A recent Zoom Meeting of the Commodity Arbitration
The club discussed whether there was a divide between trade arbitrators + lawyer arbitrators. The two groups come from different starting points.
Traders have spent a lifetime in the Commodity Trade; Lawyers have spent a lifetime in law firms. Do the different work experiences lead to different approaches to Arbitration? When trade arbitrators sit alongside lawyer arbitrators, do they have the same or contrasting mindsets towards their role and function as arbitrators? Is there unity of purpose + approach or is there a division + difference?
The starting point is that commodity arbitration is a legal process created by the trade to resolve commercial differences. Commodity arbitration embraces the law + the trade. The trade – which oversees enormous volumes of international trade in grains, feeding stuff, technical + edible oils – established its own arbitration procedure which springs from informal dispute resolution created by travelling caravans on the Silk Road in antiquity who argued over spices, silk and grains. The caravans created their own informal problem-solving mechanism that led – eventually – to arbitration. The arbitrators were traders called upon by fellow traders to decide who was right and who was wrong. Today’s GAFTA came into being in 1971 as a merger of the Cattle and Corn Associations.
The arbitrators have always been drawn from traders + back office administrators in the commodity companies. They know the trade + have experienced the rhythms, tensions and norms of conduct in the trade. They are best placed to be arbitrators. Aren’t they?