AMERICAN COTTON EXPORTERS ASSOCIATION
88 UNION AVENUE, #1204 MEMPHIS, TN 38103
TELEPHONE (901)525-2272 – FAX (901)527-8303
MAINTENANCE OF A DEFAULT LIST
In order to protect the financial interest and economic wellbeing of the exporters of U. S. grown cotton, to foster and improve international trade and to preserve the principle of the sanctity of contracts, the American Cotton Exporters Association will maintain a current list of those parties engaged in the purchase and or sale of cotton who have been reported by an exporters as being in default on an outstanding export contract and, where indicated, also have failed to honor a technical arbitration award issued by a recognized arbitral body.
Participation is open to all individuals, partnerships, companies, cooperatives and corporations engaged in the export of cotton.
The listing of a party in default is for the purpose of advising U. S. exporters of the potential business risk inherent in dealing with that party based on the documented experience of other ACEA members.
The following procedures have been adopted for determining whether a buyer or seller is in default such that the fact of that default will be circulated by the ACEA.
DEFINITION OF DEFAULT
For the purpose of the operation of this project, a party shall be deemed to be in default when:
- In the case of contracts calling for the opening of a letter or letters of credit for the benefit of the exporter, the purchaser has failed to open a letter of credit in accordance with the terms of the contract or other agreements on or prior to the last day of the shipment month; or refused to extend a L/C if requested by the exporter; or opened the L/C with insufficient time to load; or added other clauses designed to make the L/C inoperable;
- In the case of contracts made on CAD, COA, FOB, FAS, C & F and CIF terms, payment has not been received by the exporter in the ordinary and usual course of business;
- In the case of contracts calling for shipment to the exporter, the seller fails to make shipment according to the terms of the contract or other agreement on or prior to the last day of the shipment month;
- In any case where the party has definitely notified the exporter of his intention not to honor the contract.
- Notwithstanding the above, if the party has agreed in writing to submit the dispute to arbitration, to abide by the award, and to pay the expense of his arbitrator, the exporter shall not add such party to the Default List.
- An exporter will notify ACEA of the fact of a default. Any such complaint shall identify clearly the party against whom the Complaint is made (providing mailing, telex, fax and cable addresses) and the facts and reasons giving rise to the Complaint and shall include a statement by the exporter that the Complaint is wholly true and genuine, that the exporter or his agent has on file evidence that a contract was concluded with (NAME OF PARTY) and that such party has not agreed to settle the dispute by arbitration.
- ACEA will immediately contact the party alleged to be in default and request information with fifteen (15) days contrary to that provided by the exporter.
- If no response is received within the fifteen (15) day period, or if the response is patently inadequate, ACEA will add the name of that party to the Default List.
- If, within ninety (90) days after the initial complaint, the exporter has not advised the ACEA that arbitration (or legal) proceedings have been instituted, or has advised ACEA that the arbitral authority has declined to conduct a technical arbitration, ACEA will send a follow-up notice advising that it no longer has sufficient information to consider that party in default.
However, in the case the party in default has declared bankruptcy, or has gone out of the business, the time limit to initiate arbitration may be extended indefinitely by the Association upon request by the exporter.
- The exporters will advise ACEA promptly of the rendition of any arbitration award (or legal decision) and satisfaction thereof. ACEA will advise that the party is no longer in default if the arbitration (or legal proceeding) is in its favor or it has satisfied an arbitration award (or legal decision) entered against it.
ACEA will also include in its list of parties in default any party whose name is reported to it by any other recognized cotton association or organization following the above procedures for determining whether a buyer or seller is in default.
PARTIES IN DEFAULT
The attached list of parties in default contains the names of those parties who are still in default on contracts from previous cotton marketing years.
From this date, additions to and deletions from the Default List should be made to the ACEA by fax or email and such changes will be transmitted to interested parties in the manner determined most expedient by the Association’s officers.
Periodic revisions of the Default List will be issued by the ACEA Office to interested parties.
SPECIMEN FORM FOR REPORTING DEFAULT
- Exact Name of Party Complaint is Against:
- Mailing Address:
- Phone/Fax/Email Address:
- Contract Number(s):
- Number of Bales:
- Shipment Period:
- Specified Reason(s) for Reported Default:
- STATEMENT: “This complaint is wholly true and genuine. We or our agent have on file evidence that a contract was concluded with __(Name of Party)__ and that such party has not agreed to settle the dispute by arbitration.”
- Firm Name of Complainant:
- City and State:
- Name of Principal: