PANAMA DIAMOND EXCHANGE
Statutes and Bylaws
ARTICLE (1): Name and Address
1.1 The name of the exchange shall be “PANAMA DIAMOND EXCHANGE” and is referred to hereinafter as “PDE”.
1.2 The principal headquarters of the PDE shall be at the offices of “Panama Diamond Exchange S.A.”, in the Republic of Panama. It shall be permissible to open additional branches and representative offices for PDE within the Republic of Panama, by a decision of the Board of Directors, after obtaining the approval of the competent authorities in the Republic of Panama.
ARTICLE (2): Objectives and Powers
2.1 The objectives of PDE shall be to:
(a) Promote the interests and development of the diamond, precious stone and related jewelry industries in the Latin America and adjacent regions;
(b) Encourage and maintain just and equitable principles of trade in diamonds, precious stones and related jewelry amongst its members;
(c) Eliminate abuses and unfair trade practices in relation to such trade;
(d) Disseminate accurate and reliable information concerning such trade;
(e) Cooperate with governmental agencies and other relevant parties within Panama and abroad in the establishment and maintenance of institutional arrangements conducive to the ethical and economic welfare of these industries;
(f) Provide arbitration tribunals to settle differences and controversies amongst its members, and between its members and other parties, in relation to trading in diamonds, precious stones and related jewelry;
(g) Provide for disciplinary proceedings to be taken against members for breach of trade ethics or of dishonorable conduct;
(h) Provide, regulate and maintain suitable premises in the republic of Panama for its activities.
2.2 PDE has all the powers required to achieve its objectives as set out above, including without limitation the power to:
(a) Acquire, own, possess, sell, lease, mortgage or otherwise dispose of all such properties both moveable and (to the extent permitted by law) immovable as may be necessary or conducive to the attainment of PDE objectives;
(b) Open bank accounts, to obtain loans and financial facilities necessary for achieving its objectives, and to provide its assets as a security for the same;
(c) Provide all kinds of services to its members and others, and to impose and collect fees against the services provided thereby;
(d) Invest its funds in the form, activities and/or projects as may be deemed appropriate by its Board of Directors;
(e) Join in association with any similar body, including the World Federation of Diamond Bourses (hereinafter referred to as “WFDB”), agreeing that its members shall be required hereby to comply with the rules, regulations and resolutions of such body;
(f) Carry out any other function as may be deemed by its Board of Directors necessary and required for achieving its objectives.
The aforesaid objectives shall be carried out by PDE, through its Board of Directors, in accordance with rules and regulations issued by Panama Diamond Exchange S.A., and the laws and regulations of the Republic Of Panama.
ARTICLE (3): Membership
3.1 Categories of Membership:
3.1.1 There shall be one category of membership of PDE:
Individual Membership which shall be available for natural persons satisfying the qualifications specified in Clause (3.2.2) hereunder;
3.1.2 Without prejudice to Clause (3.1.1) above, during a period of two years immediately following the creation of PDE, the Board of Directors may admit certain natural persons to Individual Membership who shall be known as Founder Members and have all the rights and obligations of Individual Members admitted in accordance with Clause (3.2) hereunder.
3.2 Admission to Membership:
3.2.1 Application for membership with PDE does not automatically constitute acceptance thereof by the Board of Directors, as such application shall be subject to the requirements and qualifications determined by the Board of Directors, from time to time, in respect thereof.
3.2.2 Individual Membership:
A natural person may be admitted to Individual Membership of PDE, if he or she has:
(a) Attained the age of 21 years at the time of submitting the application for membership;
(b) Been engaged in the diamond, precious stone or related jewelry industry for a period of at least two years at the time of submitting the application for membership;
(c) An unblemished trade reputation;
(d) Been interviewed by the Membership Committee of the Board of Directors;
(e) Submitted to the Secretary of PDE a complete Application Form along with all supporting documents and the Application Fee, as prescribed by the Board of Directors;
(f) Been proposed for membership by a member of PDE in good standing, and seconded by one other person who is either a member of PDE or a member of a bourse affiliated with the WFDB;
(g) Provided such evidence of financial good standing as the Board of Directors may from time to time require;
(h) Provided the Membership Committee with all other documents and information required by the Membership Committee or the Board of Directors.
(i) Has provided the Secretary of PDE with an acknowledgment and undertaking duly signed by an authorized signatory of the entity, as requested by the Membership Committee, in form and contents acceptable to the Board of Directors of PDE, confirming to be bound by and be subject to the mandatory arbitration provisions contained in these By-Laws in respect of any and all claims and disputes arising from or related to the diamond, precious stone or related jewelry business, including tort claims, with other members of PDE and with members of other diamond bourses which are part of the WFDB in accordance with PDE By-Laws and the By-Laws and Rules of the WFDB.
3.2.3 Admission to PDE membership shall be by resolution of the majority of the Board of Directors, following advice from the Membership Committee.
3.2.4 The list of the names of all applicants for Individual Membership shall be posted at PDE head office for a period of ten days – prior to the Membership Committees’ interview of the applicant. During the posting period and for a period of five days thereafter any member may object in writing to the admission of the applicant and the Membership Committee shall take into consideration such written objection(s). The aforesaid provisions of this Clause (3.2.5) shall apply in case of any change in the named representative.
3.2.5 Any person whose application is rejected may again apply for membership after six months from the date of the Board of Directors decision in respect thereof.
3.2.6 All new members shall be on probation for a period of two years commencing from the date of issuing the decision of the Board of Directors in acceptance thereof, and the Board of Directors shall be entitled to terminate and/or cancel such membership at any time within this period for any reason whatsoever.
3.2.7 Any member may resign from the membership with PDE by sending a written notice of not less than 30 (thirty) days to the Secretary. Such member shall be responsible for all obligations and duties of a member in good standing in connection with any transaction or matter which arose or which was initiated, in part or in whole, prior to such member’s suspension or termination, including but not limited to arbitration.
3.2.8 Should a member who is a representative of a partnership or corporation withdraw from that entity, it shall be the obligation of the withdrawing member as well as the entity itself to immediately notify the Secretary in writing of such withdrawal by hand against receipt, or by certified mail, return receipt requested.
3.3 Membership Rights:
3.3.1 Individual Members of PDE in good standing shall be entitled to:
(a) Represent themselves in their business dealings as a “Member of the Panama Diamond Exchange”;
(b) Enter the Trading Floor of PDE for the purpose of dealing with other members in diamonds, precious stones and/or related jewelry;
(c) Attend and vote at meetings of members convened in accordance with these By-Laws;
(d) Participate in the election of Directors to be elected by the members of PDE;
(e) Enjoy other benefits and privileges as shall be determined by the Board of Directors from time to time, at its sole discretion.
3.4 Membership Obligations:
Members of PDE shall be obliged to:
(a) Conduct their business dealings in diamonds, precious stones and related jewelry in accordance with the laws of the relevant jurisdictions and in accordance with high standards of business ethics;
(b) Comply with these By-Laws, in particular those relating to arbitration, as duly amended from time to time;
(c) Refrain from trading in, offering or promoting conflict diamonds;
(d) Pay to PDE such annual subscriptions and other financial commitments as the Board of Directors may determine from time to time.
3.5 Disciplinary Action Against Members:
3.5.1 If the Board of Directors has reason to believe that a member has committed any of the following:
(a) Failure to pay on time all amounts due to his/her/its creditors;
(b) Failure to pay on time the membership fee to PDE;
(c) Failure to pay fines imposed by PDE, as well as, any other amounts due from such member to PDE;
(d) Breached of these By-Laws and/or the rules and regulations issued by the Board of Directors from time to time;
(e) Failure to meet his/her business obligations;
(f) Receipt of a petition in bankruptcy or any involuntary petition in bankruptcy, making an assignment for the benefit of creditors;
(g) Failure to comply with a decision or awards of the arbitration tribunals;
(h) Intentionally making an untrue claim;
(i) Avoiding arbitration by going to court against another member.
The Board of Directors may conduct an investigation of that member. Thereafter, the Floor committee shall have the authority to decide on fines up to 1,000 USD (Fines above 1,000 USD must be approved by the Board).
3.5.2 The Secretary shall give written notice, by hand against receipt, or by certified mail, return receipt requested, of the date, time and place of such investigation to:
(a) The member who is the subject of the investigation;
(b) The complainant;
(c) Any known witnesses.
3.5.3 The member shall have the opportunity to file a written answer to the charges within five days after being served personally or by mail and to present witnesses, documentation or other evidence in his defense and cross-examine any witnesses that may testify against him.
3.5.4 The member shall be entitled to request the dismissal of any member of the Board of Directors from the meeting or meetings conducting the investigation, on grounds stated, and the Board of Directors (including the Director concerned) shall make a decision thereon which shall be final and binding.
3.5.5 Should the Board of Directors find the member guilty of the alleged misdemeanors the Board shall have the right to determine such disciplinary action it deems fit in its absolute discretion, including one or more of the following:
(a) Specific performance, such as a letter of apology or return of property;
(b) A fine payable to PDE;
(c) A compensatory fine, payable to an aggrieved party;
(d) Suspension of membership for a specified period;
3.5.6 Any member whose membership is suspended or who is expelled as a result of a failure on part of such member to pay his creditors their respective dues on time, may be reinstated by the Board of Directors upon the satisfaction of the Board of Directors that such member has settled the due amounts or has reached a settlement agreement in settlement of the same. Each case shall be handled individually at the sole discretion of the Board of Directors.
3.5.7 The membership of any member who is suspended for non-payment of his membership fees, fines or any other amounts due to PDE shall be automatically terminated if such member fails to pay the outstanding amounts within two months from the date of suspension.
3.5.8 Any member who was suspended or terminated for reasons other than non-payment of dues and resignation may, after a period of 2 (two) years from his suspension or termination, apply for membership in PDE in the same manner and under the procedure applicable at the time of applying for the new membership.
3.5.9 Whenever any member is suspended or terminated, such member shall be responsible to all obligations and duties of a member in good standing in connection with any transaction or matter which arose or which initiated, in part or in whole, prior to such member’s suspension or termination, including but not limited to arbitration.
ARTICLE (4): Finances
4.1 The registration fees, the annual membership fees, as well as, all applicable fines and all other financial obligations of members towards PDE shall be determined by the Board of Directors, and be placed on the advertisement board at PDE head office.
4.2 PDE shall operate an account or accounts with such bank(s) in the Republic Of Panama as the Board of Directors shall determine from time to time and all funds of PDE shall be deposited in the name of PDE in such accounts.
4.3 The Board of Directors shall arrange for annual financial statements (and annual report available to members) to be prepared and shall appoint a certified auditor to examine the books and accounts of PDE and issue an annual report and balance sheet.
ARTICLE (5): The Management
5.1 Subject to Clause (5.5), PDE shall be managed by a Board of Directors consisting of seven (7) members; four (4) appointed by Panama Diamond Exchange S.A. (hereinafter referred to as “Appointed Directors”) and three (3) elected by the members of PDE in accordance with these By-Laws (hereinafter referred to as “Elected Directors”).
5.2 Each Elected Director shall serve on the Board of Directors for a period of two years commencing from the date of election thereof with the maximum of three consecutive terms. The members of the Board of Directors shall assume office the following business day following their election or appointment, as applicable, and shall continue in the office until their successors shall be properly elected and assume office. Any vacancy that may occur among the Elected Directors shall be filled for the remaining term thereof by the remaining members of the Board of Directors appointing any PDE member in good standing to the position.
5.3 The tenure of the first Board of Directors shall start from the first Annual General Meeting and shall last for two years.
5.4 Panama Diamond Exchange S.A. may appoint Alternate Directors for Appointed Directors.
5.5 Panama Diamond Exchange S.A. shall be entitled to replace any one or more of the Appointed Directors at any time by a written notice to the Secretary. If Panama Diamond Exchange S.A. chooses to replace an Appointed Director who serves as the Chief Executive Officer, the Board of Directors shall, at its first meeting following the replacement, appoint a new Chief Executive Officer from amongst the Appointed Directors.
5.6 (a) Every second year, at a time to coincide with the Annual General Meeting referred to in Clause (6.1), the Secretary of PDE shall arrange for an election to be held to determine the Elected Directors for the following 2 (two) year term.
(b) Any Individual Member in good standing and not disqualified under Clause (5.2) shall be eligible to stand as a candidate for the office of Elected Director, provided his candidacy is proposed by an Individual Member in good standing, and seconded by at least one Individual Member in good standing, provided that such nomination is received in writing by the Secretary not less than 5 (five) working days prior to the election date.
(c) The election for Elected Directors shall be conducted by a ballot amongst those Individual Members attending the Annual General Meeting.
5.7 The first Board of Directors of PDE comprising of seven (7) persons shall be appointed by Panama Diamond Exchange S.A., and shall serve for a period of two years commencing from the date of appointment thereof.
5.8 All resolutions of the Board of Directors shall be determined by simple majority, unless otherwise specified in these By-Laws. All decisions adopted by the Board of Directors shall be by an open ballot, unless any two members of the Board of Directors call for a secret ballot. The Members of the Board of Directors shall at their first meeting elect a Chairman and a Vice Chairman from amongst themselves. The Chairman shall not have the right to exercise a casting vote at meetings of the Board of Directors.
5.9 Meetings of the Board of Directors shall be held at such a place and hour as the Board of Directors may determine. Special meetings of the Board may be called at any time by the Chief Executive Officer, Chairman of the Board or upon written request by a majority of members of the Board of Directors, upon 7 (seven) business days’ written notice to each member of the Board of Directors.
5.10 The Board shall be authorized to:
(a) Hold meetings at such times and places as it may deem proper;
(b) Appoint committees, on particular subjects, from amongst its members and other members of PDE;
(c) Devise and carry into execution such other measures as it may deem proper to promote the objectives of PDE and to best protect the interest and welfare of the members;
(d) Cooperate with governmental agencies in all matters concerning the diamond, precious stone and related jewelry industry;
(e) Fine, suspend or terminate any member or group of members;
(f) Adopt rules and regulations, consistent with these By-Laws, for the management and conduct of PDE;
(g) Delegate any of its powers to any member of the Board of Directors or to any committee of such members.
5.11 Should any member of the Board of Directors fail to attend three consecutive meetings of the Board, the Secretary shall send him a written notification in respect thereof, and unless the said member shall provide an excuse satisfactory to the Board of Directors justifying his absence, the Board of Directors shall declare his office vacant and elect his successor as provided in these By-Laws.
5.12 The Chief Executive Officer shall be appointed by the Board of Directors from amongst the Appointed Directors. The Chief Executive Officer shall have all the authority required to manage and act on behalf of PDE as specified in these By-Laws. The authority of the Chief Executive Officer shall include, but not be limited to, the following:
(a) Managing the day-to-day operations of PDE;
(b) Negotiating and signing all types of contracts, transactions, arrangements and dealings with third parties in the name of and on the behalf of PDE;
(c) Employing all persons as may be required by PDE and to determine their salaries and benefits, as well as other terms and conditions of such employment, and shall be entitled to terminate such employment;
(d) Opening, operating and closing all bank accounts in relation to PDE and conducting all dealings with banks and financial institutions and to sign all applications and documents for such purposes and to obtain credit facilities and loans required for PDE to achieve its objectives;
(e) Determining the financial planning of PDE;
(f) Pledging, mortgaging and otherwise charging the assets of PDE for the purposes of raising and providing the financial facilities deemed necessary by the Board of Directors;
(g) Paying all costs, charges and expenses related to PDE and giving receipts and discharges in respect of any amount paid to PDE;
(h) Suing on behalf of PDE, attaching properties of debtors, referring cases to arbitration, appointing lawyers and otherwise taking all legal measures to protect the interests of the Company whether as plaintiff, respondent, party to arbitration or otherwise;
(i) Representing PDE and signing on its behalf, without limitation, before all governmental offices and departments;
(j) Delegating all or part of his powers, as he shall deem fit.
The Chief Executive Officer shall exercise the powers and authorities listed above in accordance with the general policies determined by the Board of Directors.
5.13 The Board shall appoint a Secretary who shall record or cause to be recorded all votes and minutes of all proceedings in books to be kept for that purpose. The Secretary shall cause proper notice to be given of all the meetings of the Board of Directors and committees. The Secretary shall have charge of the general secretarial work of the various committees and of the PDE.
5.14 No official of PDE, in the due and correct performance of his/her official duties, shall be held responsible in any manner whatsoever for any decisions or be subject to any legal actions for decisions or actions taken on behalf of PDE.
5.15 The Board of Directors shall establish several standing committees to assist it and the Chief Executive Officer in the discharge of their responsibilities. The Chairman and CEO are ex-officio members of all committees. Initially PDE shall have the following committees with members from the Board of Directors or members in good standing of PDE, appointed from time to time by the Board of Directors.
(a) The Membership Committee, which shall consist of at least three members of PDE and be responsible for examining and assessing applications submitted by individuals and entities for membership with PDE including interviewing such applicants, and providing the Board of Directors with recommendations in respect thereof. The Membership Committee may, in its complete discretion, request any member at any time to resubmit current information relating to the matters referred to in sub-clause (3.2.2 (g) or (3.2.3 (e), as the case may be.
(b) The House Committee, which shall consist of at least three members of PDE and shall be responsible for supervision of all the assets of PDE, exclusive of financial assets and for supervision of all facilities of PDE offices.
(c) The Floor Committee, which shall consist of at least three Individual Members of PDE and shall have the authority to temporarily exclude a member from entering PDE trading room for a period not exceeding 5 (five) days subject to the Board of Directors ratification, and/or to fine a member up to the sum of $1000 USD and/or to recommend to the Board of Directors to institute disciplinary proceedings against a member where a member causes a disturbance or conducts himself/herself in PDE trading room in a manner unbecoming of a member of PDE.
(d) The Business Development Committee, which shall consist of at least three Individual Members of PDE and shall develop strategies and plans to execute PDE mission, to identify opportunities for the business development of PDE and to contribute to developing an effective network for PDE.
5.16 Special meetings can be called when deemed necessary, and shall consist of a minimum of five (5) directors.
5.17 At the board of directors meetings, a quorum shall consist of 5 (five) directors.
ARTICLE (6): Meetings of the Members
6.1 There shall be an Annual General Meeting of the membership of PDE during the first quarter or each year for the rendering of annual reports of the Board of Directors and the appointed auditor, for declaration of the result of the election of the Elected Directors, if required, and for such other matters of which notice has been given. At all meetings, except as otherwise stated in these By-Laws, a resolution may be passed by a majority of the votes cast at such meetings.
6.2 Special general meetings of the membership may be called by:
(a) Chairman of the Board;
(b) The Chief Executive Officer; or
(c) The Board of Directors, by resolution at a duly convened meeting or upon the written request of a majority of the Board of Directors; or
(d) By petition to the board of directors bearing the signatures of 45% of individual members verified by the Secretary of PDE. The Board of Directors will then decide if a meeting is required.
6.3 An Inaugural Annual General Meeting shall be held as soon as is convenient following the establishment of PDE to elect the Members of the Arbitration Committee referred to in Article (7) of these By-Laws
6.4 Special general meetings shall be called only to consider a specific subject, which must be stated in the notice of the meeting.
6.5 Whenever notice is required to be given to any member, except as provided for herein, such notice shall be deemed to have been given from and at the time, when said notice, in writing, shall have been sent to the member by hand against receipt, or by certified mail, return receipt requested, addressed to the member at his/her latest known place of business or residence, as the same shall appear upon the books of PDE. It shall be the responsibility of each member to report in writing any change of address and phone number of his/her business and residence to the Secretary.
6.6 At all meetings of the general membership, a quorum shall consist of 40% of the individual membership of PDE. If there shall be no quorum at a duly called meeting, then a second meeting shall be duly called within ten days thereafter. At such second meeting, all business may be transacted when there is a quorum of 20%. At general meetings the Chairman shall not have the right to exercise a casting vote.
ARTICLE (7): Arbitration Committee and Arbitration Procedures
7.1 Arbitration Committee
7.1.1 An Arbitration Committee shall be established consisting of five (5) Individual Members of PDE in good standing who shall be elected to hold office as such by members at the Annual General Meeting and who have been nominated in writing not less than Five (5) working days prior to the Annual General Meeting by an Individual Member proposing and an Individual Member seconding, both of whom shall be entitled to vote.
7.1.2 Such candidates for election shall be listed on a ballot paper which shall be issued to each Individual Member present at the Annual General Meeting and entitled to vote.
7.1.3 An Individual Member shall not cast a number of votes greater than 5 (five) and shall not be entitled to allocate more than 1 (one) vote to any candidate and in the event that he does so his ballot paper shall be deemed to be spoilt and the votes cast shall be disallowed.
7.1.4 The Five candidates securing the highest number of votes shall be deemed and declared to be elected.
7.1.5 Two representatives appointed by the Meeting shall count the ballot papers and their decision shall be final.
7.1.6 Where there is a tie between two or more candidates and there are insufficient vacancies in respect of such candidates, a further ballot shall be taken in order to select the number of persons required from those tied as aforesaid.
7.1.7 The Five members elected shall hold office until the Annual General Meeting in the second year following their election, subject to their completing any Arbitration proceedings in progress.
7.1.8 If for any reason whatsoever there are less than five candidates standing for election then:
(a) All such persons shall forthwith be declared elected, and
(b) In respect of the shortfall, such Annual General Meeting shall be entitled notwithstanding anything to the contrary contained herein, to appoint eligible Individual Members to hold office or to authorize immediate nominations for a further ballot or to authorize the Board of Directors to fill such shortfall by co-option.
7.1.9 The Secretary shall not less than five (5) working days before the date of the Annual General Meeting post on the PDE notice board a list of candidates for election to the Arbitration Committee.
7.1.10 The Board of Directors shall appoint a Chairman from the members elected to the Committee. The Chief Executive Officer may not be elected to the Arbitration Committee.
7.2 Arbitration Proceedings
7.2.1 The function of the Arbitration Committee shall be to act as arbitrators for the purpose of determining disputes as more fully set out hereunder.
7.2.2 Any member who alleges a dispute with another member may request arbitration by lodging in writing with the Secretary details of such dispute and the relief sought against the other member. The Secretary shall notify the Chief Executive Officer thereof and he in turn may in conjunction with one Elected Director instruct the Secretary to refer the dispute to the Chairman of the Arbitration Committee who shall convene a meeting of the Committee, where at least 3 (three) members shall be present to consider the matter. Should any non- member of PDE allege a dispute with a member the Secretary shall refer the matter to the Board of Directors in accordance with sub-clause (7.3.4) below.
7.2.3 At the said meeting of the Arbitration Committee, the Committee shall decide whether a prima facie case exists, and if not, the Secretary shall in writing advice the member who may not proceed with his dispute. If the Committee decides that a prima facie case exists it shall then decide whether or not to refer the dispute to be heard in accordance with PDE arbitration procedures. If it decides not to so refer, the Secretary shall in writing inform both the complainant member, who may thereafter take such legal action as he wishes, and the defendant member. Such decision by the Committee shall be binding.
7.2.4 Should the Committee decide to refer the dispute to arbitration:
(a) A date for the hearing may be fixed (or subsequently fixed by the Committee Chairman if not then convenient).
(b) An arbitration panel of 3 (three) Committee members may be fixed (or subsequently fixed by the Committee Chairman if not then convenient).
(c) A referee shall be selected unless the Committee instructs the Committee Chairman to select a Referee.
7.2.5 The Secretary shall in writing inform the complainant member of the decision of the Committee and shall further inform him:
(a) Of his right to submit to a Referee in accordance with PDE By- Laws in an Endeavour to settle the dispute and of his duty to discover timeously any documents or objects relevant to the proceedings;
(b) Of the date of the hearing and the names of the proposed arbitrators in respect of whom he shall have the right to object without cause to the appointment of any one such arbitrator which right may be exercised only once;
(c) Of his right to request the dismissal of any one arbitrator on good cause shown to the Committee whose decision thereon shall be final and binding;
(d) Of any defense or counterclaim lodged by the defendant member when same is received;
(e) Of his duty to discover timeously any objects or documents relevant to the matter in dispute.
7.2.6 The Secretary shall in writing inform the defendant member:
(a) Of the dispute and the relief sought;
(b) Of the Committee’s decision to refer the dispute to arbitration and of his duty to discover timeously any documents or objects relevant to the proceedings;
(c) Of his right to submit to a Referee in accordance with PDE By-Laws in an Endeavour to settle the dispute;
(d) Of his duty to lodge in writing his defense in the dispute and details of any counter claim that he may have;
(e) Of the date of the hearing and the names of the proposed arbitrators, in respect of whom he shall have the right to object without cause to the appointment of any one such arbitrator which right may be exercised only once;
(f) Of his right to request the dismissal of any arbitrator on good cause shown to the Committee whose decision thereon shall be final and binding;
(g) Of his duty to discover timeously any objects or documents relevant to the matter in dispute.
7.2.7 In cases of urgency the Committee or the Arbitration Panel shall be entitled to dispense with the above procedures provided that no parties are prejudiced in the conduct of the arbitration.
7.2.8 In the temporary absence of a member of the Committee the Board of Directors shall be entitled to appoint one of its members to fill such position temporarily.
7.2.9 Any member, including the arbitrators, who participates in an arbitration hearing in any capacity, shall be required and undertakes to keep all the proceedings secret.
7.2.10 No legal representation at an arbitration hearing shall be allowed to any party unless:
(a) He shall have applied timeously for the right to have such representation;
(b) The Arbitration Committee considers in its sole and absolute discretion that the nature or complexity of the matter in dispute warrants such representation, in which event all parties shall be entitled to such representation.
7.3.1 Every member of PDE shall be deemed by virtue of his being such to have submitted himself to the reference to and decision by the Arbitration Committee of any dispute as if he had signed a Deed of Submission to the arbitration and decision by the Committee. He shall be deemed to have consented to the arbitration being held in the Republic Of Panama.
7.3.2 A member of PDE who institutes legal proceedings against any other member of PDE concerning a dispute that should have properly been referred to PDE for arbitration and which legal proceedings have not been authorized as contemplated by Clause (7.2.3) above shall himself be guilty of a breach of these By-Laws and shall be liable to disciplinary action. A member against whom such legal proceedings have been instituted shall have and retain all his rights to have the dispute dealt with as contemplated by these By-Laws.
7.3.3 The nature of any dispute which shall be submitted to arbitration shall be any dispute between members (defined as in sub-clause (7.3.2) above) arising from or forming part of any transaction or negotiation or act or omission howsoever connected directly or indirectly with or relating to the diamond of precious stones or related jewelry industry, trade or undertakings.
7.3.4 Notwithstanding anything hereinbefore contained the Board of Directors shall be entitled in its discretion to apply the provisions of these By-Laws to a dispute alleged and relief sought by a non-member of PDE against a member who has consented in writing for such dispute and relief sought being referred to PDE.
(a) This provision shall be deemed to be a stipulation for the benefit of such non-member and in the event of this provision being applied; such non-member shall acknowledge in writing that he agrees to be bound by the terms of these By-Laws and the Arbitration proceedings.
(b) The Board of Directors or the Committee or the Arbitration Panel may levy such charges against such non- member as it deems fit and may require any or all of such charges to be deposited in advance.
7.3.5 The Arbitrators may make use of legal or other expert assistance in the discharge of their duties, provided always that having obtained such assistance they exercise their own independent judgment on all matters including that in respect of which they sought assistance, and insofar as costs are incurred in seeking such assistance, they may make a suitable award to cover such costs.
7.3.6 Save as herein provided, Arbitration proceedings are subject to the relevant laws of the Republic Of Panama.
7.3.7 The Arbitrators shall determine the process to be followed in the presentation and adjudication of any dispute provided always that the process to be followed is fair and affords each party an adequate opportunity to state his case.
7.3.8 The decision of the arbitrators shall in any dispute be final and binding upon the parties there to. They, PDE nor any of its officials shall be liable to any party for any act or omission relating to an arbitration proceeding or the performance of any functions or duties there under.
7.3.9 Each member shall be bound by the arbitration rules of the WFDB and in particular Article (4) of its Inner Rules, and where required by local laws, subject to the mutual binding of a member of another bourse likewise being so bound.
ARTICLE (8): By-Laws
8.1 These By-Laws may be amended only by proposals submitted to the Board of Directors, and recommended by the Board of Directors to a general meeting of members. In order for such an amendment to take effect it must be approved at such general meeting by not less than two-thirds of the members present and entitled to vote. A quorum at any meeting called for such purpose shall be 25% of the membership. If such Quorum is not present, then another meeting shall be called as herein provided. At such second meeting, any amendment may be passed by a two-thirds vote of the members present and entitled to vote.
8.2 Any proposed amendment of these By-Laws, must be posted on the PDE notice board for a period of 14 (fourteen) days prior to the meeting at which it is to be considered.
ARTICLE (9): Dissolution
PDE may be dissolved:
(a) By a decision of the Board of Directors of Panama Diamond Exchange S.A., based upon the recommendation of the Board of Directors of PDE; or
(b) At a duly called special general meeting. Notice of said meeting must be sent to each member in good standing by hand against receipt, or by certified mail, return receipt requested. PDE shall be considered dissolved if 80% of the membership at this meeting shall signify, by written ballot, their consent to dissolve. In the event that PDE is dissolved, all assets of PDE shall be converted into cash and shall be distributed as ordered by the outgoing Board of Directors.
ARTICLE (10): Restraint of Trade
PDE shall not adopt any resolution, rule, regulation or By-Laws, which illegally attempts to restrain trade or violate the law.
ARTICLE (11): Visiting Dealers
11.1 The Board of Directors may determine rules and procedures that shall govern the conditions on which Visiting Dealers may be permitted to enter the PDE trading floor.
11.2 There shall be no restrictions on trade with members of any WFDB affiliated bourses. These members will be allowed access to the bourse premises and trade floor.
ARTICLE (12): Other Issues
12.1 Issues not covered by the provisions of these By-Laws may be addressed and regulated by regulations issued by the Board of Directors to be published at the head office of PDE.