Arbitration

In: Philosophy and Psychology

Submitted By Puseletso
Words 2118
Pages 9
FORFAITING A USER'S GUIDE
WHAT IT IS, WHO USES IT
AND WHY?
By: John F Moran, Jr.

Abstract
Italian and West German exporters have long been familiar with Forfaiting and still provide the bulk of the market. UK, Scandinavian, Spanish and French exporters are latching onto the possibilities of the technique with enthusiasm. The American and Canadians, meanwhile, have been slow to catch on (some Forfaiters think it is because they are suspicious of its simplicity coupled with a lack of complex documentation).
For people who are not using the technique, below is a concise introduction to Forfaiting using questions those new to the technique would typically ask.

What is Forfaiting?
Forfaiting is the purchase of a series of credit instruments such as drafts drawn under time letters of credit, bills of exchange, promissory notes, or other freely negotiable instruments on a "nonrecourse" basis (non-recourse means that there is no comeback on the exporter if the importer does not pay). The Forfaiter deducts interest (in the form of a discount), at an agreed rate for the full credit period covered by the notes. The debt instruments are drawn by the exporter (seller), accepted by the importer (buyer), and will bear an aval, or unconditional guarantee. The guarantee will normally be issued by the importer's bank, but some strong corporates can be accepted without a bank guarantee.
In exchange for the payment, the Forfaiter then takes over responsibility for claiming the debt from the importer. The Forfaiter either holds the notes until full maturity (as an investment), or sells them to another investor on a non-recourse basis. The holder of the notes than presents each receivable to the bank at which they are payable, as they fall due.

When should Forfait be used?
Forfaiting is used for international trade transactions. Normally, a Forfaiting house would not expect to handle…...

Similar Documents

Mediation and Arbitration

...resolve disputes through mediation and arbitration to make a mutual decision between parties who are unable to resolve issues by themselves as well as avoid high cost legal fees. Mediation and arbitration may not work all the time but with the right mediator and arbitrator, at least eighty percent of the time they are able to work out an agreement that is acceptable to both parties (Cahn & Abigail, 2007, pg. 196). Once the case is acceptable, legal action may not be needed and the parties can move forward to an agreement. Cahn & Abigail (2007) defined the role of arbitration as a neutral third party considering both sides of a dispute and makes a decision, which is more binding than that of a judge in the legal system if both parties have agreed in advance to abide by the decision (no appeal)” (pg. 195). Depending on the situation and conflict, it can be beneficial going through arbitration so all parties will be able to express their side without having a judge or jurors make a final ruling. Cahn & Abigail (2007) defined the role of mediation as a neutral third party that facilitates communication between the conflicting parties so that they may work out their own mutually acceptable agreement” (pg. 195). Conflicts can be difficult to resolve because all parties feel that their way is the right way and no other way is right. This can get out of line especially when the conflict needs to be resolved. The function of mediation and arbitration is to resolve conflicts......

Words: 577 - Pages: 3

Arbitration Clause

...The arbitration clause This clause is related to the problem of the settlement of disputes arising from the non-performance or the improper performance of international trade contracts. Generally, in all systems of law the courts of law have jurisdiction to settle these disputes, especially the court of law from the place where the headquarters of the defendant are situated. However, there are some exceptions provided by the procedural law of the states. Thus, for example, the court of law from the place where immovable goods are situated has exclusive jurisdiction to hear disputes concerning these goods. The settlement of disputes by the courts of law has some disadvantages for the merchants, as follows: 1. the period of time until the dispute is settled is very long and impedes the existence of proper commercial relations between partners; 2. the procedural legal rules (rules concerning the proceedings before the court of law) are very complicated and the parties do not know them. As a consequence, they must be assisted by lawyers before the court of law and lawyers are very expensive. Due to these disadvantages, the merchants prefer alternative ways for the settlement of disputes, such as the arbitration. The commercial arbitration represents a jurisdictional way of settling commercial disputes. It means that the hearing and the settlement of the dispute between parties is performed by a person or persons chosen or agreed to by them. The parties to a commercial......

Words: 2212 - Pages: 9

Arbitration

...Introduction to Arbitration MBA 2013, Freeport Class Arbitration is one form of Alternative Dispute Resolution (ADR), ADR (Alternative Dispute Resolution) is a commonly used term for settling disputes by mutual agreement. ADR in its wider sense includes both arbitration (as an alternative to ordinary court proceedings) as well as mediation or conciliation of disputes (in all its variations). According to one English definition: “ADR is any method of resolving an issue susceptible to normal legal process by agreement rather than by imposed binding decision.” It is means to end disputes which provide parties to a controversy with a choice other than litigation. Conciliation/mediation undoubtedly constitutes the very oldest form of resolving disputes, whether in the form of direct negotiation between the parties themselves (mostly termed “conciliation”) or with the intervention of one or more third parties as mediators (then mostly termed “mediation”). Article 6 of Indonesian Law No. 30 of 1999 explained that, dispute or difference opinion of civil cases can be resolved by the parties through alternative dispute resolution based on good faith to the exclusion of the litigation settlement in the District Court. Resolution of dispute through alternative dispute resolution opinion referred to in paragraph is solved in a direct meeting by the party in the longest time 14 (fourteen) days and the results are set forth in a written agreement. In case of dispute or difference......

Words: 773 - Pages: 4

Investment Arbitration

...flow of private international investment.” Otherwise, there are sets of rules about arbitration or conciliation. So after meeting the requirements, foreign investors can be protected efficiently according to the ICSID Convention when the States violate the agreements. Another one is the BITs and it means bilateral investment treaties. The purpose of the BITs is to make a benefit to the State and also for the benefit of an investor, so according to the BITs, the rights of the foreign investors can be protected successfully when the States violate agreements. Bibliography Anthony Connerty, Manual of International Dispute Resolution (Commonwealth Secretariat 2006) Blackaby, N. et al, Redfern and Hunter on International Arbitration– Student Version (OUP, Oxford 2009). H Street, N.W. ‘ICSID CONVENTION, REGULATIONS AND RULES’ Washington, D.C. 20433, U.S.A. <https://icsid.worldbank.org/ICSID/StaticFiles/basicdoc/CRR_English-final.pdf >accessed on 22/2/2013. Kenneth J. Vandevelde, Bilateral Investment Treaties History, Policy, and Interpretation (Mar2010) Margaret L. Moses, The Principles & Practice of International Commercial Arbitration (2nd CUP, Cambridge 2010). -------------------------------------------- [ 1 ]. Margaret L. Moses, The Principles & Practice of International Commercial Arbitration (2nd CUP, Cambridge 2012) 230 [ 2 ]. Anthony Connerty, Manual of......

Words: 407 - Pages: 2

Grievances and Arbitration

...Interview on Grievances and Arbitration at Comcast Yolanda Baskett Columbia Southern University Yolanda Baskett Professor David Moody BHR 4350 Collective Bargaining November 23, 2012 WAGE ISUES AND ECONOMIC SUPPLEMENTS Shekera Stevens is a human resource manager at Comcast Cable Company who has been employed with the company for five years. She agreed to participate in a personal interview to assist me with my Collective Bargaining research paper. When an employee has a misconduct issue at Comcast, first the employee will receive coachings which involves a one on one with the team supervisor to discuss the misconduct issue and how it could have been avoided. On the second misconduct offense the employee will receive a verbal warning. The third offense they will receive a written warning . The fourth offense they will receive a final warning and the last offense the employee will be terminated. Conflicts between employee and management will be handled by the next line supervisor in line. If any employee feels that they are not being treated fair or was fired for no reason, Comcast provides a hotline that they can contact for any feelings of unfairness or neglect. Comcast has a zero tolerance for drugs. They are a drug free establishment and if an employee is found with drugs in their system they will immediately be terminated. Drug test are also given prior to the employee receiving a job offer. If there are......

Words: 319 - Pages: 2

Binding Arbitration

...Mediation and Arbitration Agreement Dear [Name of ABC Company Employee]: Although ABC Company hopes that employment disputes with its employees will not occur, ABC believes that when these disputes do arise, it is in the mutual interest of all concerned to handle them promptly and with a minimum of disturbance to the operations of ABC's businesses and the lives of its employees. Accordingly, to provide for more expeditious resolution of certain employment-related disputes that may arise between ABC Company and its employees, ABC has instituted a mandatory mediation and arbitration procedure (the ABC Mediation and Arbitration Procedure or the Procedure) for all employees [indicate eligibility restriction, if any]. Under the Procedure, certain disputes that may arise from your employment with ABC or the termination of your employment must (after appropriate attempts to resolve your dispute internally through ABC management channels) be submitted for resolution by non-binding mediation and, if necessary, mandatory arbitration. In agreeing to submit certain employment disputes for resolution by private mediation and (if necessary) arbitration, you acknowledge that this Agreement is given in exchange for rights to which you are not otherwise entitled--namely, your employment as an ABC Company employee and the more expeditious resolution of employment disputes. In exchange for your agreement to submit these disputes to mediation and (if necessary) binding arbitration, ABC......

Words: 2734 - Pages: 11

Arbitration

...Arbitration as a mechanism for resolving disputes has an ancient history stretching back thousands of years and was primarily based upon the principles of fairness and common sense. The origins of arbitration go back to dispute settlements in Roman law, Asia and Greece and Aristotle is reported to say an arbitrator goes to the equity of the case but a judge decides strictly with the rule of law. Philip the Second, the father of Alexander the Great, was an arbitrator who used this method to settle territorial disputes with the Southern States of Greece dated to be around 337 BC In England the use of arbitration is older than the common law system upon which English law is based and was a functioning process in use to settle commercial disputes between merchants on market days in the Middle Ages. The Guilds of London and the “The Great Twelve Livery Companies” that date back to the 14th century demonstrated that this practice was of a great importance to resolve many disagreements that were brought within their halls. The English Courts did however perceive arbitration as a competitor to their authority and in particular as a disruption to the revenue that flowed into them as Judges were paid on the number of cases that they had to deal with. The Courts were also suspicious as to the standards being applied in these arbitrations at that time. It was not until the 20th Century that the courts began to recognise the decisions of arbitrators and the close control by the......

Words: 2080 - Pages: 9

Arbitration Act

...dispute resolving mechanism. That’s why “Arbitration Act” was provided with a view to give speedy justice to the people and also to avoid unnecessary court case expenses. It is an informal dispute settlement mechanism. Bangladesh has recently enacted a new arbitration law, known as “The Arbitration Act, 2001. The Act came into force on April 10, 2001. The Act has repealed The Arbitration (Protocol and Convention) Act, 1937 and The Arbitration Act, 1940. With this new enactment Bangladesh has kept pace with the recent trends in the field of international arbitration in the rest of the world. According to the topic of this assignment, I also agree that although arbitration was introduced for settling dispute but it is not serving it purpose entirely and precisely. Now I’m going to discuss about the reasons which are making difficulty for arbitration to serve its purpose completely. Meaning of Arbitration: Before discussing about the ineffectuality’s of arbitration, first we should briefly know what Arbitration really means. The word “Arbitration” means mediation, negotiation, adjudication etc. This means settlement of arguments, disagreement, and clash between two parties. It is a process in which a disagreement between two or more parties is resolved by impartial individuals, called arbitrators, in order to avoid costly and lengthy court case or legal actions. Arbitration is the most traditional form of dispute resolution. Arbitration is a binding procedure. It......

Words: 2251 - Pages: 10

International Commercial Arbitration and the Developing Countries

...International commercial arbitration is an alternative dispute resolution mechanism of solving disputes arises out of international trade and commerce. It has been vastly developed as one of the most efficient and preferable method of commercial dispute resolution internationally and resulting in the involvement of parties from around the globe that come from different legal systems. Now a day’s developing countries institutions are increasingly entering the IP market, and multiparty, multinational IP relationships are becoming more common, and even essential to socio-economic development. Through transactions involving these relationships scientific, technical, entrepreneurial, creative, and traditional knowledge is exchanged. This leads to increase a large number and type of international disputes. For resolving these disputes the arbitration mechanism is adopted as it resolve disputes (commercial or political) quickly through practical solutions rather than relying on the inflexible and lengthy processes of national litigation that the existing systems had to offer. In modern times, with the rapid growth and expansion of international business transactions Commercial arbitration is an efficacious alternative dispute resolution technique in business community. Though, it is a private, cost-effective and prompt method of resolving cross-border disputes, which makes the parties to opt for this mechanism over domestic litigation. But at the same time it is not a “neutral”...

Words: 11454 - Pages: 46

Arbitration

...Arbitration Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts. The parties to a dispute refer it to arbitration by one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), and agree to be bound by the arbitration decision (the "award"). A third party reviews the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in the courts.[1] Other forms of ADR include mediation[2] (a form of settlement negotiation facilitated by a neutral third party) and non-binding resolution by experts. Arbitration is often used for the resolution of commercial disputes, particularly in the context of international commercial transactions. The use of arbitration is also frequently employed in consumer and employment matters, where arbitration may be mandated by the terms of employment or commercial contracts. Arbitration can be either voluntary or mandatory (although mandatory arbitration can only come from a statute or from a contract that is voluntarily entered into, where the parties agree to hold all existing or future disputes to arbitration, without necessarily knowing, specifically, what disputes will ever occur) and can be either binding or non-binding. Non-binding arbitration is similar to mediation in that a decision can not be imposed on the parties. However, the principal distinction is that whereas a mediator will try to help the parties find a......

Words: 4238 - Pages: 17

Arbitration in India

...India) (Accredited by NAAC with ‘A’ Grade) ------------------------------------------------- Study of arbitration, dispute resolution and mitigation practices in Indian Infrastructure Sector MBA – Infrastructure Management Batch 2013-15 Semester III Thesis Guide: Dr. Ajit Patwardhan Prepared by: Name | Roll No. | Jasjeet Singh Gill | 2013D02 | Subhashini N. | 2013D17 | Acknowledgement We consider it our privilege to express a few words of gratitude and respect to all those who contributed and wished for the successful completion of our project. We express our deep felt gratitude to Prof. (Dr.) Pratima Sheorey - Director, SCMHRD and college management for providing us with all facilities for making this endeavour possible. We acknowledge with a deep sense of gratitude, the constant help and guidance provided by our thesis guide and faculty Prof. (Dr.) Ajit Patwardhan at all stages of our project work. He has been an eternal source of inspiration and knowledge, without him, this thesis, was impossible. We would like to express our thanks in no less measure to Prof. Vasundhara Sen for her constant help. Our sincere thanks to our friends and all the people who directly or indirectly helped us, without which completing the course of this study would have been difficult. Certificate This is to certify that the project entitled “Study of arbitration, dispute resolution and mitigation practices in Indian Infrastructure Sector” is the bonafide......

Words: 40958 - Pages: 164

Arbitration in Nepal

... Dispute Resolution: Arbitration Law in Nepal Anamol Bisht Kathmandu University School of Management In an event of the breach of any contract, legal remedy should be provided to the parties that are involved in the agreement. However, instead of going directly to the court of law, there are specific remedies that serve as an alternative dispute resolution and one such alternative is arbitration. In arbitration, an arbitrator (a neutral third party or experts) renders a decision based on the disputes they are presented with. Here, the third party’s decision is legally binding, as it is an alternative dispute resolution (ADR) to the judicial system of the nation. Except for a few special cases, the court of law will reject any disputes between contracting parties and refer to the parties to arbitration. This is why almost all contracts and agreements have arbitration clauses mentioned in so it has to be a collateral to the main contract so as not to end with the contract itself. “The other term of the contract fall but the arbitration clause survives” (Pathak, 2010). The procedures to arbitration are stringent laws that pertain to how justice should be served in case of a contractual breach. Since courts alone couldn’t resolve the question of arbitration, there had to be a law that referred to the powers invested to the parties as private legislation and the ousting of the jurisdiction of the court. Hence, the Arbitration Act, 2055 (1999) was enacted to provide such......

Words: 1632 - Pages: 7

Arbitration

...To: Maria From: Sarah Farrell Date: March 1st 2015 Dear Maria, I did some research regarding what we had discussed earlier and found two cases, that direct me on whether or not you should be adding in the arbitration clause. The first case was CB Richard Ellis, INC. v. American Envtl. Waste Mgmt. 1998 U.S. Dist. LEXIS 20064 (E.D.N.Y Dec. 4, 1998), the New York courts attitudes to arbitration and mediation clauses where the plaintiff contracted with the defendants company for waste removal services under a written contract with general mediation clause governing “any dispute”, claim or controversy arising out of or relating to this agreement or the work when the plaintiff sued for fraud, unjust enrichment, and breach of contract for overbilling and paying kickbacks, the defendant moved to stay the proceeding and compel mediation. The court found the Federal Arbitration Act applied to mediation under the parties’ contract as a process that would “settle” the controversy. The mediation clause was broadly worded, had no exclusions, and covered all disputes relating to the contract. It had a strong presumption favoring in arbitration and governed disputes that only touched the matters of the agreement. In the second case, Dean Witter Reynolds v. Byrd, 470 U.S. 213, 218, 84 L. Ed. 2d 158, 105 S. Ct. 1238 (1985). In 1981, respondent invested $160,000 in securities through petitioner broker-dealer. The parties had a written agreement to arbitrate any disputes that...

Words: 429 - Pages: 2

Arbitration

...breaking judgment regarding the future implications of foreign award and foreign arbitration vis a vis jurisdiction of Indian Courts | | |was passed on 6 September 2012 by the Constitutional Bench of the Hon'ble Supreme Court comprising Hon'ble Chief Justice J.N. Patel, Justice | | |Surinder Singh Nijjar, Justice D.K. Jain, Justice Mrs. Ranjana Desai, Justice Jagdish Singh Khehar. This landmark judgment passed in Civil | | |Appeal No. 7019 of 2005 (Bharat Aluminium Co. vs. Kaiser Aluminium Technical Service, Inc.) along with 7 other Appeals lays down a new | | |foundation in India in respect of foreign arbitrations and foreign awards passed in respect thereof. | | |The Indian Arbitration Act, 1996 ("said Act") is divided into four Parts with Part I dealing with arbitration held in India and Part II | | |dealing with foreign awards. For the purposes of the above mentioned landmark judgment passed on 6 September 2012, we are concerned with Part | | |I and Part II of the said Act. | | |Previous decisions of the Supreme Court: | | |Section 2(2) of Part I of the said Act provides that "this Part shall apply where the place of arbitration is in India", It is pertinent to | | |note that Part I of the......

Words: 1368 - Pages: 6

Mock Arbitration

...Mock Arbitration In the case of Kevin Hire vs Management, the union and employee would like to have Mr. Kevin Hire’s suspension from work discharged, on the account that it did not comply with the disciplinary procedures in his contract. The management however, believes that the disciplinary action taken was applicable to Mr. Hire’s actions in the workplace. The employees’ supervisor, Olive Martinez, suspended the said employee after he refused a lawful and direct order to transport a post-surgery patient from a gurney to a bed. Instead, Mr. Hire chose to clock out and go home despite being warned of the consequences. The hospital management feels that he not only knowingly refused to do part of his job but he also completely neglected the patient on a gurney in the hallway after surgery. Therefore, in the management’s opinion the suspension of Kevin Hire was a fair disciplinary action especially since this is not his first time acting unprofessional in the workplace. In conclusion, the management’s main views on the situation are: 1)The employee has been verbally warned and noted by his supervisor for other minor unprofessional workplace behaviors such as taking extended breaks. Although, management does acknowledge that there are no written documentations of said warnings. 2)Management has never received any documentation or doctor’s note about grievance's back injury and therefore has no evident reason or obligation to accommodate with him or to believe they are......

Words: 1891 - Pages: 8