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G. Gurumurthy

COIMBATORE, Jan. 30

THE South India Mills Association (SIMA) is holding a meeting here on February 2 to discuss the issues relating to raw cotton imports.

The meeting has been arranged in view of instances of disputes that have surfaced in the transactions relating to cotton imports during last year between textile mills in the region and some cotton shippers/ their indenting agents.

According to SIMA sources, representatives of the South India Cotton Association (SICA) and dealers handling imports have also been called to express their views.

Several textile mills in the region, which imported raw cotton during last season, and the agents who facilitated the imports are caught in a string of arbitration proceedings initiated against them by the international cotton shippers following a series of payment/ quality-related disputes between them.

Though it is not known exactly how many mill buyers have got into the disputes, the number seems to be substantial going by the persistent clamour being heard within the industry on the need to evolve some system to address the issue of legal disputes involving import of cotton.

There are also instances where specific shippers kept up pressures against importers by launching claim proceedings for their `failing' to open letters of credit (LCs) for the imports they had ordered.

A section of the textile mills consuming imported cotton has been airing the views on the need to have a suitable Indian cotton contract format that adequately meets the interest of the buyers, especially to tackle quality-related disputes.

This section feels that at present bulk of the cotton being imported by the Indian consumers are bound by the Liverpool Cotton Association's (LCA) contract format as the international cotton shippers go by the LCA rule book and its arbitration clause in the event of any disputes.

SIMA and SICA are insisting that imports be brought under the purview of the Indian Arbitration Act.

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