|
It was indeed an honor to be asked, along with my colleague Mr.
Andrew Macdonald, to present at the June workshops in Dhaka
which were organized and sponsored by Royal Inspection
International and provided an excellent forum to discuss various
issues relating to the cotton trade today in Bangladesh.
Open opinions on contractual terms and conditions and the
application of I.C.A. Bylaws and Rules were exchanged which
afforded an opportunity, not only to all sectors of the local
market, but also for the presenters to obtain an understanding
of the various issues and areas of concern within the local
trade and to discuss what remedies may be available.
From the supportive comments received many perceptions of the
I.C.A. Rules were addressed at the sessions with a close
scrutiny to the detail contained within contract terms and
conditions applying to the import of cotton into Bangladesh
today.
What is the short and long term solution to promote good trading
practice?
 There is a clear necessity for parties to a contract to hold a
full understanding of the rules and to ensure all contacts
represent the terms and conditions on which they have agreed to
be bound.
It is not uncommon to witness problems arising from initial and
relatively minor misunderstandings which could, if properly
addressed, be resolved without incurring further proceedings.
Not only does clarity play an important role but care should be
taken to ensure there are no omissions in any specific contract
term or condition which may later impact on performance.
Expressions that are unclear along with a general lack of
consideration to detail are a major culprit and therefore a
cause of disputes and wherever possible should obviously be
avoided.
A clear understanding of the application of specific rules (and
associated bylaws) is essential to protect the parties'
self-interests along with recognition of the general principle
that ambiguity should be avoided at all cost in not only
contract documents but also communications as this will better
support the principle of sanctity of contract.
Consultation is important but what is imperative is the parties
hold adequate knowledge to address any technical issues that may
arise from time to time.
In the short term dedication to detail is essential and access
to knowledge is required to address any perceived imbalance of
understanding of those rules, terms or conditions applicable to
contracts. It is likewise important that a proactive response
and consultation is taken at the time any perceived anomaly or
problem is identified.
A level playing field with both parties holding an equal
knowledge of the 'game' or 'club' rules will assist in
addressing these issues although it is understood no contract
party wishes to spend time on dispute resolution and therefore
consultation may be necessary at an early stage to address any
issue in a cost effective manner.
The I.C.A. Bylaws and Rules were created to assist the trade in
raw cotton and have been adjusted over the years to adopt to
changes in the trade and are impartial to both parties. These
rules however are only intended as a tool and may, with the
mutual consent of the parties, be adapted to meet any specific
requirements of the parties under a contract.
Tradition dictates that most contracts in Bangladesh are
transacted through a local indenter. It is obvious any employed
agent must hold a clear understanding of the rules that may
apply to a contact they are negotiating or performance they are
handling on behalf of their respective party's.
It was rewarding, not only from the viewpoint of the presenters,
but also I am sure from the growing number of mill clients in
Bangladesh, to see such a strong support and attendance from
this sector at the workshops as any problems or issues should be
addressed by the indenter at the initial stage of negotiation or
the time of the event when the parties construct their
obligations or negotiate any amendment.
To avoid ambiguity all agreements, amendments and directions
should be evidenced in writing, wherever possible and within a
short period of time following the event.
All negotiations should be well documented and the principle of
contract signing be adopted by the parties and where
negotiations take place by phone such exchanges and agreements
should be confirmed in writing in a timely fashion to ensure
both parties have adequate opportunity to address any anomalies
that may exist from time to time.
 From the comments received I consider it would be supportive to
hold annual seminars/workshops to allow a regular forum for
exchange of views and where necessary to seek clarification on
any contract or performance related matters as this would
obviously support the concept of good trading practice in
Bangladesh and to this end it may be considered beneficial for
international presenters to be invited to supply their
International perspective and viewpoint.
The continuing involvement of representative trade bodies in
actively supporting sanctity of contract and good trading
practices is essential taking the lead in promoting a clear
understanding and knowledge of the trade terms and conditions on
which a majority of their members are regularly transacting
business.
I consider this to be fundamental for any market but
specifically when considering the expansive market in Bangladesh
today with an increasing number of members.
We never stop learning in life and the same principle obviously
applies to our trade in raw cotton, it is essential therefore
that the parties to a contract are open to understanding and to
any changes affecting the market working closely with our
partners addressing any areas of concern at an early stage.
From this point we can therefore proceed forward and promote
those mechanisms essential to sustain the concept of good
trading practice in our cotton business transactions. ¨
|
Home |
|