RULES AND REGULATIONS OF THE COTTON STATES ARBITRATION BOARD
After the Southern Mill Rules were published in 1925 by the American Cotton Manufacturers Association and the American Cotton Shippers Association, the two organizations established the Cotton States Arbitration Board in New Orleans, Louisiana, in 1926 to adjudicate quality disputes. They also created that same year the Board of Appeals to settle disputes for all matters other than quality.
The Cotton States Arbitration Board was moved to Atlanta, Georgia, in 1928 and remained there until 1972 when it was transferred to Memphis, Tennessee. Arrangements were then made with the Board of Supervising Cotton Examiners of the United States Department of Agriculture to perform arbitration work for the industry.
The operations of the Board are coordinated by an Executive Committee composed of a member and an alternate from NCTO and ACSA/Amcot. Changes in the Rules and Regulations of the Board are considered in the annual Joint Meeting between the two organizations.
A detailed explanation of services available to mills and merchants is provided in a separate section.
RULES AND REGULATIONS OF THE COTTON STATES ARBITRATION BOARD
RULE 1: This Board is organized jointly by the American Cotton Shippers Association/Amcot and the National Council of Textile Organizations, and it is to be governed by an Executive Committee composed of one representative and alternate of each of the above Organizations.
RULE 2: The Executive Committee shall endeavor to hold one meeting annually as soon after the annual meetings of the American Cotton Shippers Association/Amcot and the National Council of Textile Organizations, as is practicable. Special meetings will be held upon written request of any member of the Executive Committee.
II. PROTECTION FROM INFLUENCE
RULE 3: No manufacturer or shipper will be allowed, under any circumstances, to communicate with the Arbitration Board in any way in expressing their opinion about anything, except to request return of samples, provided notice is made within ten days of the arbitration. It will be the duty of everyone connected with the Arbitration Board to advise the Executive Committee, in writing, if anyone approaches them directly or indirectly endeavoring to influence them in the discharge of their duties.
RULE 4: In case anyone tries to influence the Board on any arbitration or classification, by notifying them of their previous class on the cotton, it will be the duty of the Executive Committee to advise the membership of each Organization in writing of the entire circumstances of the matter.
III. PROCEDURE FOR ARBITRATION
RULE 5: All parties to an arbitration should come to a definite understanding of the question in dispute before its submission to the Arbitration Board.
RULE 6: All samples sent for arbitration must be accompanied by instructions stating clearly the points to be arbitrated and the names of the parties to the arbitration, also setting forth the terms of the contract relating to the number of bales to be arbitrated, grade, and/or staple, micronaire, or HVI.
RULE 7: Parties requesting arbitration should send copies of their instructions to all other interested parties, so that there will be no conflict of instructions. In the absence of exceptions from second parties, arbitrations will be held according to the instructions received.
RULE 8: Unless otherwise advised, the basis of all arbitrations is considered to be the Southern Mill Rules, as amended to date of contract. Special clauses not included in these rules, which are included in the contract of sale, will be taken into consideration in the arbitration. All arbitrations will be held strictly in accordance with the letter and intent of contract and in case all points of any contract are not covered by the rules, herein set forth, such points are to be arbitrated according to the general interpretation of the trade in regard to same, the Arbitration Board to interpret such points to the best of their ability.
RULE 9: The Executive Committee shall have the authority to refuse the services of the Board for the purpose of acting on other than bona fide arbitrations should they decide it is in the best interest of the Board, in order to secure more efficient results.
RULE 10: The names of the parties interested in the outcome of the arbitration are not to be disclosed to the classers whose returns are to be made on the merit of the samples submitted.
RULE 11: The samples and types submitted for arbitration are to bear an identification number or mark on the outside of the sample package. Other exterior markings should include the number of bales and the “Type” name.
RULE 12: If samples and types are not prepared properly, it will be the privilege of the Board to return them for proper preparation prior to submission for classing.
RULE 13: All samples submitted for arbitration shall be fair and representative of the bales and acceptable to the USDA Board of Cotton Examiners. Samples are to be drawn from each side of the bale and couponed. Sample size should accommodate two HVI readings.
RULE 14: All samples shall be properly wrapped and each sample must have an identification tag enclosed, with a maximum of 65 samples per package. Marks and number of bales must show distinctly on outside of the packages.
It is the purpose of this Board to avoid putting before the arbitrators any samples that will in any way identify the cotton, or parties interested. Samples containing tags that show, in addition to numbers, other data such as marks, names of mills, shippers or warehouses, or notation of grade or staple should not be sent. Any samples, which do not conform to this rule, may be returned to the sender for proper preparation.
V. QUALITY ARBITRATION
A. Against Standards of the USDA
RULE 15: The basis of all arbitrations for grade and/or staple shall be the Official Universal Cotton Standards of the United States Department of Agriculture for grade and/or the Official Cotton Standards of the United States Department of Agriculture for length of staple, except arbitrations of cotton sold against private type or types for grade or staple, or both.
B. Against Private Types
RULE 16: Where sales are made on a private type for grade and/or staple, arbitration will be held against the actual type on which purchase is made, or against a sealed type, approved and sealed on or before contract entered into by interested parties.
RULE 17: Private types are to be sent to the USDA the first arbitration of the fiscal year (July 1-June 30) and that type will be used for all arbitrations that fiscal year.
C. Effect of Previous Arbitration
RULE 18: The Board will class cotton for either mill or shipper on Universal Standards for grade and on Government Standards for staple, or against private types. However, it will not be incumbent on mills, or other buyers, to accept the Board’s class on the samples submitted for classification before tender or shipment. They will have the privilege of demanding arbitration on redrawn samples at destination. The Board will not be responsible for any variation on their class on samples submitted before tender or shipment, and their class on the samples submitted for arbitration or classification of the cotton after tender or shipment.
RULE 19: It will also be against the rules of the Board for anyone having had cotton classed before tender or delivery against contract to notify the Board regarding its previous class on the cotton, in case the cotton is arbitrated after tender or delivery.
D. Arbitrations for Grade
RULE 20: No cotton arbitrated by the Board will be passed for grade against Official Universal Cotton Standards unless equal thereto.
RULE 21: On all arbitrations for grade against Universal Cotton Standards, where the grade of the samples submitted for arbitration is equal to or better than any sample in the Standard, the cotton will be passed against the description of the Standard.
RULE 22: When arbitration is requested against “Bright” on any of the Universal Standards for grade, the cotton will be classed against one color grade above its leaf grade.
VI. MICRONAIRE ARBITRATIONS AND OR/HVI ARBITRATIONS
RULE 23: Samples for micronaire and/or HVI arbitrations are to be submitted under the procedures outlined in “IV SAMPLES.”
RULE 24: Micronaire and/or HVI arbitration techniques shall be the same as those used in determining these data for the original Smith-Doxey Classification.
RULE 25: The Board will send outturns to both interested parties and the party requesting the arbitration in coordination with the other party shall determine the “passes” and the “not ups.”
Rule 26: Current fee schedules can be obtained from the American Cotton Shippers Association or the National Council of Textile Organizations (NCTO). The following are services for which fees will be charged:
Color Grade and/or Leaf Sample- $ 2.20
HVI Classification, including Color
and/or Leaf Grade $4.00
HVI Classification, excluding Color
and/or Leaf Grade $2.70
(HVI Classification includes, micronaire, length, uniformity, trash and color).
RULE 27: The party requesting the arbitration shall be responsible for payment to USDA for classing fees. The requesting party is the party sending the samples to the Board. The requesting party is responsible for billing the other party for their pro-rata share of the arbitration cost.
RULE 28: The Executive Committee may have a complete audit of accounts of the USDA results made annually or more often at its discretion. The results of audits are to be sent to all members of the Executive Committee.
RULE 29: The rules governing the Arbitration Board cannot be altered or amended until such alterations or amendments are approved by the Committee representing the shippers’ and by the manufacturers’ organization, and adopted by the organizations.