The Southern Mills Rules were promulgated in 1925 by the American Cotton Manufacturers Association and the American Cotton Ship­pers Association as a guide to proper and fair procedure in the conduct of commercial trading relations between their members. These rules also apply to all who voluntarily choose to include them as the basis of their contract.

Concerning disputes, it is the opinion of the two groups that when two parties to a contract have entered therein with full knowledge of the requirements thereof — knowing that disinterested Boards have been set up to settle any differences that may occur between them — then it is the duty of each party to the contract to submit any dispute to these Boards.

Each year the National Council of Textile Organizations (NCTO), the American Cotton Shippers Association (ACSA), and Amcot committees review the Rules of the Cotton States Arbitration Board and Southern Mill Rules. Amendments or new rules are carefully considered to assure that trade requirements of mills and shippers are satisfied. Changes adopted by the Annual Joint Meeting of ACSA/Amcot and NCTO are referred to the respective Boards of Directors, and after approval, are referred to the two memberships and then incorporated in the rule books.

Section XI “Arbitration,” Rule 38 of the South­ern Mill Rules, authorizes the arbitration of quality disputes between shippers and mills under the rules of the Cotton States Arbitration Board. The CSAB is supervised by a four-man Executive Committee composed of a representative and alternate appointed by the Presidents of the National Council of Textile Organizations and the American Cotton Shippers Association. The Executive Committee shall make periodic or annual reports to the annual ACSA/Amcot-NCTO Joint Meeting.

In 1972, the CSAB was moved from Atlanta, Georgia to Memphis, Tennessee, for economic reasons. The Executive Committee made arrangements with the Board of Supervising Cotton Examiners (BSCE), now the Quality Control Section, of the U.S. Department of Agriculture in Memphis, to perform arbitration services for the industry.

A schedule of fees for the various services offered by the CSAB are conveyed by the Executive Committee to the respective memberships, usually on an annual basis.

Submission of samples, conduct of the arbitration, reviews and fees are contained in the rule book of the CSAB, contained elsewhere in this booklet.

Section XI “Arbitration,” Rule 39 of the Southern Mill Rules created the Board of Appeals — sometimes referred to as the “Southeastern Appeal Board” — to consider disputes between buyer and seller as to:

  • whether a shipment or shipments con­form to the terms of sale;
  • the amount of any allowances;
  • the interpretation of purchase and sales contracts made under Southern Mill Rules, or
  • the interpretation of any section of the Southern Mill Rules.

The Board of Appeals is composed of one representative each appointed by the Presidents of NCTO and ACSA/Amcot. They are selected for their knowledge of the Southern Mill Rules, experi­ence in their respective industry and their reputation for integrity and fairness. They serve without compensation, donating their services for the convenience of members of the three Associations.

In the event that a member of the Board of Appeals is involved in a controversy submitted for arbitration, or feels he has a bias concerning the issue, that member shall remove himself from that particular case. The organization, whose representative is so involved, shall immediately appoint another representative for that case only. Should the Board be unable to reach a unanimous decision in any case, its members shall mutually agree upon a third party to act with them and his decision shall be final. The Board shall appoint a Secretary to assist them.

  • render decisions only on bona fide disputes; hypothetical questions will not be considered;
  • reserve the privilege of refusing action on any dispute submitted if it feels the case at point has disagreements not involving SMR or it does not have sufficient evidence to properly judge the issues;
  • in addition to disputes between a mill and a shipper, consider disputes between two shippers or two mills, when either party is a member of NCTO or ACSA/Amcot;
  • not consider counterclaims for contracts that have been completed;
  • ask either of the parties for additional information or clarification of statements made in their briefs;
  • consider cases on an ex parte basis if the other party, after having received written notice by Registered Mail, Return Receipt Requested, states that he will not submit his side of the dispute or fails to respond within fifteen (15) days, or if either party to the case refuses to remit the arbitration fee or refuses to state in writing that they will abide by the decision rendered by the Board;
  • order the losing party to pay the amount of the judgment due the other party within five business days from the date of the issuance of the arbitration award;
  • not consider any submission for arbitration from a party who has failed to pay a judgment previously rendered against it by the Board.

The party to the dispute initiating the arbitration shall submit a letter to the appropriate Secretary as designated by the NCTO or ACSA/Amcot requesting arbitration of the dispute with the opposing party, stating in writing that they will abide by the decision of the Board of Appeals and provide a copy of the contract subject to the SMR, together with the original and three copies of a concise brief outlining the points in the dispute.

NCTO Cotton Comm. 1776 I Street, NW, Suite 900
Secretary: Washington, DC 20036-3700

ACSA/Amcot Domestic Mills William E. May
Secretary: 88 Union Ave., Suite #1204
Memphis, TN 38103

  • In order to avoid delay, the party initiating the arbitration shall furnish the opposing party with a copy of his letter to the Secretary together with a copy of his brief. Thereafter, each party shall furnish the opposing party with a copy of any Supplemental Brief in response that is submitted to the designated Secretary for the Board’s consideration.
  • Each party to the dispute shall prepare concise briefs detailing the points at issue Copies of the contract, subject to the SMR, and other pertinent supporting evidence shall be part of each party’s brief, and each party shall signify in their letter to the Secretary that they will abide by the decision rendered by the Board of Appeals and pay the judgment within five business days from the date of the issuance of the arbitration award.
  • The opposing party shall have fifteen (15) calendar days from the date of receipt of the initiating party’s original brief in which to submit a brief in response. The date of receipt shall be no later than the date in which the appropriate ACSA/Amcot or NCTO Secretary receives the submission.
  • No more than one Supplemental Brief or response shall be submitted for consideration by the Board. The party initiating the arbitration shall have ten (10) calendar days to respond to the Original Brief of the opposing party and the opposing party shall have ten (10) calendar days to respond to the Supplemental Brief or response submitted by the party initiating the arbitration.
  • To ensure an unbiased decision the disclosure of the identity of the parties is not permitted. Accordingly, SMR disputes are submitted in brief form and no oral testimony is permitted. The identities of the parties shall be withheld from the arbitrators adjudicating the dispute through the redaction of the identity of the parties by the designated Secretary. Therefore, the Original and Supplemental Briefs and/or any accompanying affidavits or any information requested by the Board, and provided by the parties in response to such a request, shall be the sole determinant for any decision rendered
  • Members of the NCTO, ACSA, or Amcot shall include a check for $1,000 with his brief to cover cost of the arbitration. The winner of the arbitration will have his check returned to him.
  • NCTO and ACSA/Amcot members requesting an ex parte decision shall deposit $1,000 with the appropriate Secretary. If the opposing party has a decision rendered against him, he shall be assessed $1,000. If this amount is collected, the original deposit will be refunded to the party requesting the ex parte arbitration.
  • Non-members of NCTO and ACSA/Amcot, or attorneys submitting cases on behalf of such non-member parties, shall incur a charge of $2,000 per case or the actual expenses, whichever is higher. A check for $2,000 must be included with the submission of the Original Brief.


  • Upon receipt of a request for arbitration, in proper form as outlined above, the Secretary to the Board of Appeals shall:
  • Determine whether the party has failed to pay a judgment rendered against it by the Board;
  • remove all clues as to the identity of the parties at interest;
  • number cases on a consecutive basis which number shall follow throughout;
  • notify the party who has failed to submit his brief by Registered Mail, Return Receipt Requested, that his response must be received within fifteen (15) days;
  • refer briefs of the contending parties to the Board of Appeals or, if one of the parties has failed to respond as indicated above, submit the case on an ex parte basis.


  • receive the briefs of the parties or, if the case is submitted on an ex parte basis, consider the brief of the party initiating the arbitration;
  • carefully consider all briefs submitted and, if additional information is needed, request the Secretary to secure it from the appropriate party;
  • if in agreement, render a unanimous decision, which shall be final;
  • if unable to agree, mutually agree upon a third party whose decision shall be final;
  • in decisions involving a third representative (or umpire), the dissenting member of the Board of Appeals has the right to state his reasons for disagreeing with the majority opinion.
  • Should either party seek to have judgment entered upon the award pursuant to the 9USC §9, they may do so by applying to a court of competent jurisdiction located in Memphis, Tennessee.


  • upon receipt of the Decision of the Board of Ap­peals, promptly mail to all parties in the dispute a copy of such Decision, together with a copy of all of the briefs submitted;
  • promptly mail a copy of the Decision to the Secretaries of the National Council of Textile Organizations, the American Cotton Shippers Association, and Amcot for publication to
  • their respective memberships;
  • add the Decision and Briefs to the permanent record of cases of the Board of Appeals.

Non-Payment of Arbitration Awards:
Should the losing party fail to pay the judgment rendered by the Board of Appeals within 30 days following the publication of the award, the winning party shall notify the Secretary, along with notice to the losing party, and the Secretary shall publish the failure of the losing party to pay such award on a list that shall be maintained by the Secretary. The list of parties who have failed to honor an award issued by the Board of Appeals shall be circulated with current updates to the members of the NCTO, ACSA, and Amcot.

Those having occasion to use the services of the Cotton States Arbitration Board or the Board of Appeals will facilitate the handling of their cases by carefully complying with the conditions and procedures enumerated above.