President International Cotton Association (ICA)
There should be no room or tolerance towards anyone who trades with a defaulter
Mr. Mohit Shah talks about the current scenario of the global cotton trade with Fibre2Fashion correspondent Mary Christine Joy.
ICA is one of the most renowned associations for cotton trading. Its rules and by-laws are followed almost everywhere in the world. It strongly promotes equitable trading practices in the world cotton market, and its rules and by-laws are in accordance with this philosophy. Almost 80 percent of the world trade of cotton is carried out under the rules and by-laws proposed by ICA.
Mr. Mohit Shah is an expert in cotton trading, and has over 20 years of experience in this field. Other than being the President of ICA, Mr. Shah is also the Director and Co-owner of Gill and Co. Pvt. Ltd. Gill and Co. Pvt. Ltd. is one of the oldest cotton companies in India. He joined the Board of Members of ICA in 2010, and has done a remarkable job in the association since then. He is a famous figure in the international cotton market.
Can you explain a bit about the role played by ICA in ethical cotton trading in the global market?
There are organisations that focus on the ethical side of cotton trading such as Fairtrade and the Better Cotton Initiative (BCI). At the ICA, our main remit is arbitration - we are the world's largest and most recognised arbitral body for the raw cotton trade. Our core principle is to promote safe trading so that contract sanctity may be preserved - essential to having a sound and sustainable cotton trade. Being a member of the ICA shows the world market that you support contract sanctity and that you want to operate in a safe trading environment.
Majority of trade in the global cotton market are carried out under the ICA rules. How does that help the cotton traders and buyers in the global market?
Most of the international cotton trade today takes place under ICA rules. The rules were developed over 170 years ago to help regulate the sale and purchase of raw cotton. They have changed with time to adapt to the trading environment, but their aim remains the same - to create a safer trading environment.
Creating a safer trading environment does not discriminate between the buyer and the seller. It's about protecting the rights of everybody in the market. Our aim at the ICA is to protect the legitimate interests of all those who trade cotton - whether they are buyers or sellers, mills or merchants.
ICA rules provide a framework to support equitable trading and promote an orderly, commercial process between buyers and sellers. Without this trading framework the market for buying and selling raw cotton would be chaotic and the associated increase in risk would be reflected in cotton prices.
You do not have to be a member of the ICA to trade under ICA Bylaws & Rules - they are designed to be applied to contracts covering the purchase and sale of cotton between any two companies (buyers and sellers), anywhere in the world. In the event of a contract dispute those companies have the right to apply for ICA arbitration. One of the many benefits of being a member of the ICA is that application for arbitration is free and members pay reduced stamping charges for awards. Any arbitration award produced by the ICA is internationally recognised and legally enforceable under the New York Convention.
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