Gafta is a multinational organization that facilitates trade in cereal grains worldwide. The organization also handles international commercial arbitration. Gafta is a global alliance with over 1,500 businesses from 89 nations. Gafta’s primary offering is the creation of typical pro forma agreements for trading grains. The advantages of these contracts and the primary steps of the arbitration process are discussed in this article.
Benefits of Basic Grain Trade Contracts
Gafta offers several customizable contract templates to accommodate a variety of transport modes and commercial scenarios. It has the initial benefit of requiring agreement between the parties only on the essential (price, quality, timing). Specific Gafta contracts provide all additional relevant information. This is a really practical circumstance to be in. Not unexpectedly, typical grain trade contracts form the basis of 80% of the world’s grain commerce.
The short application period of one year is another perk. In this case, the date of the bill of lading, the date of discharge, or the end of the delivery term is acceptable benchmarks. The deadline for filing a claim is one year from when a quality problem was first brought to light. In some situations, a petitioner may get a six-year extension.
The cost-effectiveness of Gafta’s solutions is another point worth mentioning. The mean cost is £14,654.65. That sum could seem like a lot to someone who has never dealt with GAFTA. On the other hand, context is critical. The London Court of International Arbitration will charge multiple times as much for a similar process.
Steps in a Typical Dispute Resolution Process
A dedicated arbitration body handles disputes that arise during the implementation of contracts in Gafta. Each arbitration proceeding between the parties follows the same basic structure.
Gafta 125 and Gafta 126 are used very often. An arbitrator must be chosen, and a claim must be submitted first. After the first payment has been completed, the complaint preparation procedure may start in 21 days. If more time is needed, they may go into further detail. The association’s secretary keeps a record of correspondence. The arbitrators and the parties do not have any personal contact throughout the proceedings.
It’s worth mentioning that the panel considers the Gafta arbitration case. In this case, the arbitrators will act as judges. Their role is not that of counsel for either side. Successful lawsuits need the work of experienced attorneys who can evaluate the likelihood of winning and provide the necessary paperwork. You need to consult with experts if you want to construct a defense or prosecution line, avoid pitfalls, and accomplish your aims.
How to Proceed After Receiving the Award
Even if a business succeeds, the battle is far from done. The decision may be enforced and recognized in any jurisdiction where the company is registered. That is to say, wherever the debtor’s assets are listed as being located is where the enforcement action will take place.
How does the enforcement procedure work, exactly? The proper forms must be submitted to the local court, including a certified judgment and contract. The executor then receives the award, and the debtor is required to pay a certain sum.
Is there a plan B if the debtor conceals all assets until the judgment is enforced?
Keep in mind that Gafta is not a magic bullet for fixing everything. It’s best practice to check the arbitration’s viability with a few basic measures before committing to it. The practice demonstrates that many consumers fail to do their due diligence by at least doing a Google search on the organization, which may prevent problems 50% of the time.
The arbitration will take place in London as per the Gafta template that is part of the contract. This provision may appear inconsequential at first glance, yet it has significant ramifications.
Since London is the location of the arbitration, the claimant may seek protection from the High Court of England and Wales in the meanwhile. An example of a temporary remedy is a “worldwide freezing order,” or WFO, which “freezes” the debtor’s international assets to collect on a debt. Moreover, directors and, in certain cases, beneficiaries who disobey such an order might face jail. It is standard practice for an application to get a disclosure order in conjunction with a WFO, which compels the debtor to reveal all of his assets to the court.
The fundamental benefit of a WFO is that the claimant may get one before resorting to arbitration, and the court’s hearing decides whether to issue a WFO is conducted in absentia. There is a strong potential for the dissipation of assets in fraud cases, making the WFO all the more important.