Local textile firm brings complaint to arbitration<\/p>\n
JAKARTA (JP): Earlier this year, textile companies complained
\nthey were hit by defective cotton imports from the United States.
\nTheir claims were solid, the evidence was there and the importer
\neven admitted the inferior quality of the cotton.<\/p>\n
The Indonesian firms, however, preferred to deal with the
\nissue on a bilateral basis -- through negotiations -- and avoided
\narbitration, which they claimed would be disadvantageous to them.<\/p>\n
Observers justified this, saying that the Liverpool Cotton
\nAssociation (LCA) -- the international arbitration body for
\ncotton trade disputes -- was controlled by the seller's
\ninterests, with little influence from the buyer's side.<\/p>\n
One of the companies, PT Putra Sejati Spinning Mills Ltd.,
\nhowever, decided to \"brave\" the LCA by bringing the case to
\narbitration. Under the contract, the LCA is authorized as the
\nonly body to handle any disputes which may occur between cotton
\nsellers and buyers.<\/p>\n
Heinz Schadach, an adviser to the board of Putra Sejati, said
\nthe company was pursuing a quality arbitration for one item and a
\ntechnical arbitration for three items.<\/p>\n
\"Negotiations are currently underway, but the seller has
\nrefused to compensate (for defective cotton delivered last year),
\nalthough the samples indicate the cotton is bad and the seller
\nhas admitted to its poor quality,\" Schadach told The Jakarta Post
\nin a recent interview.<\/p>\n
The total value of Putra Sejati's claim is around US$300,000.<\/p>\n
\"It is a clear-cut case and the evidence is there ... if Putra
\nSejati does not win, there must be something wrong with the
\nsystem, and we should reconsider how to carry out cotton trade in
\na fair way,\" he said.<\/p>\n
Schadach, whose company has hired a foreign lawyer to handle
\nthe case, said that the other seven companies which complained of
\nsimilar problems should also go to arbitration, as this was not
\nthe first time they had received off-grade cotton.<\/p>\n
Chairman of the Indonesian National Board of Arbitration
\nPriyatna Abdurrasyid was not surprised at the reluctance of
\nIndonesian companies to bring the dispute to the LCA.<\/p>\n
\"Many Indonesian companies feel uneasy about moving in foreign
\nterritory and facing unfamiliar rules, which often poses
\ncommunication and cultural problems,\" he said.<\/p>\n
Priyatna said Putra Sejati's decision to hire a foreign lawyer
\nfamiliar with Liverpool laws was appropriate.<\/p>\n
He said, however, that the company would have to spend a lot
\nof money for the arbitration process, as it would have to be
\nconducted outside Indonesia.<\/p>\n
\"To make things easier, the parties in the dispute could agree
\nto arbitrate in Indonesia or in a third country such as
\nSingapore. This would be an advantage for the Indonesians, not
\nonly because it would mean a lot of money saved, but also because
\nthey would be more comfortable dealing with things in a familiar
\natmosphere,\" he said. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/local-textile-firm-brings-complaint-to-arbitration-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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