In June 1938, following meetings at the cotton exchanges in New York, Memphis, and New Orleans as well as with the Board of the American Cotton Shippers Association (ACSA) and representatives of the U.S. Department of Justice and the Department of Agriculture in Washington, the Association’s Board was granted the authorisation to draw up contracts containing the Gdynia Arbitration Clause and to enforce its awards in disputes with American partners.
On 26 September 1938, together with the inauguration of the Association’s headquarters – the Cotton House – cotton arbitration in Gdynia was officially launched. This marked the moment when the Gdynia Cotton Association Stakeholders became an arbitration institution recognised by the international cotton community, and Poland’s first Arbitration Court was established.
The Birth of the Gdynia Cotton Association and Its Arbitration Institution
The founding of the Association of Cotton Trade Stakeholders in 1935, and the establishment of its arbitration body in 1938, coincided with a period of rapid transformation in the Polish textile industry. It was also a time of dynamic development of the city of Gdynia and its newly built commercial port, which quickly became the country’s main point of entry for imported cotton.
From the outset, the Association worked intensively on developing the Gdynia Conditions for cotton quality arbitration. The inspections were to be carried out by professional, sworn cotton classers, while disputes with suppliers were to be resolved under contracts containing the Gdynia Arbitration Clause. The second instance in such disputes was designated as Chambre Arbitrale de Cotons in Le Havre – one of Europe’s long-established cotton exchanges.
The Arbitration Rules consisting of ten chapters were approved by the Extraordinary General Assembly of the Association on 2 September 1938. The opening ceremonies of the Cotton Arbitration Institution in Gdynia took place on 26–27 September 1938, simultaneously marking the official inauguration of the Association’s headquarters – the Cotton House.
On that occasion, congratulatory letters arrived from cotton exchanges around the world, and the prestigious industry journal The Cotton Trade Journal – New Orleans published a special “Poland – Gdynia Edition” (Issue No. 44, 1938), containing numerous messages of congratulations to the new institution. It was a remarkable event for both, the Port and the City of Gdynia. Special editions of the monthly Wiadomości Portu Gdyńskiego (Port of Gdynia News) Nos. 9 and 10/1938 featured articles, congratulations to the Association’s authorities, and reports on the Polish cotton market.
Between September 1938 and August 1939, Gdynia cotton inspectors examined nearly 40,000 bales – about one in every seven bales imported into Poland at that time. Unfortunately, no records have survived showing the results of those inspections. Within an exceptionally short period – to the astonishment of established European cotton centres such as Bremen, Rotterdam, Le Havre, and Liverpool – Gdynia had become a strong and competitive hub for cotton trade and quality control, home to the largest cotton port on the Baltic Sea.
The activity of the Arbitration Court was interrupted by the outbreak of the Second World War in 1939.
The culmination of the Association’s post-war efforts came with the reopening of the rebuilt Cotton House, accompanied by the reinstatement of its arbitration rights and the resumption of operations of the International Cotton Arbitration Court.
The official ceremony, held on 6 June 1948 and combined with the General Assembly of the Association, was attended by representatives of both, central and local authorities, including Eugeniusz Kwiatkowski, the then Government Plenipotentiary for the Reconstruction of the Coast. Numerous guests from the cotton industry, partner international cotton associations and exchanges as well as companies and organisations involved in the cotton trade, were also present.
Congratulatory telegrams arrived from abroad, among others from ACSA and the National Cotton Council of America, the Liverpool Cotton Association, Marche Cotton – Ghent, the Swedish Cotton Association, and the Alexandria Cotton Exchange.
The first post-war quality arbitration took place on 16 March 1949, concerning two lots of Brazilian cotton. The arbitrators issued a unanimous decision granting a reduction in price to the Polish buyer. Both parties accepted the verdict and did not exercise their right to appeal to the second instance.
After the the war, the directions of cotton imports changed significantly, broadening the scope of quality arbitrations to include deliveries from countries such as the Soviet Union, Egypt, and Sudan.
Through its continued activity, the Gdynia Cotton Association earned a distinguished position in the international cotton trade. Since its establishment, it has protected the interests of its members on the global cotton market and served as a trusted arbitration institution ensuring fair trade and quality standards.
