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CHAPTER I. GENERAL RULES

Article 1. Rules of General Application
RULE 1: Applicability Of These Rules
.
RULE 2: Commodities Of United States Origin Intended.
RULE 3: Delivery F.0.B. Intended.
RULE 4: Risks In Transit.
RULE 5: Payment.
RULE 6: Refunds.
RULE 7: Refusal or Failure of Buyer to Pay Draft or Invoice.
RULE 8: Failure to Pay Amount Due.
RULE 9: Deposits.
RULE 10: Maturity Of Commercial Paper.
RULE 11: Misbranding And Adulteration.
RULE 12: Saturdays, Sundays and Legal Holidays Excepted.
RULE 13: Seller Must Equalize Freight Rates and Transit Privileges.
RULE 14: Demurrage and/or Additional Railroad Charges on Account of Non-Arrival of Documents.
RULE 15: Changes In Transportation Rates.
RULE 16: Changes In Tax Rates.
RULE 17: Force Majeure.
RULE 18: Bankruptcy or Insolvency.

Article 2. Definition of Words and Terms
RULE 25: A Ton.
RULE 26: Season.
RULE 27: Season's Output.
RULE 28: Shipping Terms.
RULE 29: Telegrams.
RULE 30: Commodities.
RULE 31: Person or Party.
RULE 32: Trading Terms.

Article 3. Adjustments and Variations
RULE 40: Tender Of Better Grade.
RULE 41: Overweights Or Underweights.

Article 4. Remedies for Breach of Contract
RULE 50: Options To Party Claiming Breach Of Contract.
RULE 51: Taking A Commodity In At The Market Price.
RULE 52: Purchases Or Sales For Account Of Whom It May Concern.
RULE 53: Methods Of Fixing Damages Exclusive.
Article 5. Brokers
RULE 60: Confirmation, Errors and Discrepancies.
RULE 61: Brokers Contract Binding.
RULE 62: Broker's Fees.

Article 6. Weighing and Inspecting
RULE 65: Weighers & Inspectors.
RULE 66: Who Shall Weigh And Sample.
RULE 67: Official Samples.
RULE 68: Sampling and Weighing Procedure.
RULE 69: Failure Of Seller To Arrange Inspection.
RULE 70: Weight Certificates.
RULE 71: Sampling Certificates.
RULE 72: Weighing and Sampling Expenses.
RULE 73: Railroad And Truck Scales.

Article 7. Arbitration
RULE 80: Agreement To Arbitrate.
RULE 81: Standard Form Of Agreement For Arbitration.
RULE 82: Duties Of Arbitration Committee.
RULE 83: Powers And Duties Of The Secretary.
RULE 84: Arbitration Procedure.
RULE 85: Appearance And Evidence Before Arbitration Committees.
RULE 86: Handling Samples Submitted For Arbitration Purposes.
RULE 87: Rehearing Before Arbitration Committee.
RULE 89: Ex Parte Arbitration.
RULE 91: Arbitration Fees.
RULE 92: Notice Of Claims And Resignations Pending Arbitration.
RULE 93: Arbitration Between Members And Non-Members.
RULE 94: Arbitration Between Non-Members.

Article 8. Chemists
RULE 100: Official Methods of Analysis.
RULE 101: Analyses for Settlement Purposes.
RULE 103: Chemists' Fees.

Article 1. Rules of General Application

RULE 1: Applicability Of These Rules.

On and after August 1, 2012 these Rules shall apply to and be considered a part of all contracts between members of the National Cottonseed Products Association for the purchase or sale of any of the commodities herein referred to, and every applicable provision of these Rules shall be read into every such contract whether made directly or through a broker, as if set out at length therein and signed by the parties, unless otherwise specified to the contrary. Rules in this Chapter apply to all contracts; however, the provisions of Rules in other Domestic or Export chapters take precedence over the General Rules in cases where there is a conflict in working or interpretation.

Members may make contracts with non-members, subject to these Rules, for the purchase or sale of the commodities herein referred to. Such contracts shall be subject to the limitation upon arbitration privileges set forth in Rule 93.

If contracts for commodities herein referred to include terms or conditions not expressly provided for in these Rules, the arbitration privileges of the Association shall be limited to those provisions of such contracts that conform to these Rules.

RULE 2: Commodities Of United States Origin Intended. 

Unless specified to the contrary, all contracts made under these Rules contemplate delivery of commodities either produced in the United States or manufactured in the United States, regardless of the origin of the raw material.

RULE 3: Delivery F.0.B. Intended.

Unless specified to the contrary, all offers and acceptances shall be understood as intended f.o.b. point of shipment, and any transit privileges shall follow shipment through, all benefits of transit privileges belonging to the buyer.

RULE 4: Risks In Transit.

Sec. 1. Except as provided in this Rule, and in Rules 233, 283 and 323, on all contracts for the purchase or sale of commodities made under these Rules whether sold f.o.b. point of shipment, c.a.f., or delivered, seller guarantees weight and quality, as determined by the Rules specifically applicable to each commodity, at first United State or Canadian destination, when received in the original package if shipped l.c.l., or in the original tank car in good order if shipped carload; provided seller will not be responsible for loss or damage in transit caused by the carrier or inevitable accident, except on sales made on a delivered basis or shipped in seller's tank cars, in which case all risks in transit belong to seller. Seller will be responsible for loss in transit of commodities shipped in tank cars if seller has failed to comply with instructions regarding loading of tank cars, as outlined in Rule 214. The provisions of this section shall also apply on shipments ordered to a reconsignment point and forwarded to United States or Canadian destination, except seller shall not be responsible for condition at final destination unless shipments are ordered forward from such reconsignment point within 48 hours after arrival, and in no case shall seller be responsible if a second reconsignment or diversion is made.

Sec. 2. Seller's responsibility for weight and physical condition of commodities shall cease when loaded on trucks furnished by the buyer. In the case of commodities sold on a delivered basis or shipped in seller's trucks, weight and quality are guaranteed at destination by the seller.

Sec. 3 A specific, assigned load number shall accompany each carload and/or truckload. Name of shipping company, phone number and driver's signature shall be included on each load picked up at origin. (Sec. 3 added 5-21-2014)

RULE 5: Payment.

Unless otherwise specified in the contract or in these Rules, all sales shall be for cash. Payment shall be made (1) upon delivery of invoice with bill of lading, signed railroad ticket or truck receipt attached, showing delivery of commodities to carrier in good order or (2) by demand draft free of exchange to buyer with bill of lading or truck receipt attached, showing delivery of commodities to carrier in good order. The foregoing provisions do not apply to cottonseed purchased by mills from growers or gins, payment for which shall be made promptly upon its arrival at destination.

Seller reserves the right to alter the terms of payment if in his judgment the financial responsibility of the Buyer does not warrant shipment on terms originally stated in contract.

RULE 6: Refunds. 

If a commodity at destination is shown to be of rejectable quality, seller shall immediately refund to buyer all of the purchase money that may have been paid. Seller shall likewise make a pro rata refund for short weights, except on contracts c.a.f. or f.o.b. point of shipment, when such shortage in weight is caused by the carrier or accident in transit.

RULE 7: Refusal or Failure of Buyer to Pay Draft or Invoice. 

When a commodity is shipped and a draft properly drawn, with documents attached, buyer shall pay such draft on presentation. If payment is to be made upon delivery of an invoice, buyer shall pay such invoice in accordance with the terms thereon and with those contained in the contract. If buyer refuse or fails to pay a properly drawn draft or invoice, seller may cancel any undelivered balance of the contract, including the shipment covered by the unpaid draft or invoice. If the seller so elects to cancel, he shall follow the requirements of Rules 50, 51, 52, and 53.

RULE 8: Failure to Pay Amount Due. 

Sec. 1. Provided no arbitration is pending, any amount owed by seller or buyer, in the form of a premium, discount, or weight claim, shall be payable by the buyer or seller within thirty days after receipt of statement of the amount due.

Amounts due either seller or buyer claiming breach of contract shall be payable within thirty days after the claimant has taken the appropriate action required by Rules 50, 51, and 52. 

Sec. 2. Failure of buyer or seller to pay an amount due, in accordance with Sec. I of this Rule, shall give the creditor the right to charge the debtor a penalty of two percent of the amount due for each month or fraction thereof beyond the thirty-day limit set forth in Sec. 1.

Sec. 3. If any amount is not paid at its due date on demand and if no arbitration proceeding is pending, the creditor may notify the President of the Association who shall follow the procedure which is established in Rule 90 covering failure to comply with an arbitration award.

RULE 9: Deposits. 

Whenever, under these Rules, any sum is required as a payment or a deposit, it is understood that such payment or deposit shall be made in cash or bank exchange.

RULE 10: Maturity Of Commercial Paper. 

If the day of maturity falls upon Sunday or a legal holiday, the instrument is payable on the next business day.

RULE 11: Misbranding And Adulteration. 

Any member of this Association who delivers or attempts to deliver mixed or adulterated commodities, except as such, and with full and explicit statement to this effect, fully and accurately describing the commodities, or who willfully and deliberately brands or tags any commodity with the intention to defraud, claiming or indicating a quality or grade not warranted by the commodities themselves, shall be guilty of an offense against the dignity and character of this Association. Any buyer who is a member of this Association may complain of such offense to the Board of Directors, who shall promptly summon before them the party accused, and his accuser, give the charge full investigation and, if established, shall dismiss the offender from membership in the Association. When such action is taken, the President and Secretary shall notify the members of the Association, as provided in Rule 90.

RULE 12: Saturdays, Sundays and Legal Holidays Excepted. 

Whenever, under these rules, a given number of days or hours are allowed either seller or buyer for carrying out the terms of any contract or for complying with these Rules, it shall be understood, unless otherwise specified, that Saturdays, Sundays and legal holidays are excepted. For purposes of this Rule, legal holidays shall be those days which have been designated as such by a unit of government and which are generally observed as holidays by the business community at the location where one or more of these Rules are being applied.

RULE 13: Seller Must Equalize Freight Rates and Transit Privileges. 

In contracts specifying grade, it is understood that the seller has the right to ship from any mill point carrying no greater freight rate and having equal milling in transit privileges, and if shipped from a point carrying a greater freight rate to point of instructed destination than from he origin mill specified in contract, and not having equal milling in transit privileges, seller must equalize freight rates and transit privileges. This Rule shall apply where no brand or mill's make is specified at the time of sale. The name of the town where more than one mill is located shall not be taken as constituting the make of any particular mill unless name of mill is given.

RULE 14: Demurrage and/or Additional Railroad Charges on Account of Non-Arrival of Documents. 

If unloading of shipments is delayed on account of the non-arrival of documents necessary to permit such unloading, claim for demurrage and/or additional railroad charges accruing shall be made upon the last seller, without reference to previous hands through which the transaction may have passed. In like manner, each party paying the demurrage and/or additional railroad charges is entitled to reimbursement from his supplier for all accrued demurrage and/or additional railroad charges, except such as he himself caused.

RULE 15: Changes In Transportation Rates. 

Sec. 1. When commodities of United States manufacture, or imported commodities which are warehoused in the United States at the time of the ;ale are sold for domestic shipment within the United States, changes in the applicable published transportation rates or taxes on transportation included in the contract price shall be for the account of buyer.

Sec. 2. When commodities of United States manufacture, or imported commodities which are warehoused in the United States at the time of the sale are sold for export from the United States, changes in the applicable published transportation rates or taxes on transportation included in the contract price shall be for the account of seller.

Sec. 3. When commodities manufactured outside of the United States which are not within the United States at the time of sale are sold, changes n the applicable published transportation rates or taxes on transportation included in the contract price shall be for account of seller. Note: F.0.B. steamer and F.A.S. sales, as well as C.&F., C.A.F. and C.I.F. sales to named destinations outside of the continental United States hall automatically be considered export sales. Sales made F.O.B. cars at port cities shall be considered as domestic sales unless otherwise specified or export in the contract.

RULE 16: Changes In Tax Rates. 

Sec. 1. When commodities of United States manufacture, or imported commodities which are warehoused in the United States at the time of the sale are sold for domestic shipment within the United States, any increase or decrease in United States governmental sales or excise taxes applicable to the manufacture or sale of such commodities included in the contract price shall be for the account of buyer.

Sec. 2. When commodities of United States manufacture, or imported commodities which are warehoused in the United States at the time of the sale are sold for export from the United States, any increase or decrease in United States governmental sales or excise taxes, or export taxes, applicable to the manufacture, sale or export of such commodities included in the contract price, shall be for the account of seller.

Sec. 3. When commodities manufactured outside of the United States which are not within the United States at the time of sale are sold, any increase or decrease in governmental (United States or any other Government) sales or excise taxes, import duties or export duties, applicable to the manufacture, sale, import or export of such commodities included in the contract price, shall be for account of seller. Note: F.O.B. steamer and F.A.S. sales, as well as C.&F., C.A.F. and C.I.F. sales to named destinations outside of the continental United States shall automatically be considered export sales. Sales made F.O.B. cars at port cities shall be considered as domestic sales unless otherwise specified for export in the contract.

RULE 17: Force Majeure. 

Sec. 1. Conditions. If performance of the obligations of a party to an existing contract made under these Rules is obstructed or prevented during the contract period by any act of God, fire, flood, wind, explosion, war, embargo, civil commotion, strike, sabotage, law or other act of government, which is not due to said party's own act(s) or negligence, the time for performance of the contract may be extended.

Sec. 2. Notice and Proof. The party who claims an extension (designated the disabled party) must, within two (2) business days of the disabling event notify the other contracting party of his intention. Within seven (7) calendar days of receiving such notice, the latter party may request proof of the disability and evidence that the disabled party has exerted his best efforts to meet the terms of the contract. The disabled party has five (5) calendar days to respond.

This Rule may not be applied where commodities have been delivered to a carrier prior to receipt of notice of the disabling event. in any case where the parties cannot agree that the Rule is applicable, either party may file for arbitration in accordance with Rule 84.

Sec. 3. Duration. The extension permitted under this Rule is limited o the duration of the disability or to 30 calendar days from the date said disability occurs, whichever occurs first. If the disability ceases prior to the expiration of the thirty calendar day period, the disabled party shall immediately notify the other party to the contract and the extension shall at that time be terminated.

The party who claimed the extension shall then give preference to those contracts that existed on the date the disability began and shall prorate shipments or receipts equitably among them. A party who was in default prior to the date of the disability shall not be entitled to preference or proration.

In the case of contracts which call for performance to begin after the 30 calendar day extension has expired, a party still disabled may claim an extension, limited as above, beginning on the first day of such contract period.

Sec. 4 Second Party Disability. If a party's claim of contract extension places the other party in a position. where he cannot meet his won contract obligations, he may claim a similar extension in accordance with Sections 2 and 3 of this Rule.

Sec. 5. Partial Disability. If a party is only partially disabled by one of the causes listed in Sec. I of this Rule and claims an extension of contract(s), he shall prorate deliveries or receipts equitably among all contracts existing on the date the disability began and shall fulfill such contracts prior to any made after that date.

Sec. 6. Termination. If, at the termination of an extension period, (1) the disabled party has not notified the other party that the disability has ceased and (2) the parties have reached no agreement and (3) no arbitration is pending, the party not disabled may cancel the contract. If he does so, the difference between contract price and market price, at the close of business on the day the extension terminates, shall be paid by buyer to seller if the market price is lower and by seller to buyer if the market price is higher, regardless of whether buyer or seller has claimed the extension.

RULE 18: Bankruptcy or Insolvency. 

If prior to the delivery of a commodity or commodities contracted for under these Rules, either party shall be declared bankrupt or become insolvent, the other party shall have the option of canceling the contract and may establish a claim against the other party, for any loss incurred, by proceeding in accordance with Rules 50, 51, and 52.

Article 2. Definition of Words and Terms

RULE 25: A Ton. 

Unless otherwise specified, a ton shall be 2,000 pounds. If contracts specify metric tons or long tons, a metric ton shall contain 2,204.6 pounds and a long ton shall contain 2,240 pounds.

RULE 26: Season. 

Season, as used in these Rules, means the period from August 1st to the following July 31st, both dates included.

RULE 27: Season's Output. 

Season's output means the total quantity of any specified commodity which a seller produces during a season.

When a contract is made for a season's output or the balance of a season's output of a specified commodity, with no estimated quantity being stated, seller must ship and buyer must receive and pay for all of such commodity that seller produces from date of contract to the end of the season. When an estimated quantity is stated in the contract and seller does not produce that quantity, 90 per cent of the estimated quantity will fulfill the contract. To the extent that seller's production exceeds the estimated quantity, buyer may demand and seller must ship, or may ship whether demanded or not, up to 110 per cent of the estimated quantity. If seller should close his mill and sell his accumulation of seed, buyer may demand the quantity of the commodity that the seed so sold would have produced.

RULE 28: Shipping Terms. 

Exclusive of the day on which contract is made, Sundays and legal holidays, time limits shall be as follows: Quick Shipment or Forwarding: Two days. Immediate Shipment or Forwarding: Five days. Prompt Shipment or Forwarding: Ten days. Scattered Shipment or Forwarding: Spread evenly over the contract period. Specified Shipment or Forwarding: Specified shipment or forwarding means shipment within a period named in the contract, usually a named month or half month. The words "first half" of a named month shall mean the period ending midnight of the 15th day of the month, regardless of the number of days in the month. Contract periods covering one or more months or the "last half" of a named month shall mean the period ending at midnight on the last day of the month or half month named. If the end of the contract period falls on a Sunday or legal holiday, shipment on the day following will be considered a good delivery.

RULE 29: Telegrams. 

Sec. 1. Time Limits. Where these Rules refer to "telegrams" or "by telegraph", the following time limits shall apply: a. Answers to day messages requiring day answers shall be filed before 12 o'clock, midnight, of the day on which sent. b. Answers to night messages requiring answers shall be filed before noon of the day following the night on which sent. c. The words "immediate" or "immediately" mean within two business hours. d. The words "prompt" or "promptly" mean within three business hours. e. "Business hours" mean the hours from 9 a.m. to 5 p.m. Monday through Friday, at origin or destination as the case may be. The records of the telegraph office will determine the time of receipt or dispatch of telegrams.

Sec. 2. Teletype Messages. Where these Rules refer to "telegrams" or by telegraph", teletype (TWX) messages may be used provided the sender incorporates the date and time in the message and preserves the original copy of the message for at least one year from date of dispatch.

Sec. 3. Phone and Letter Messages. Where these Rules refer to "telegrams", "by telegraph" or "teletype", a telephone message, confirmed by a certified mail letter, mailed within 3 business days of the telephone call, may be used, provided the sender records the time of the telephone call and of the dispatch of the certified mail communication and retains such records together with a copy of the letter for at least one year.

Sec. 4. Facsimile messages. Where these Rules refer to "telegrams", "by telegraph" or "teletype", a facsimile may be used provided the sender incorporates the date and time in the facsimile and preserves the original facsimile for at least one year from the date of dispatch.

RULE 30: Commodities. 

As used in these Rules, the term "commodities" shall mean those oilseeds and oilseed products which are specifically covered by these Rules.

RULE 31: Person or Party. 

"Person" or "party" shall mean a person, an individual, a partnership, firm, corporation, or other legal entity.

RULE 32: Trading Terms. 

As used in these Rules, trading terms shall have the following meanings, subject to Rules 15 and 16:

F.O.B. means free on board and includes the cost of the commodity at a specified point of shipment loaded on, or in, a specified means of transportation. All expenses of delivering commodities to and loading aboard the conveyance are for account of the seller.

C.A.F. means cost, assurance and freight, and includes the cost of the commodity, freight and all other expenses, exclusive of insurance, incurred in delivering the shipment to a specified destination. Insurance is covered by the carrier.

C&F means cost and freight, and includes the cost of the commodity, freight and all other expenses, exclusive of insurance, incurred in delivering the shipment to a specified destination. Insurance is for the account of the buyer.

C.I.F. means cost, insurance, and freight, and includes the cost of the commodity, insurance, freight and all other expenses incurred in delivering the shipment to a specified destination.

F.A.S. means free alongside and includes the cost of the commodity placed alongside the carrying vessel, within reach of its loading tackle, at a specified point of delivery. All expenses incident to such delivery are for the account of the seller.

DELIVERED includes all costs incurred in delivering a shipment to a specified destination. Such costs are for the account of the seller. Insurance is covered by the carrier.

Article 3. Adjustments and Variations 

RULE 40: Tender Of Better Grade. 

A tender of a grade of any commodity traded in under these Rules, better than the grade sold, shall constitute a good tender.

RULE 41: Overweights Or Underweights. 

Settlement for overweights or underweights that exceed the tolerances prescribed in these Rules (Cottonseed-Rule 121; Oil-Rule 200; Cake or Meal-Rule 270; Hulls-Rule 310; Linters-Rule 355; Feed Grade Cottonseed-Rule F-8) shall be made on total deviation from contract weights and on the basis of the market price on the date of the bill of lading. Settlement for overweights or underweights that fall within the tolerances herein provided shall be made on the basis of the contract price.

Article 4. Remedies for Breach of Contract

RULE 50: Options To Party Claiming Breach Of Contract. 

Sec. 1. Default by the Seller. When the Seller finds that he is in default on the shipping schedule, and/or the contract-shipping period, he shall notify the Buyer at once by telephone, facsimile, or electronic mail.

Upon receipt of such notice, the Buyer shall, within 24 hours thereafter, advise the Seller by telephone, facsimile, or electronic mail, which of the following options he elects to exercise: 1. Agree to extend the shipping period; or 2. Buy-in, for the Seller's account, the defaulted portion of the shipment; or 3. Cancel the defaulted portion of the shipments at fair market value based on the day this option is exercised.

If the Seller fails to notify the Buyer of his default, the liability remains in force until the Buyer, by the exercise of due diligence, can determine whether the Seller has defaulted. The Buyer shall notify the Seller at once by telephone, facsimile, or electronic mail and within twenty-four hours thereafter, advise the Seller by telephone, facsimile, or electronic mail which of the options (1) or (2) or (3) above he elects to exercise.

If the Seller defaults on the contract, he is liable for all reasonable costs and expenses as shall have been incurred to and including the day the Buyer elects one of the three options

Sec. 2 Default by the Buyer. When the Buyer finds that he is in default on the shipping schedule, and/or the contract-shipping period, he shall notify the Seller at once by telephone, facsimile, or electronic mail.

Upon receipt of such notice, the Seller shall, within 24 hours thereafter, advise the Buyer by telephone, facsimile, or electronic mail, which of the following options he elects to exercise: 1. Agree to extend the shipping period; or 2. Sell-out, for the Buyer's account, the defaulted portion of the shipment; or 3. Cancel the defaulted portion of the shipments at fair market value based on the day this option is exercised.

If the Buyer fails to notify the Seller of his default, the liability remains in force until the Seller, by the exercise of due diligence, can determine whether the Buyer has defaulted. The Seller shall notify the Buyer at once by telephone, facsimile, or electronic mail and within twenty-four hours thereafter, advise the Buyer by telephone, facsimile, or Electronic mail which of the options (1) or (2) or (3) above he elects to exercise.

If the Buyer defaults on the contract, he is liable for all reasonable costs and expenses as shall have been incurred to and including the day the Seller elects one of the three options.

Sec. 3. If a buyer has on hand a rejected commodity, for which he has paid the purchase price, and seller refuses to refund such purchase price or to replace the commodity, buyer must either take the commodity in at the market price or sell it for the account of whom it may concern.

Sec. 4. Payment for breach shall be made within thirty calendar days.

RULE 51: Taking A Commodity In At The Market Price. 

If a buyer or seller takes a commodity in at the market price, no sale or other action through a broker is required. The transaction will be consummated by such buyer or seller notifying the other person by telegram that the sender takes the commodity in at the market price. Such notice must be given within 24 hours after the right to take in at the market price has accrued. If the parties are unable to agree as to what the market price is, the question may be submitted to arbitration and the arbitration committee will determine said market price from evidence submitted or data accessible to them.

RULE 52: Purchases Or Sales For Account Of Whom It May Concern. 

Whenever a buyer or seller, whose right to do so has accrued, all rights of the opposite party having been forfeited, elects to buy or sell a commodity for the account of whom it may concern, he must immediately notify the opposite party by telegram of his intention. Such purchase or sale must be made in not less than 24 nor more than 72 hours after such notice and shall be for a period of shipping conforming as nearly as possible to that of the original contract. The purchase or sale may be made through a broker member of the Association in good standing or by soliciting written confirmed bids (offers) from at least three dealer, mills and/or other parties. In the event that a broker member of the Association is used, as soon as the broker/dealer receives such an order, he must immediately notify the interested party by telegram.

In addition to the names of buyer and seller in the transaction, the broker must note on his confirmation contract the name of the interested party and the fact that the purchase or sale was made for the account of whom it may concern. He shall send a copy of such confirmation contract to each of the three parties named therein.

In the event that three bids (offers) are solicited, the commodity shall be sold (bought) at the highest (lowest) price. In addition to the names of buyer and seller in the transaction, the contract must note the name of the interested party and the fact that the purchase or sale was made for the account of whom it may concern. A copy of the contract shall be sent to each of the three parties named therein.

RULE 53: Methods Of Fixing Damages Exclusive. 

The methods of fixing damages for breach of contract outlined in Rules 50, 51 and 52 are exclusive and failure to follow the procedure there required will defeat a claim for breach of contract.

Article 5. Brokers

RULE 60: Confirmation, Errors and Discrepancies. 

When a broker member of the Association arranges a trade for a member or members of the Association, it shall be the duty of such broker to immediately confirm by telephone to each principal or interested party the terms of such trade. It will be the duty of the broker to either mail contracts or transmit a facsimile of the contract on the day of the transaction to all interested parties. When such contract or facsimile is received by the principals and found not to be in accord with the offer or acceptance, they, or either of them shall no later than the next business day notify the broker by telephone or facsimile of any error or discrepancy and the broker shall issue a corrected contract or facsimile to each party.

The broker shall be relieved of any responsibility to the principal failing to give the foregoing required notice and said principal shall protect the broker against the other principal.

RULE 61: Brokers Contract Binding. 

A broker's contract or facsimile shall be binding on both buyer and seller, as though signed by both parties. Such contracts shall be issued in triplicate, one copy or facsimile being sent to the buyer and one copy or facsimile being sent to the seller, with one copy being retained by the broker.

RULE 62: Broker's Fees. 

All brokerage fees shall be paid by the seller. Except as provided below, when a trade is closed by a broker, the broker has earned his fee, whether or not the commodities are finally delivered.

In a sale of linters, subject to inspection and acceptance before shipment, the broker's fee shall not be earned if the linters are rejected and delivery is not made because of quality.

Article 6. Weighing and Inspecting

RULE 65: Weighers & Inspectors. 

Sec. 1. Certification. The Board of Directors shall annually certify official weighers and inspectors and deputies at such points as it deems necessary.

Sec. 2. Qualification. Official weighers and inspectors and their deputies shall be persons or firms who are independent of and in no manner, financially or otherwise, connected with or obligated to any buyer or seller by whom they may be employed to perform services as provided for in these Rules. The Board of Directors may require that applicants for certification as official weighers and inspectors, and their deputies, furnish satisfactory assurances that they meet the foregoing qualifications, and that they are familiar with the methods of inspection, sampling, handling of samples, weighing and all other duties provided for in these Rules. Official weighers and inspectors shall be held responsible for faithful performance by their deputies.

The Association reserves the right to suspend or to withdraw the certification of an official weigher and inspector, or a deputy, at any time in the discretion of the Board of Directors.

Sec. 3. Duties. It shall be the duty of official weighers and inspectors to inspect, sample and/or weigh commodities and to perform such other duties as are required by these Rules. In the performance of such duties, official weighers and inspectors shall represent both buyer and seller.

RULE 66: Who Shall Weigh And Sample. 

Where weighing, sampling or other inspection service is required by these Rules, it shall be performed by or under the direct supervision of an official Association weigher and inspector. If none is available, weighing, sampling or other inspection services may be performed, except as provided in Rule 230, Section I and Rule 292, by a sworn public weigher, by a representative of a recognized board of trade or similar organization, or by a qualified and disinterested person or persons acceptable to both buyer and seller.

Under the special circumstances set forth in Rule 69, buyer shall have the right to designate a qualified and disinterested person to perform the weighing, sampling, or other inspection service required.

RULE 67: Official Samples. 

Only samples drawn as specified in these Rules by persons authorized by such Rules, shall be official samples. Only one sample shall be official under a contract.

RULE 68: Sampling and Weighing Procedure. 

Sec. 1. Except as provided in Rule 230 and Rule 292, upon demand by either buyer or seller, the official weigher and inspector, or other properly authorized person shall perform the weighing, sampling or other inspection services requested. The person requesting such services shall furnish the inspector or other authorized person with the names and addresses of the buyer, seller, and original United States shipper, if the latter is not the seller.

Sec. 2. Within five days after performing the services requested, the weigher and inspector shall mail copies of his certificate to buyer, seller, and original United States shipper, if the latter is not the seller. Where services are performed by a person other than an official weigher and inspector, said person shall furnish an affidavit in substantially the form set out in Rule 74.

Sec. 3. Where sampling is performed and the weigher and inspector is requested to do so, he shall furnish a portion of each sample to each of the interested parties within 48 hours after request for inspection is received. An extension of this 48 hour period is permitted where the official weigher and inspector, or other authorized party, lacks official sample preparation equipment. In such cases, said portions of the sample shall be forwarded with the least possible delay.

Sec. 4. The official weigher and inspector, or other authorized party, shall retain for 60 days portions of all samples taken, subject to call by the Secretary of the Association or by any arbitration committee.

RULE 69: Failure Of Seller To Arrange Inspection. 

If buyer has notified seller that a shipment does not conform to the contract, as regards either weight or quality, and seller refuses or neglects for 48 hours to arrange for an official inspection, the buyer may have such an official inspection made. If a sample is drawn, it shall be sent to an official chemist to be named by the buyer and seller or by buyer alone if seller refuses or neglects to state a choice.

RULE 70: Weight Certificates. 

If commodities are weighed or reweighed at destination, the weigher and inspector, or other authorized person, shall furnish both buyer and seller with a weight certificate. If commodities are in carlots, such certificate shall show the date of weighing, the date of arrival at destination, the condition of the car, gross, tare, and net weight, seal numbers and whether or not seals are intact.

RULE 71: Sampling Certificates. 

Whenever commodities are sampled, the inspector shall furnish both buyer and seller with a certificate. Such certificate shall name the commodity, the date sampled, the location, the numbers and other identification of cars or trucks, their condition and the numbers and condition of any seals attached thereto.

RULE 72: Weighing and Sampling Expenses. 

Sec. 1. Weighing. All expenses of weighing will normally be paid by the buyer. If the seller requests a special weigher or different scales and weights prove to be short of invoice weights, seller shall pay all extra weighing expenses.

If reweighing is demanded by the seller or arranged by the buyer upon his own volition, all expenses of such reweighing shall be paid by the party whose weights are farthest from the weights as finally determined.

Sec. 2. Sampling. Except as otherwise provided in these Rules, all expenses of sampling will be paid by the party against whom a claim or arbitration is decided.

RULE 73: Railroad And Truck Scales. 

If commodities are weighed on either public or private scales, the following regulations shall apply: (a) Where weights are for settlement purposes, all carload and truckload shipments shall be weighed both loaded and empty on the same scale. A scale ticket or certified weight sheet showing gross, tare and net weights shall accompany all settlement outturns or claims. (b) Scales for official weighing shall bear certificate of approval issued by a recognized authority dated not more than one year prior to date of weighing. Track scales shall be checked for accuracy by a test car at least each six months. Truck scales shall be checked for accuracy at least each six months by a test truck. (c) The scales shall be correctly balanced before each car, or string of cars, or truck is weighed. Weighers shall make certain that the scale beam is clean, so that figures will be clear and legible and that scale platform is clear of any foreign matter that might bind the scales or otherwise affect the weights of cars or trucks. (d) In weighing railroad cars, the weigher shall insure (1) that the approach rails and live rails do not come in contact with each other, and (2) that all cars are weighed while at rest, uncoupled and free at both ends, and (3) that all weight-bearing wheels are on the scale platform at one time. (e) In the case of trucks, the weigher shall insure (1) that all weight bearing tires are on the scale platform at one time and (2) that nothing has been added to or subtracted from the truck and/or trailer between tare weighing and gross weighing except the commodity on which weights are desired.

RULE 74: Affidavits. 

Where affidavits are required by these Rules, they shall be prepared in substantially the following form:

Form of Affidavit Covering Sampling I, the undersigned, hereby affirm that I have this............day of.............20......, drawn or personally supervised the drawing of a fair and true sample as follows: Commodity............................................................... Location.................................................... Car or Truck No. and Identification....................................................... Condition of Car or Truck............................................................. Seal No. and Condition of Seals.................................................. Special Comment............................................................................

I certify that the sample was drawn in accordance with the Rules of the National Cottonseed Products Association (Oil-230-231; Soapstock-232; Cake and Meal-290-291; Linters-370) and Is marked or identified as follows: .................................................................................................................................... I further certify that the sample was drawn at the request of ............................. .................................................. and that my relationship, business or otherwise, to said party is: ............................................................................................................... Signed _________________________________________ Subscribed and sworn to before me, a Notary Public in and for ............................ County, and State of .................... this ............. day of ......... 20.......

Form of Affidavit Covering Weighing

I, the undersigned, hereby affirm that I have this .......... day of ........... 20......, performed or personally supervised the weighing services as follows: Commodity .......................................................... Location................................................................. Car or Truck No. and Identification................................. Condition of Car or Truck.................................... Seal No. and Condition of Seals Gross Wt. ...........................................lbs. Tare Wt........................... lbs Net Wt. ............................................lbs. Special Comment...........................................................................

I certify that the weighing was performed In accordance with the Rules of the National Cottonseed Products Association (Oil or Soapstock-233; Cake and Meal-292; Hulls-325; Linters-376). I further certify that the sample was drawn at the request of ......................................................... and that my relationship, business or otherwise, to said party is:........................................................................................................... Signed _______________________________________ Subscribed and sworn to before me, a Notary Public in and for ........................................ County, and State of .................................... this ............... day of ................ 20.......


Article 7. Arbitration

The arbitration system of this Association shall comprise as many Arbitration Committees, consisting of at least three but no more than five members, as may be required by the nature and variety of disputes arising. The Secretary shall have the authority to make such decisions as are necessary to carry out these Rules. The purpose of arbitration in this Association is to settle disputes, adjust unsatisfactory conditions, and avoid litigation among its members and nonmembers subject to these rules. All terms used in these rules are intended to be gender neutral (i.e., references to "him" include "her" and "it"; references to chairman are without regard to gender).

RULE 80: Agreement To Arbitrate. 

National Cottonseed Products Association (NCPA) may properly consider a case involving a dispute between or among any of the following: 

(1) Active members of the National Cottonseed Products Association (NCPA) (among whom arbitration by the Association is made compulsory by the Association Bylaws). For purposes of compulsory arbitration, the term "dispute" shall mean issues involving the warehousing, processing, manufacturing, merchandising, financing, transportation, or distribution of Cottonseed or Cottonseed Products within or between the United States, Mexico or Canada; or any issue involving the NCPA Trade Rules;

(2) Active members of the National Cottonseed Products Association (NCPA) and nonmembers, by consent of both parties or by court order. In the absence of a court order a case between a member and a nonmember may not be properly considered by the Arbitration Committee without the consent of both parties. If the contract in dispute between a member and nonmember provides for arbitration by the National Cottonseed Products Association (NCPA) or under its Arbitration Rules, the parties to the contract shall be deemed to have consented to arbitration under these Arbitration Rules;

The following general rules of contract interpretation shall apply in NCPA arbitration cases: (1) In cases between NCPA Active members, the NCPA Trade Rules shall be deemed to apply unless they are inconsistent with the express contractual terms governing a transaction; (2) If a contract between a member and nonmember references NCPA Arbitration but does not also reference the NCPA Trade Rules, the NCPA Trade Rules do not expressly govern the transaction but they may reflect general customs and practices of the trade. (3) A general reference to NCPA rules shall be deemed to incorporate all rules of this Association including the Trade Rules and Arbitration Rules.

The original complaint in connection with any disputed matter proposed for arbitration must be filed with the Secretary within twelve (12) months after a claim arises, or within twelve (12) months after the expiration date for performance of the contract or contracts involved, whichever occurs last; except that in cases between a member and nonmember arbitrated pursuant to a court order, the complaint must be filed within 30 days of issuance of the court order, or within twelve (12) months after a claim arises, or within twelve (12) months after the expiration date for performance of the contract or contracts involved, whichever occurs last. Except where otherwise provided, the term member(s) as used in these Arbitration Rules shall mean Active members accorded arbitration rights by the NCPA Board of Directors. The term nonmember(s) shall mean any other individual or firm.

Each member of this Association, upon applying for membership, has agreed to submit to arbitration any dispute with another member arising out of any contract for the purchase or sale of commodities covered by these Rules. Each member has also agreed and obligated himself to abide by any final award made by an arbitration committee of the Association.

Any member involved in a dispute may demand arbitration and, when such demand has been made, each disputant shall sign the standard form of agreement to arbitrate, as set forth in Rule 81. If the questions at issue and the evidence pertaining thereto are the same, two or more contracts between the same parties may be included in one arbitration agreement. If the questions and evidence are different or relate to quality, requiring different sets of samples, a separate arbitration agreement shall be signed for each contract; or, if the disputants request that different issues be covered by a single arbitration agreement, a separate fee shall be assessed for each contract involved.

In an effort to reduce arbitrations and minor disputes, a Non-Binding Mediation is available to members at no cost to help in resolving issues and avoiding costly arbitration.

If both parties agree to Non-Binding Mediation a current, past or retired member of the board of directors, rules committee, or arbitration committee will act as a mediator. The secretary will present a list of available mediators to both parties and a mutually agreeable mediator will accept simple briefs from both parties describing the disagreement. The mediator, at his or her discretion will review briefs, conduct phone interviews, and conduct conference calls in an effort to resolve dispute. After careful review, the mediator will send a written opinion to both parties involved. Parties may either resolve dispute or continue with filing for arbitration. Non-Binding Mediation will remain confidential to parties and mediator involved and mediator will not be eligible to serve on arbitration.

In arbitrations involving the Cottonseed Oil Export Trading Rules, arbitration shall be conducted according to Article 9., Chapter VIII, Cottonseed Oil Export Rules.

RULE 81: Standard Form Of Agreement For Arbitration.

This Article of Agreement, made and entered into this ...................... day of ...................... 20.....

WITNESSETH:

That whereas differences and controversies are now existing and pending between ...................................................................................................... as Complainant and ..................................................................................... as Defendant in relation ........................................ as covered by contract identified as follows: Date...............Broker ......................................................................................

NOW, THEREFORE, WE, THE UNDERSIGNED, do hereby mutually agree to submit the entire controversy arising out of said transaction to the arbitration and decision of an Arbitration committee of the National Cottonseed Products Association, Inc., according to the rules, regulations and By-Laws of said National Cottonseed Products Association, Inc., and we do further authorize and empower the said Committees to arbitrate, award, adjust and determine the differences now existing between us in the aforesaid matter.

AND WE DO FURTHER COVENANT AND AGREE that the award to be made as aforesaid, by the said Committee on Arbitration, shall in all things, by us and each of us respectively, be well and faithfully performed; that we will stand to, abide by, and fulfill the same, and that we will pay whatever sum of money may be awarded, as aforesaid. 

AND FURTHER, that we will abide by the rules, regulations and By-Laws of said National Cottonseed Products Association, Inc., and deposit all funds as outlined in the fees for arbitration with the Secretary prior to commencement of arbitration.

AND WE DO FURTHER AGREE that the award, if made in writing and signed by the arbitrators, and attested by the Secretary of the National Cottonseed Products Association, Inc., may be entered on the records of the court of jurisdiction in the State and County or Parish in which we or either of us reside, and that judgment may be had thereon in accordance with the terms thereof.

AND WE DO FURTHER AGREE that whatever samples, if any, which may be submitted by either party to the controversy for examination, may be destroyed or otherwise disposed of at the end of thirty days after the hearing of this case, if not otherwise instructed.

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Complainant

 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
Defendant

Note: Complainant should prepare and sign five copies of this Agreement or Arbitration, retaining one for his files and sending four to the Secretary if the Association. All copies of papers submitted as evidence in arbitration must be certified to, in accordance with Rule 85.

RULE 82: Duties Of Arbitration Committee.

If a dispute is submitted to an arbitration committee, it shall be the duty of such committee, as soon as practicable after it has received all evidence, to review and to render a decision. The committee's decision shall 'e made in accordance with these Rules.

The committee shall set forth in writing its decision and the reasons therefore. Three copies shall be submitted to the Secretary who shall send one copy to each person involved and retain the third copy with his records. All documents, samples, or the evidence shall be returned to the Secretary to be retained by him in the event that an appeal from the committee's decision is taken.

RULE 83: Powers And Duties Of The Secretary. 

The Secretary shall follow the procedure set forth in Rule 84, procuring from each contestant the standard form of agreement to arbitrate, properly executed, and the fees required by Rule 91. The Secretary also shall receive from and transmit to the contestants the several documents that must be exchanged, call meetings of the arbitration committees when necessary, disburse the fees and expenses allowed under Rule 91, and furnish each contestant to a dispute with a copy of the arbitration committee's decision and award.

Unless otherwise specified, all notices issued by the Secretary and all briefs and other documents transmitted by him shall be sent by registered or certified mail and a return receipt obtained.

Such receipts shall be retained by the Secretary so that his records will show that the time limits provided in Rule 84 have been observed.

RULE 84: Arbitration Procedure. 

Sec. 1. The member demanding an arbitration will be referred to as the complainant. The person against whom an arbitration is demanded will be referred to as the defendant.

Demand for an arbitration shall be made by letter or telegram addressed to the Secretary of the Association within 90 days after the complainant's right to arbitrate has accrued. When such demand is made, the Secretary will immediately furnish five copies of the standard form of agreement to arbitrate. Complainant shall promptly prepare and sign such forms, retaining one copy and returning four copies to the Secretary.

Sec. 2. With such agreement, complainant shall file seven copies of his brief and supporting evidence, and the arbitration fee required by Rule 91. In the brief, complainant shall open his case fully.

As soon as he receives them, the Secretary shall forward to the defendant three of the signed copies of the agreement to arbitrate and a copy of the complainant's brief and supporting documentary evidence. Within five days after receipt of these documents, the defendant shall file with the Secretary two copies of the agreement to arbitrate, properly signed, and the fees as required by Rule 91. Within fifteen additional days, the defendant shall file with the Secretary seven copies of his brief and evidence.

Sec. 3. Upon receipt of these documents from the defendant, the Secretary shall furnish the complainant a copy of the fully executed agreement to arbitrate and a copy of the defendant's brief and supporting documentary evidence. Ten days after complainant receives the defendant's brief, the case shall be submitted to an arbitration committee. Within that ten-day period, complainant may reply to defendant's brief and the Secretary shall immediately furnish the defendant a copy of such reply and any supporting permissible documentary evidence. No additional evidence may be submitted with such reply, except such as may be required to answer points raised in defendant's brief.

Sec. 4. For good cause shown, the President of the Association may, upon written or telegraphic request made within the time limits specified above, extend the time for filing briefs and evidence. In no case, however, shall the time of defendant for filing his brief be extended by more than twenty days, and in no case shall the time of complainant for filing a reply be extended by more than ten days.

Sec. 5. When a case is fully prepared and ready to be assigned for hearing, the Secretary shall assign it to a qualified committee as he may deem advisable for the expeditious handling of the case in the Association. A member of the committee shall disclose to the Secretary any circumstances likely to affect his impartiality, including any bias or any financial or personal interest in the result of the arbitration. Upon receipt of any such information from a committee member, the Secretary shall transmit such information to both parties and replace said member if either party requests such action within five (5) days from receipt of such information or after the voluntary withdrawal of such committee member. Upon assigning a case as herein provided, the Secretary shall notify each party of the names and addresses of the chairman and members of the Arbitration Committee processing said case. Upon receipt of such notice, either party to the case may challenge the appointment of a member of the Arbitration Committee for prejudicial or other causes within five (5) days of receipt of this notice. Upon determination that such challenge is valid the Secretary shall replace such member.

The Chairman of a Arbitration Committee may choose for his committee to determine its awards, by one or more of the methods hereinafter set out provided however, that if either disputant requests an oral hearing same must be held: (1) By passing the papers from one to another by mail; (2) By calling a meeting of the members of a Committee; (3) By calling a meeting of members of the Committee to hear oral argument; (4) By such other means as the Chairman may deem necessary.

A decision of the members of an Arbitration Committee shall be by majority vote.

A Committee cannot be called together more than once each calendar month, except by the consent of every member of a Committee. A Committee cannot act at a meeting thereof, unless all members are present.

When either party to arbitration requests an oral hearing, the same must be held. Such written request must be made to the Secretary on or before the filing of the defendant's briefs. The introduction of new documents or written evidence at an oral hearing is not permitted.

The party requesting such an oral hearing must pay whatever amounts, in addition to the regular deposits as provided in rule 91, as shall be necessary to cover the approximate additional expenses of the Committee and the Association for the hearing. The amount of such additional expenses shall be determined and fixed by the Secretary. The party requesting an oral hearing shall advance the amount determined necessary to cover approximately the additional hearing expenses, including a stenographic record as set forth and travel expenses as set forth by the Secretary. The Secretary shall notify the requesting party within ten (10) days after appointment of the Arbitration Committee what the approximate expenses of the hearing will be. If both parties request an oral hearing, the amount to be paid by each in advance shall not exceed one-half of the estimated amounts. The amount specified shall be advanced by the requesting party no later than ten (10) days after notification from the Secretary. Failure to advance expenses may be grounds for denying a request for an oral hearing. After the Committee determines and fixes the actual amount of additional expense incurred, the party or parties shall be refunded or billed by the Secretary for the difference between the amounts advanced and actual costs.

In the event of an oral hearing, the Secretary shall make the necessary arrangements for the taking of an official stenographic record of the hearing. The party or parties requesting the oral hearing shall pay the cost of such record directly to the Secretary in accordance with the normal procedure for paying the hearing costs. The Secretary shall pay the reporting agency in accordance with their agreement. The stenographic record shall be made a part of the official transcript of the case. When a case is to be considered as above for oral hearing, the Chairman of the Committee shall fix a time and a place for its hearing, and shall give the Secretary twenty (20) days notice of the date and the place so fixed, so as to enable the Secretary to give the parties to the arbitration fifteen (15) days notification of the date and the place of the hearing. Neither party shall seek to postpone the hearing of a case longer than ten (10) days after such date has been set, unless good cause, satisfactory to the Committee, can be shown therefore. Requests for postponement must be received by the Secretary at least ten (10) days prior to the date set for hearing. The members of the Arbitration Committee, the Secretary, and the Association's legal counsel shall receive the amount of their actual traveling and hotel expenses when attending meetings to consider a case by oral testimony. Arbitration Committee shall act promptly on all cases submitted. The awards of the Arbitration Committee shall be dated on the day they are received at the office of the Secretary, and copies of said awards shall be mailed by the Secretary to the parties to the arbitration within five (5) days after receipt thereof. Each award shall contain a concise statement of the pertinent facts and the conclusions of the Arbitration Committee and the reasons therefore. The parties to the arbitration shall file a notice of appeal, or comply with the terms of the Arbitration Committee's Award within ten (10) days from the receipt of said award.

A bulletin shall be published as frequently as is necessary to give the details, as hereinafter provided, of all cases arbitrated, awards made, and any other information relative to the subject of arbitration which may be deemed of interest to the members of the Association. Copies of the bulletin shall be mailed to all NCPA members.

Said bulletin shall set forth: (1) The names of the plaintiff and the defendant; (2) The award(s) of the Committee, giving the names of the plaintiff and the defendant in each case, the nature of the case and the amount involved, the award and such other information as may be of interest to the members; (3) Notice of failures to comply with the terms of awards, giving a record of each case; (4) Notice of refusals to arbitrate, giving a record of each case, and any reasons offered for said refusals; (5) Notice of failures to answer the correspondence of the Secretary relative to arbitration.

The Arbitration Committee may include an amount of interest in an award. If interest is awarded, unless otherwise provided by agreement between the parties, the applicable rate of interest shall be the Prime Rate as published in the Wall Street Journal on the date the case was filed.

RULE 85: Appearance And Evidence Before Arbitration Committees. 

Sec. 1. Evidence may be submitted in the form of samples of the commodities involved, letters, telegrams, contracts or the documents, and ex parte affidavits. Letters, telegrams, contracts or other documents may be either originals or copies. If other than photostatic copies are furnished, they shall be accompanied by the affidavit of a credible person that they are true and correct copies of the originals. If copies are used, the arbitration committee shall have the right to demand the originals.

Sec. 2. The arbitration committee shall have the right to require either contestant to furnish any additional documentary or other evidence available to said contestant, which would enable it to give the case intelligent and proper consideration. If the complainant refuses to produce such additional evidence, the committee may, at its discretion, dismiss the complaint. If the defendant refuses to produce such additional evidence, the committee may, at its discretion, decide against him, as if by default.

RULE 86: Handling Samples Submitted For Arbitration Purposes. 

If differences exist involving quality, either buyer or seller may instruct the official weigher and inspector or other authorized person holding samples of the commodity involved to forward such samples to the Secretary of the Association. If the contestants are not agreed on the sample(s) to be used in deciding the controversy, the arbitration committee will consider samples furnished by each contestant, provided such samples have been drawn according to methods prescribed in and by persons authorized by these Rules.

Each sample submitted for arbitration purposes shall be given a serial number for identification and all original tags or other identification marks shall be removed and preserved under the same serial number. If analysis is required, such sample shall be referred to an official chemist, designated by the chairman of the arbitration committee. The official chemist shall promptly make the required analysis and shall report his findings to the arbitration committee chairman only. Violation of this Rule by an official chemist will make such chemist liable to expulsion from the Association by a majority vote of the Board of Directors.

RULE 87: Rehearing Before Arbitration Committee.

Any contestant in arbitration who has discovered additional evidence and is dissatisfied with the award of an arbitration committee may have the case reheard by the committee. Application for such rehearing must be filed with the Secretary within ten days after such contestant receives notice of the award.

Within twenty days after he receives notice of the award, the applicant for a rehearing must file with the Secretary, seven copies of such additional evidence and brief as he desires to submit. The Secretary shall promptly furnish the opposite party with a copy thereof. Within ten days after receipt of the brief, said opposite party may file a reply. At the end of such ten-day period, the Secretary shall resubmit the case to the arbitration committee.

RULE 89: Ex Parte Arbitration.

If, in any dispute where arbitration has been demanded, the defendant fails or refuses, within the five-day period provided in Rule 84, to return to the Secretary the standard agreement to arbitrate, properly executed, the complainant may demand an ex parte arbitration. Such demand shall be made by letter or telegram addressed to the Secretary.

Upon receipt of such demand, the Secretary shall notify the defendant that demand for ex parte arbitration has been made. If the defendant fails within five days after receipt of such notice, to return to the Secretary properly executed agreements to arbitrate the Secretary shall refer the matter to an arbitration committee to be selected by the President. Such committee shall consist of not less than 3 or more than 5 members. He shall by telegram notify both complainant and defendant of his action.

The designated committee will proceed with the arbitration and its decision will be binding on all contestants involved. Any documents filed with the Secretary by the defendant before the case is heard may be considered by the committee, if it so desires. Costs of the arbitration will be charged to the complainant but the committee shall if it decides in the complainant's favor, add such costs to the award.

RULE 91: Arbitration Fees.

Sec. 1. Claim up to $100,000: $500, plus 1% of the claim;
Claim up to $100,001 to $500,000: $1,000, plus % of the claim;
Claim up to $500,001 and greater: $2,000, plus % of the claim;
The maximum arbitration service fee shall be $10,000.

In the event a case is settled prior to the request to the plaintiff for rebuttal, parties may receive as refund of arbitration fees, up to fifty percent (50%) of the previously submitted fees. In all cases, the Secretary may reduce refunds by direct or indirect costs incurred by the Association in connection with a case. For cases settled following submission of the rebuttal, fees are non-refundable. In string or other multiparty cases treated as a single arbitration by the Association, a party shall not be required to pay more than a maximum of two arbitration service fees.

Sec. 2. Each Association member of an arbitration committee shall have refunded to him the actual expense incurred by him to attend a meeting of the committee. Such expense shall be treated as costs. If a committee decides more than one case at a single meeting, the expenses of committee members shall be prorated equally to the cases so heard.

RULE 92: Notice Of Claims And Resignations Pending Arbitration.

Members of the Association should promptly notify the Secretary of the existence of any dispute(s) that may lead to arbitration. The resignation of a member against whom such a complaint has been made or against whom an arbitration has been demanded shall not be accepted until such complaint or arbitration is finally settled.

RULE 93: Arbitration Between Members And Non-Members. 

No non-member may demand an arbitration against a member of this Association.

RULE 94: Arbitration Between Non-Members. 

This Association will not arbitrate differences between non-members.

Article 8. Chemists

RULE 100: Official Methods of Analysis. 

The methods of chemical analysis prescribed in Chapter VII of the Rules must be observed by all official chemists and their reports shall bear a certificate to this effect.

RULE 101: Analyses for Settlement Purposes. 

Sec. 1. If a contract does not name the chemist or chemists whose analysis shall determine quality, buyer shall furnish seller with the results of an analysis, based upon official or agreed samples. If a seller declines to accept a buyer's analysis on a contract for oil, he shall submit an analysis of an official sample made in his own laboratory or by an official chemist. Settlement shall be based upon the mean of the two analyses.

Sec. 2. In the event that either buyer or seller questions the results of the opposite party's analysis referred to in Section 1, the third portion of the official sample shall be sent to an official chemist approved by both buyer and seller. The official chemists' analysis shall include free fatty acids, refining loss and color and all three analyses shall be used in determining the monetary values based on that sample. Settlement should be based on the mean of two of the three monetary settlement values coming closest together when analysis results of refining loss and color are within acceptance limits. *(See example). If the average of any pair of the three analyses being used indicates rejection, while the average of some other pair of analyses results in the shipment being tenderable, any averaging which indicates rejection will not be considered further in arriving at a settlement basis. In the event that two pairs of analyses average within tenderable limits while one pair indicates rejection, the pair of tenderable analyses which results in the lowest dollar return to the seller will be used for settlement. If buyer and seller cannot agree on a chemist, the Secretary of the Association shall select the third chemist.

Sec. 3. If two official cake or meal analyses of the same lot do not agree within one-half unit of protein on a dry basis (for comparative purposes only), and where two official cottonseed analyses of the same lot show a difference in excess of two full grades, a third official analyses (Referee analysis) by an official chemist agreed upon by both parties shall be arranged and settlement made upon the Referee Analysis.

Sec. 4. In the event that either buyer or seller questions the results of the opposite party's analysis for the combination of moisture and insoluble impurities the third portion of the official sample shall be sent to an official chemist approved by both buyer and seller. The average of the two analyses coming closest together shall determine whether the shipment is tenderable.

EXAMPLE Mean Buyer Seller Referee Settlement FFA 4.2 4.4 3.8 4.1 RL 15.4 14.8 14.6 14.7 Color 8.5 7.6 8.1 7.85 Settlements $2,902.37 $2,532.60 $2,562.53 $2,547.57

150,000 tank car @ $0.30/lb = $45,000 contract value

Buyer's Settlement FFA = (100-15.4) X .00015 X $45,000 = $ 571.05 RL = .0075 X (9.0-15.4) X $45,000 = 2,160.00 Color = (100-15.4) X .0005 X (.76-.85) X $45,000 = 171.32 $2,902.37

Seller's Settlement FFA = (100-14.8) X .00015 X $45,000 = $ 575.10 RL = .0075 X (9.0-14.8) X $45,000 = 1,957.50 Color = None = -0- $2,532.60

Referee's Settlement FFA = (100-14.6) X .00015 X $45,000 = $ 576.45 RL = .0075 X (9.0-14.6) X $45,000 = 1,890.00 Color = (100-14.6) X .0005 X (.76-.81) X $45,000 = 96.88 $2,562.53

RULE 102: Chemists' Reports.

When an official sample is submitted by either buyer or seller to an official chemist for official analysis, the other party shall be notified and the chemist shall report to both parties.

RULE 103: Chemists' Fees. 

If a contract carries a guarantee of quality that must be determined by chemical analysis and seller has to pay an allowance for a deficiency, he shall also pay the cost of official analysis. If no allowance is chargeable to seller, buyer shall pay the cost of official analysis. If buyer's original analysis of oil in tank cars or tank trucks is not accepted by seller and final settlement analysis proves the commodity to be of higher value than such original analysis, buyer shall pay the cost of official analysis. With these two exceptions, seller shall pay the cost of official analysis.

If official analysis of samples submitted for arbitration purposes is requested by the chairman of an arbitration committee or the Secretary and the case is settled between the contestants without completing the arbitration procedure, the party or parties submitting the samples shall pay the cost of official analysis.


2002 National Cottonseed Products Association. All rights reserved.
Effective August 1, 2008