copy of the relevant contract/contracts, addresses (email and physical) for both parties involved, names of any arbitrators appointed (or if you request a Sole Arbitrator) and also names of any legal teams authorised to act. Gafta will acknowledge receipt of the claim to both parties and then open a pending case for the claim and allocate a Gafta reference number. We will advise next steps once the case has been created.

What is the difference between Gafta 125 rules and Gafta 126 rules?

Gafta 125 Arbitration Rules
Usually for larger more complex claims.

  • Determined by a Tribunal of 3 or a sole arbitrator
  • Parties are able to appeal
  • Usually more expensive and takes longer than 126 cases

Gafta 126 Rules – Expedited Arbitration Procedure Rules
This is for smaller claims that require an expedited arbitration.

  • Determined by a Sole Arbitrator only
  • Parties can agree to contract into Gafta 126 Rules even if the original contract mentions Gafta 125 Rules
  • No right of appeal
  • Can be cheaper and faster than Gafta 125 Arbitration cases

Can non-members come to Arbitration?

Yes. You are not required to be a member of the Association in order to commence arbitration. The parties must however have contracted into Arbitration Rules 125 or 126 so that in the event of a dispute, the matter is referred to Gafta.

There is a charge of £1,700 for all non-member parties on issuance of each Gafta award.

How do I appoint an arbitrator?

Under Gafta 125 Rules, parties are to appoint their own arbitrators unless the parties are wishing to proceed with a sole arbitrator or if Gafta have been requested to appoint an arbitrator on behalf of the parties. Parties can choose an arbitrator from the list of Gafta Qualified Arbitrators and will have to contact the chosen arbitrator for their approval of their appointment.

Under Gafta 126 Rules – The dispute shall be heard and determined by the Arbitrator appointed either by agreement of the parties or by Gafta. If the parties are appointing, then they must do so by agreeing to a sole arbitrator chosen from the list of Gafta Qualified Arbitrators

If the parties apply to Gafta to appoint a sole arbitrator, they must provide the items as per 3.3 of Gafta 126 Rules before Gafta can appoint.

The appointment fee for Gafta to appoint a Sole arbitrator under 126 Rules is £150.00.

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 Guidelines for Gafta Appointment of Arbitrators and a 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. Gafta also have a directory of Gafta qualified arbitrators.

How do we apply to Gafta to appoint a sole arbitrator under Gafta 125 Rules?

The Claimant should seek agreement from the Respondents for Gafta to appoint a sole arbitrator. Where the parties have agreed to the appointment of a sole arbitrator, or where the respondent has not responded to the claimant’s notice under 3.1(a) of Gafta 125 Rules, or where the respondent has not agreed to a sole arbitrator but has not appointed an arbitrator, Gafta shall appoint an arbitrator on receipt of the first statements and evidence submitted.

N.B. Parties are only seeking agreement for Gafta to appoint a sole arbitrator. The sole arbitrator is not to be chosen by the parties

How do we apply to Gafta to appoint a sole arbitrator under Gafta 126 Rules?

Gafta 126 Rules provide the following:

"3.2 If there is no agreement on the identity of the Arbitrator within a period of 14 days from the request of either party, then either party may apply to Gafta for an Arbitrator to be appointed.

3.3 Applications to Gafta for the appointment of an Arbitrator shall be accompanied by:

(a) prima facie evidence that the parties have entered into a contract subject to these Rules,

(b) copies of the notices (i) stating their intention to refer a dispute to arbitration and (ii) stating that an application will be made to Gafta for the appointment of an Arbitrator,

(c) the appropriate fee ruling at the date of application which is £150.00

3.4 Upon an application being made to Gafta under Rule 3.3 for the appointment of an Arbitrator, Gafta will make the appointment and will give notice of the name of the Arbitrator appointed to the parties."

How do we apply to Gafta to appoint an arbitrator on behalf of the Respondents?

Under Gafta 125 Rules, where the Respondents have failed to appoint their arbitrator within the 9-day time limit, the Claimants can apply to Gafta to appoint an arbitrator on behalf of the Respondents.

Applications to Gafta for the appointment of an arbitrator shall be accompanied by:

  • prima facie evidence that the parties have entered into a contract subject to these Rules,
  • copies of the notices (i) claiming arbitration and (ii) stating that an application will be made to Gafta for the appointment of an arbitrator,
  • the appropriate fee ruling at the date of application which is £150.00

Upon receipt of the above items, Gafta will make the appointment and give notice of the name of the arbitrator appointed.

When are the claim submissions due?

There is no time limit for the service of claim submissions. Unless we receive the claim submissions Gafta will not be able to proceed to appoint a chairman to complete the Tribunal (or a sole arbitrator) and the case will be set as a pending case. However, the claimants will need to renew the case every year from the date of the notice of arbitration for up to 6 years if they are not wanting for the case to be deemed lapsed.

Where do parties send hard copies of submissions during the pandemic?

Gafta is currently accepting service of electronic submissions. Gafta will then ask the members of the Tribunal if hard copies are required, and if so, we are asking the parties to send hard copies of the required submissions directly to the members of the Tribunal. Gafta will provide physical addresses when needed. Parties will still need to provide hard copies to the other party if needed also.

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, or whether there is an oral hearing. A non-member fee of £1,700 applies to each party that is a non-member on issuance of each Gafta award. There is an issue fee of £1,250 for a first tier case and £3,500 for an appeal. For 126 cases there is an issue fee of £700.

The amount of deposit to be called for is:
£12,000 when both parties are members
£13,500 when one party is a non-member
£15,000 when both parties are non-members
£17,000 for all appeals

For first tier sole arbitrator cases the amount of deposit to be called for is:
£8,000 when both parties are members
£9,700 when one party is a non-member
£11,400 when both parties are non-members

The members of the Tribunal may wish to call for further deposit if the case is more complex to cover the Tribunals fees and expenses.

Average Cost of Awards

 

First Tier
(125 Rules)

Appeal

126 Rules

IGPA

Association fees

£1391.92

£3,521.06

£1,016.57

£1,020.00

Arbitrator fees

£11,014.67

£19,726.13

£4,411.00

£2,000.00

Total fees (plus Non-Member charges)

£14,654.65

£23,816.78

£7013.29

£6,136.00

Who pays the deposit and when is the deposit due?

The Claimants will be requested to pay the deposit once the claim submissions have been received and a chairman or sole arbitrator has been appointed by Gafta.

How can deposits be paid?

Deposits can be paid directly into our bank account, the details of which are:

Account Name: The Grain and Feed Trade Association

Bank Details: HSBC Bank Plc, 95 Gracechurch Street, London, EC3V 0DQ, UK

Account Number: 60402389

Sort Code: 40 04 12

Swift Code: HBUKGB4110F

IBAN No: GB52HBUK40041260402389

Please refer to the Gafta case number when making a payment so we can identify it. Payment is to be made in POUNDS STERLING, free of all charges.

Can we request invoices?

If you need an invoice for a deposit, please request one via arbitration@gafta.com and please confirm before we raise the requested document the full name, address and where applicable EU VAT number of the party to be invoiced.

Unfortunately, we are unable to issue an official/VAT invoice at this stage of proceedings. The request is for a deposit against fees yet to accrue. An invoice if required will be issued on request at the end of proceedings once the full final costs are known. In the meantime, Gafta will send a proforma invoice and parties are to arrange for the requested deposit sum to be paid as soon as possible in order for the matter to proceed.

If you want invoices for appointment of arbitrator fees, certificates etc., please confirm before we raise the requested document the full name, address and, where applicable, the EU VAT number of the party to be invoiced.

If there is a remaining balance of the deposit once the award has been issued, will this be returned to the party?

Whether or not the Claimants are successful in the Award, if there is a remaining balance from the deposit, Gafta will refund the Claimants upon receipt of the Claimants bank details on company headed paper. Any sums awarded in the Award will then need to be arranged between the parties.

The value of 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 Expedited Arbitration Procedure Rules No. 126. These allow for a quick arbitration so both parties can get on with the business of trade. Both parties must expressly agree to the Rules.

How long will it take?

It is not possible to give an estimate. The standard timetable for a first tier case provides that once a Claimant has submitted 4 hard copies of their Claim submissions and paid the deposit, 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. The average time taken from the date of the timetable being set to the date of issue was 7 months for a first tier award and 11 months for an appeal.

In more recent months, with the use of electronic submissions and electronic issuance of awards, the average time for both first tier and appeal cases is approx. 5 months.

Can we consolidate the cases if the matters in dispute are similar?

If parties wish to consolidate matters, there must be an agreement between the parties or parties may request the Tribunal to consolidate matters. Parties are also able to request the same Tribunal members to be appointed across certain cases for consistency.

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.

How do we renew a case?

If neither party submits any documentary evidence or submissions as set out in this Rule or as ordered by the tribunal, within 1 year from the date of the notice claiming arbitration, then, the claimant’s claim shall be deemed to have lapsed on the expiry of the said period of 1 year unless before that date the claim is renewed:

  • by a notice served by either party on the other, such notice to be served during the 30 consecutive days prior to the expiry date, or
  • by the service of documentary evidence or submissions by either party, in which case the claim and counterclaim are each renewed for a further year.

The claim may be thus renewed for successive periods of 1 year, but not to exceed more than 6 years from the date of the first notice served in accordance with Rule 2. Wherever a claim is renewed any counterclaim is also deemed to be renewed.

Please be sure to copy in arbitration@gafta.com when renewing a claim for our files.

Can we withdraw a case?

Yes, a case can be withdrawn at anytime during proceedings. The Claimants will need to inform the arbitration department that they wish to withdraw the case and Gafta will calculate any fees that may have been accrued during proceedings from both Gafta and the Tribunal and deduct this from the deposit. The remaining balance will then be remitted back to the Claimants upon receipt of bank details on company headed paper.

If the case is pending (no deposit yet received) then there may not be any fees and the case will be withdrawn.

If the Award is in our favour will we have to pay any fees?

This will depend on the Award, however any non-member fees will need to be paid by the non-member party and payment will need to be discussed between the parties.

What if there is a mistake in the Award?

Once the Award has been issued, parties may apply for a corrected Award or an additional Award under Section 57 of the Arbitration Act 1996.

How is the Award being issued during the pandemic?

The awards are currently being electronically issued. This includes electronic signatures and electronic date stamps. No hard copies of the Awards will be sent to the parties unless requested.

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

In accordance with Arbitration Rules 125/126 and IGPA, Gafta may post a company who neglects or refuses to carry out or to abide by a final award of Arbitration.

The defaulter process comprises of two standard form letters which are sent to the party apparently in default with copy to the reporting party. If no settlement is informed to Gafta after the first letter has been sent, then a second letter will be sent 6-8 weeks later. If no settlement is made after the second letter, then Gafta will request confirmation from the reporting party to bring the name of the party in default to the Gafta Council to seek their approval. Once Council has approved the posting a circular will be sent to all Gafta members informing them of the name and address of the party in default and the Gafta website will be updated to reflect the default.

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.

If a party wishes to apply to Gafta for the Defaulter service. Please complete the request for posting form and send to arbitration@gafta.com.

Parties needing to enforce Awards can do so by requesting Gafta to provide a certificate (first tier certificate template and appeal certificate template) and request these certificates to be legalised through De Pinna Notaries.

Parties can request Gafta to provide wet signatures from the Tribunal members on the electronically issued Awards.

Please note there is an extra cost for this service from both Gafta and De Pinna Notaries. Please email arbitration@gafta.com for further information.

What if I believe the decision is wrong?

With 125 Arbitration claims, Gafta provide 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 Expedited Arbitration Procedure Rules No. 126, is a single tier Arbitration system and there is no right of appeal under any circumstance.

How much will an oral hearing cost?

For all oral hearings Gafta charges £50.00 per hour for both physical and virtual oral hearings. If catering is required for physical hearings, Gafta will also charge an additional £50.00 per day as an admin fee.

There may be catering, tribunal and any printing and/or courier fees additional to this.

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, and if the parties do not agree it is to be held in London, this can be held anywhere they agree.  In any event wherever the arbitration is, the law which applies is English Law and the Arbitration Act 1996. 

Gafta also are allowing virtual oral hearings which will be for the members of the Board to agree.