Quality Arbitration

Quality Arbitration is a method used in international trade to resolve disputes between buyers and sellers regarding the quality of goods. When the buyer receives the goods and believes the quality does not conform to the contract, while the seller disagrees, both parties may agree to submit the dispute to an independent third-party inspection agency or arbitration tribunal for a ruling. This term is commonly found in dispute resolution clauses in contracts, especially for transactions involving bulk commodities, machinery, and equipment where quality disputes are likely. When using quality arbitration, note: 1) specify the arbitration institution, applicable rules, and place of arbitration; 2) stipulate inspection standards and sampling methods; 3) arbitral awards are usually final and binding on both parties. Compared with friendly negotiation or litigation, quality arbitration is more professional and efficient but more costly. Unlike quality inspection clauses, quality arbitration is a dispute resolution mechanism after a dispute arises, while quality inspection is a preventive measure beforehand. In addition, quality arbitration may be combined with quantity arbitration, but they must be stipulated separately in the contract.