22 October 2007
General Assembly
GA/L/3324

Department of Public Information • News and Media Division • New York

Sixty-second General Assembly

Sixth Committee

11th Meeting (AM)


SIXTH COMMITTEE SPEAKERS APPLAUD WORK OF UNCITRAL ON STEPS

 

TO REMOVE LEGAL OBSTACLES TO INTERNATIONAL TRADE

 


Adoption of Legislative Guide on Secured Transactions

Said to be Highlight of Commission’s Initial 2007 Session


The Sixth Committee (Legal) this morning hailed the work of the United Nations Commission on International Trade Law (UNCITRAL) in removing legal obstacles to international trade law as it examined the report of the first part of the Commission’s 2007 session.


The highlight of that session ( Vienna 25- 12 July 2007) was the adoption of the main body of the Legislative Guide on secured transactions which deals with agreements between a credit institution and a business or individual, including consumers.  The Guide covers security interests in a wide array of assets such as goods, equipment, bank accounts and bank accounts, in a range of financing transactions such as inventory and equipment financing.


Introducing the Commission’s report, Kathryn Sabo, one of its Chairpersons, said the Guide would assist countries in modernizing security interest laws, so as to increase access to credit and provide businesses with an alternative source of affordable credit.  A specific guide on intellectual property rights as related to security rights would be developed by the working group on the topic.  She said the finalization of the guide would be completed at the Commission’s resumed session ( Vienna, 10-14 December 2007).


She also said the Commissioner’s work on e-procurement was well advanced with the issue of conflicts of interest now on the list of topics to be considered in connection with the Commission’s recommendations on meeting requirements of the United Nations Convention Against Corrupt Practices


The representative of Norway, speaking also for the other Nordic countries ( Denmark, Sweden, Finland and Iceland), said the achievements recorded in the reports showed that extended cooperation and awareness in the field of international trade law was a key to success in global trade and economic development.  The Commission had obtained significant results in the field of secured transactions, such as the adoption of a major part of its draft text on legislative guide on secured transactions.  The UNCITRAL Arbitration Rules should be amended to promote greater efficiency.  The revision of the Commission’s Model Law on Procurement of Goods, Construction and Services was also an important step forward, as was the development of a new international transport convention with multi-modal applications.


The representative of China said UNCITRAL should complete its work on the Legislative Guide by the end of the year and should finish, as soon as possible, the third reading of the Draft Convention on Transport Law, with a view to adopting it at the 2008 annual session.  He said those two instruments would help Member States adopt new and unified rules in the fields of international financing and international trade and transportation.  He said UNCITRAL was playing an increasingly important role in formulating legal rules on international trade.  His Government would continue to support it.


Also speaking this morning were the representatives of India, Singapore, Austria, Morocco, Guatemala, Thailand, Indonesia, Malaysia, Belarus, Sri Lanka, Pakistan, Australia, Nigeria, Japan, Mexico, United States, United Kingdom, Canada, France, Kenya, Russian Federation and Italy.


The 60-member United Nations Commission on International Trade Law (UNCITRAL), established more than 40 years ago, is the core legal body of the United Nations system in the field of international trade law.  Its mandate is to remove legal obstacles to international trade by progressively modernizing and harmonizing trade law.  It prepares legal texts in a number of key areas such as international commerce dispute settlement, electronic commerce, insolvency, international payments, sale of goods, transport law, procurement and infrastructure development.  It also provides technical assistance form activities.


The Committee will meet again at 10.00 a.m. tomorrow, Tuesday, 23 October, to take up the question of transboundary harm, and also with the related question of State responsibility for internationally wrongful acts.


Background


The Sixth Committee (Legal) met today to take up the report of the United Nations Commission on International Trade Law (UNCITRAL) on the work of its fortieth session, held in Vienna from 25 June to 12 July, as well as to consider the prevention of transboundary harm from hazardous activities and the allocation of loss in the case of such harm.


Before the Committee is the Commission’s report (document A/62/17, Part I) on the first part of its fortieth session.  It states that the Commission’s resumed fortieth session would be held from 10 to 14 December in Vienna.


Further, the report contains a record of the Commission’s consideration of the draft UNCITRAL Legislative Guide on Secured Transactions, which was adopted during the first part of its session.  The Commission’s Working Group VI on “Security Interests” would now prepare an annex to the Guide specific to security rights in intellectual property, since a significant part of corporate wealth was embodied in intellectual property assets.  The annex would supplement the Guide by providing specific guidance to States as to the appropriate coordination between secured transactions and intellectual property law.  International experts would be requested to participate in preparing the annex.


In other action on the Guide, the report states that the Commission would review the terminology at its resumed session and would defer until that time the question of whether the definitions and recommendations of the Guide should be reproduced in a separate annex along with the relevant chapter of the commentaries.  An annex would also be prepared with respect to securities, and proposals on financial contracts would be considered at the resumed session.


On other matters, the report states that Working Group I on Procurement had decided to add conflicts of interest to the list of items to be considered with regard to revising the Model Law and Guide on procurement.  Working Group II on “Arbitration and Conciliation” decided that any revision of the UNCITRAL arbitration rules should not alter the structure of the text, its spirit or its style.  The flexibility of the text should be respected and the list of topics to be revised should be carefully defined.  It was also decided that the final review and adoption of the Rules would occur no later than 2009.


Also, according to the report, the Commission was informed that 2008 would mark the fiftieth anniversary of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done in New York on 10 June 1958 (the “New York Convention”).  The Commission was asked to monitor the many conferences being held to commemorate the anniversary and to make full use of the opportunity to encourage further treaty actions.  Among the events would be a one-day conference on 1 February 2008 in New York, sponsored jointly by the United Nations and the International Bar Association.


Further considered during the Commission’s session was the report of Working Group III on “Transport Law,” according to the report.  It states that the convention on the carriage of goods by sea was expected to be completed by the end of 2007 for consideration by Governments and adoption in 2008.  Working Group V on “Insolvency Law,” involved in preparing an Insolvency Guide and the UNCITRAL Model Law on Cross-Border Insolvency, had decided to include consideration of corporate groups in its work.


Another matter taken up during the session, according to the report, was the Commission’s future work in the area of electronic commerce, in which a sample chapter on cross-border commerce had been prepared for possible development of a comprehensive guide for the use of Governments and legislators on the matter.  In the area of commercial fraud, work on indicators continued and collaboration with the United Nations Office on Drugs and Crime was further considered with respect to commercial and economic fraud.  Activities also continued on monitoring implementation of the New York Convention.  The ‘Unidroit Principles of International Commercial Contracts’ completed in 2004 were endorsed.  Technical assistance and cooperation was considered.


Finally, the report contains an update on the status and promotion of UNCITRAL legal texts and on coordination and cooperation activities with other bodies.


Turning to the issue of transboundary harm, the Committee would base its consideration on the Assembly having commended to Governments in 2006 a set of draft principles on “prevention of transboundary harm from hazardous activities and allocation of loss in the case of such harm”.  The principles are part of the International Law Commission’s work related to the elaboration of a convention on “international liability in the case of loss from transboundary harm arising out of hazardous activities”, which in turn is part of the Commission’s study of “international liability for injurious consequences arising out of acts not prohibited by international law” under the broad category of “international liability for injurious consequences arising out of the performance of other activities”.


Introduction of the UNCITAL Report


The Vice-Chairperson of UNCITRAL, KATHRYN SABO ( Canada), presented the Commission’s report.  Also present was the Commission’s Secretary, JERNEL SKOLEC.  The two of them represented the Commission Chairman, DOBROSAV MITROVIC ( Serbia).


The finalization of the draft UNCITRAL Legislative Guide on secured transactions had been the main focus of the Commission’s agenda, Ms. Sabo said.  Adoption had already begun and would be finished at the resumed session in December.  The Guide would assist countries in modernizing security interest laws, so as to increase access to affordable credit and provide businesses with an alternative source of affordable credit.  Working Group VI on “Security Interests” would now develop a specific Guide on intellectual property rights as related to security rights.


Moving on to the rest of the Commission’s work during the first part of its session, she said the work on e-communications procurement was well advanced, with the issue of conflicts of interest now on the list of topics to be considered in connection with the Commission’s recommendations on meeting requirements of the United Nations Convention Against Corruption.  The Working Group would now turn its attention to another procurement technique increasingly used in an electronic format, the framework agreement or indefinite-delivery-indefinite-quantity contract.


Stating she was impressed at the rapid progress made in revising the UNCITRAL Arbitration Rules, she noted the fiftieth anniversary of the “New York Convention” and said future work in the field of settling commercial disputes should address the question of “arbitrability”.  Online dispute resolution and the implications of electronic communications should be considered in context of revising the UNCITRAL Arbitration Rules.


On transport law, she said she was pleased to report that the draft convention on international carriage of goods by sea was expected to be presented to the Commission in 2008.  Also, the UNCITRAL Legislative Guide on Insolvency Law and the UNCITRAL Model law on Cross-Border Insolvency provided a sound foundation for the modernization of insolvency law.  There were now provisions related to corporate groups.


And on reviewing UNCITRAL’s future activities in electronic and commercial fraud, she said a sample chapter towards a comprehensive guideline had been presented to the Commission.  The Commission secretariat had been requested to follow legal developments in the area of commercial fraud, which was considered to be one of the greatest threats of the present time.  Often having an international character, the activity posed an obstacle to international trade and had a negative effect on the stability of national economies.


While fraud was most commonly viewed as a criminal offence, she said, the Commission had been requested to assist in activities aimed at prevention because of UNCITRAL’s unique perspective.  A document on common features of typical fraudulent schemes had been prepared and would be circulated to Governments.  UNCITRAL had also collaborated with the United Nations Office on Drugs and Crime, in preparing a study on crimes related to fraud and criminal misuse and falsification of identity.


Reviewing the issues covered in the rest of the Commission’s report, she drew attention to a matter related to the Commission’s work that was also on the Committee’s agenda, the item on the rule of law at the national and international levels.  She said she hoped the work would lead to comprehensive and coherent approaches within the United Nations system to promoting the rule of law.  Particularly in post-conflict situations, the current sporadic and fragmented approaches to the subject did not achieve sustained results.  The current primary focus on transitional justice should not overshadow long-term measures and the economic dimension of the challenge.  A foundation for long-term stability had to be laid down before a culture based on the rule of law could thrive.  That was where UNCITRAL’s activities and resources were relevant in commercial law reforms.


INGER HOLTEN (Norway), speaking also for the other Nordic countries (Denmark, Sweden, Finland and Iceland), said the achievements recorded in the reports showed that extended cooperation and awareness in the field of International Trade Law was a key to success in global trade and economic development.  The Commission had obtained significant results in the field of Secured Transactions, such as the adoption of a major part of the draft UNCITRAL Legislative Guide on Secured Transactions.  The remainder of the draft should be adopted this year and UNCITRAL Arbitration Rules should be amended to promote greater efficiency.  The revision of the model Law on Procurement of Goods, Construction and Services was also an important step forward, as was the development of a new international transport convention with multi-modal applications.


He said the Insolvency Guide and the UNCITRAL Model Law on Cross-Border Insolvency were effective tools that should be strengthened and not replaced.  The rapid development of global trade and commerce necessitated a modern and innovative approach towards international lawmaking.  The Modern Law for Global Commerce conference in celebration of the 40th annual session of UNCITRAL provided important inputs in that respect and provided analyses on a series of complex issues within the sphere of international trade law.  Discussions on more general topics, such as the process and methods of international rule-making, were also very valuable.


SUBHASH MAHARIA (India) welcomed the progress made by the Commission at its fortieth session in July, and said a second annex on the draft Guide on security rights in intellectual property would be an important addition to the subject, since a significant part of corporate wealth was included in intellectual property assets.  He also said the Commission’s Working Group on Arbitration should adopt a generic approach applicable to all types of arbitration, rather than a dispute-specific approach.  He welcomed the comprehensive review of the Commission’s working methods, and supported inclusiveness and transparency.


MARCUS SONG ( Singapore) reiterated the important work UNCITRAL was doing through its technical assistance programmes, noting that only Singapore and one other country had contributed to them.  UNCITRAL had noted at its last session that its continuing ability to participate in those programmes depended on the availability of funds.  The programmes ensured that UNCITRAL’s work in the field of international trade law could be enjoyed by all States.


He said that UNCITRAL’s important achievement was the successful completion of the United Nations Convention on the Use of Electronic Communications in International Contract.  Singapore was privileged to have played an important role in the formulation of that instrument.  He commended UNCITRAL’s Secretariat and its Director, Jernej Sekolec, who would be retiring shortly, for their contributions to UNCITRAL’s work and in assisting United Nations organs and other bodies in matters relating to international trade law.  He said that Singapore strongly supported UNCITRAL and its work to facilitate international trade.


KONRAD G. BÜHLER ( Austria) said that over the past 40 years UNCITRAL, through its manifold activities, had significantly contributed to the strengthening of the rule of law both at national and international levels.  Austria commended the Commission for the progress achieved so far and looked forward to the finalization of the draft Legislative Guide on Secured Transactions at the second part of its fortieth session in December.  While Austria supported proposals on the review of the Commission’s working methods, it should be done carefully to uphold the traditional principles of efficiency, flexibility, equality, as well as of consensus in the Commission’s work.


He informed delegations that Austria had again offered to serve as coordinator for the two annual UNCITRAL draft resolutions.  This year’s draft omnibus resolution on UNCITRAL’s report and a draft resolution highlighting the 50th anniversary of the 1958 New York Convention had been circulated to all Permanent Missions last Friday.  Austria continued to attach the highest importance to UNCITRAL’s work and, as in the past, would continue to support it and its Vienna-based Secretariat, he stated.


KARIM MEDREK ( Morocco) welcomed the Commission’s work on secured transactions and said the guidelines were an important instrument for trade.  The Model Law on Procurement had become an important instrument for markets that would benefit from an update in areas such as public procurement.  The Working Group should continue to revise the Model Law at a speedier pace while Working Group II on Arbitration should focus on a broad generic treatment of the subject, rather than becoming too specific, so that the instrument could be adopted by 2009.


He said his country was planning a number of events to mark the fiftieth anniversary of the New York Convention.  The planned International Bar Association event in February would be welcome.  The complexity of the transport by sea convention made it advisable for the Working Group to invite and hear views on approaches to the handling of the subject.  The work on commercial fraud should continue in collaboration with the Drug and Crime Office since fraud was mostly a criminal matter.  With regard to the Commission’s work, consensus was a hallmark of decisions but minority views should be taken into consideration.  And since technical assistance in law reform was critical for economic development, all should ensure the secretariat’s ability to meeting the needs of developing countries by contributing to the Trust Fund.


ANA CRISTINA RODRIGUEZ-PINEDA ( Guatemala) said her country followed UNCITRAL’s work and those of its working groups with great interest.  It was making significant changes in its laws relating to some of the Commission’s instruments.  Currently the Guatemala National Congress had before it a draft law based on the Commission’s Legislative Guide on Secured Transactions.  More information was required on the text.  Her country was interested in the issue of security rights in intellectual property, which had not been sufficiently developed by the Commission.  She took note of the work being done on the revision of UNCITRAL Arbitration Rules and said her country hoped to have the opportunity to examine it in detail.  Guatemala was interested in the Commission’s coordinating role in relation to the activities of other international organizations in the field of international trade law.  It supported the dialogue and exchange of information with those bodies on commercial fraud.


She expressed concern that UNCITRAL’s two trust funds lacked sufficient funds and urged States to contribute to them.


WANG CHEN ( China) said UNCITRAL should complete its work on the Legislative Guide on Secured Transactions by the end of 2007 and should finish, as soon as possible, the third reading of the Draft Convention on Transport Law, with a view to adopting it at the 2008 annual session.  Those two instruments would help Member States adopt new and unified rules in the fields of international financing and international trade and transportation.  The Modern Law for Global Commerce conference had facilitated an exchange of views on the current status of international rules formulated by international organizations and on national commercial legislation and its implementation.  Such meetings improved understanding and implementation of the legal instruments on international commerce and should continue to be held in the future.


He said UNCITRAL was playing an increasingly important role in formulating legal rules on international trade.  His Government would continue to support UNCITRAL in that role both nationally and internationally.  In particular, it planned to take part in activities to commemorate the 50th anniversary of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards which fully reflected the indispensable role of UNCITRAL in unifying the legal rules on international trade.


PHUCHPHOP MONGKOLNAVIN ( Thailand) said globalization had triggered an unprecedented scale of international trade, which was fundamental for growing economic prosperity, sustainable peace and development domestically and internationally, so it was both necessary and important for the gradual harmonization of national laws to catch up with the development of economic cooperation.  Thailand praised the work of UNCITRAL for its contribution to the development of current international trade practice and jurisprudence, including its working groups on revising its model law on the procurement of goods, on transport law and especially on insolvency.  He noted that Thailand was currently developing an insolvency regime in line with the Commission’s legislative guide on insolvency law and Model Law on Cross-Border Insolvency.


ADAM MULAWARMAN TUGIO ( Indonesia) said that e-commerce could help increase the scale and efficiency of commercial transactions, but noted that the digital divide thwarted the development of such commerce for some people.  The Commission on International Trade Law should take that into account when developing laws covering Internet use in international trade transactions. The Commission should also look into the negative aspects of e-commerce, such as the risk of cyber fraud arising from “spam” and other cyber crimes, in its study on the indicators of commercial fraud.  It should strengthen its cooperation with the United Nations Office on Drugs and Crime (UNODC) on that matter.


Noting that the Commission’s model laws had served as legal reference in various countries when creating trade cooperation frameworks, he said he hoped the Commission would offer more technical assistance to developing countries to the same end.  Indeed, such assistance would complement the Commission’s positive efforts in disseminating case laws through the Case Law on UNCITRAL Texts (CLOUT) system.  Furthermore, developing countries often lacked the resources, capacity and technical know-how to quickly ratify the Commission’s model laws, or to harmonize national laws with those model laws.  He said help must also be extended to developing countries, so that they could participate equally in the Commission.  With regard to the Committee’s consideration of the proposal to improve the Commission’s decision-making process -- which he noted would involve reviewing the practice of consensus in decision-making -- he underscored the need for the Committee’s deliberative process to be inclusive and transparent.


NOOR RUWENA MOHD-NURDIN ( Malaysia) said her country was a major producer and exporter of primary commodities and manufactured goods, and was also a new member of the Commission.  Countries such as hers relied substantially on external trade for growth and progress, and UNCITRAL’s work in harmonizing and unifying international trade law was highly regarded and important.  Her country was participating in the Working Groups on Arbitration and Conciliation, Security Interests and Government Procurement.  The work on the amendment to the UNCITRAL Model Law regarding interim protective measures was also of special interest.  UNCITRAL instruments were an important basis for developing national legislation, particularly in the area of e-commerce where the UNCITRAL Model Law on Electronic Commerce clarified certain principles in determining how to meet traditional paper-based requirements through e-commerce techniques.    


VIKTAR SHAUTSOU ( Belarus) said the legislative guide on secured transactions would be very useful for balancing out current discrepancies in the global market.  The activities of Working Group I on “Procurement” were also of interest to his country, which had adopted a presidential decree with regard to procurement and had adopted an electronic system for registering all transactions in that area.  A method for out-of-court dispute resolution method had been introduced to cut down on costs and time involved in litigation, but there was concern about corporations resorting to extrajudicial processes in relevant situations. 


Welcoming the progress made by Working Group III on “Transport Law”, he said the convention being elaborated would benefit both his country’s naval force and its diversification in exporting goods.  Working Group V on “Insolvency Law” should make sure in its deliberations that the rights of all parties were taken into consideration.  The instrument on insolvency should be revised to normalize the law.  Finally, e-commerce allowed for a reduction in the costs of global trade but e-commerce could not function without the appropriate infrastructures and laws.  Legal barriers to trade should be removed and a convention on electronic trade should be elaborated.


A.L. ABDUL AZEEZ ( Sri Lanka), said the continuing ability of the United Nations Commission on International Trade Law to engage in technical cooperation and assistance in response to specific requests by Member States was essential to attain its harmonizing goals.  However, the inability to respond to countries’ requests because of the exhaustion of funds in the UNCITRAL Trust Fund for Symposia had the potential to hamper the work of the Commission.  Sri Lanka urged Member States to address this issue with the utmost immediacy.


Furthermore, he said, while the UNCITRAL arbitration rules had been successful and formed the basis for many of the Member States’ own arbitration laws, they had not been modified since their adoption in 1976 and, taking into account recent developments, they needed modernization, particularly with regard to investor-State disputes.  However, changes should not alter the structure of the text, its spirit or drafting style.  Those changes must also respect the flexibility and simplicity of the text.  UNCITRAL’s conventions and model laws had unified and vigorously promoted international trade, and the 40th anniversary of the Commission was a prudent time to re-evaluate its work to achieve further success.


SARDAR JAMAL KHAN LEGHARI ( Pakistan) said his country supported the key objectives of the UNCITRAL draft legislative guide on secured transactions, including promotion of secured credit.  However, it saw an inherent imbalance in promotion and enforcement of a creditor’s rights in a predictable and efficient manner as compared to the rights of other parties.  UNCITRAL’s recommendations had adequately covered priority of a security right as against the rights of competing claims.  He said the recommendations would provide the basis for an efficient and predictable regime to determine the priority of a security right as against competing claims.  They would facilitate transactions by which a grantor could create more than one security right.   Pakistan supported a contractual obligation as a basis for creation of a security right.


He expressed appreciation for the progress the Commission had made in the area of insolvency law, and said the noteworthy agreement reached in its working group on the topic provided a sound basis for the unification of insolvency law.  He also commended the work done by the Commission in the preparation of the indicators of commercial fraud, as being of immense educational and preventative value.


STEVEN PETTIGROVE ( Australia) said the country strongly supported the efforts of Working Group III on “Transport Law” to produce a new instrument on the carriage of goods wholly or partially by sea.  However, a major concern for Australia was the “width of the volume contract exemption in the draft convention”, especially its potentially wide scope for allowing parties to deviate from the mandatory liability regime.  The Working Group originally identified the need for reform for uniform international law as one of the main aims of the draft convention; Australia regretted a departure from this aim.  Allowing parties to derogate from the mandatory provisions of the draft instrument would undermine its uniform implementation. 


He said the Commission’s work on secured transaction law was timely for Australia, which backed its work on developing a Legislative Guide on such transactions, particularly in light of the reforms the country had undertaken.  Additionally, intellectual property rights and financial assets were an important source of credit, and the Commission should not exclude them from a modern, secured transaction law.  However, the Commission’s exploration should not delay approval of the Guide by December 2007.  That exploration can be undertaken as a separate exercise, with a potential amendment to the Guide.


He said Australia welcomed the work in revising the UNCITRAL Arbitration Rules, but was concerned about the provisions relating to interim measures presented to UNCITRAL at its most recent group meeting.  Australia questioned whether those provisions would lead to greater uniformity in the implementation of the UNCITRAL Model Law on International Commercial Arbitration, which was up for final review and adoption at its 42nd session in 2009.


I.A. AYUA ( Nigeria) thanked UNICTRAL for submitting useful reports and commended that Commission for the adoption of recommendations on its draft legislative guide on intellectual property, securities and financial contracts. Nigeria also commended the progress the of Commission’s respective Working Groups on Procurement; on Arbitration and Conciliation, and on Transport Law and Insolvency Law.  Those efforts had included, among others, a review of the Model Law on procurement to reflect new practices, particularly those related to the use of electronic communications in public procurement and the experiences gained in using the Model Law as a basis for legal reforms in that area. 


He said arbitration rules developed by the Commission were now widely used, and Nigeria supported the view that any revisions of those rules should not alter the structure of the text, its spirit or drafting style.  Such revisions should aim to respect the flexibility of the text without making it more complex.  He also commended the efforts of the Working Groups preparing a legislative guide on international carriage of goods by sea, and the treatment of corporate groups in insolvency.


He appealed to governments, organizations and individuals with the ability to do so, to make voluntary contributions to the Commission’s trust funds.  He also called for technical assistance for the developing countries, in light of the relevance and importance of the Commission’s activities towards the implementation by those countries of the United Nations development agenda and Millennium Development Goals.


NAOBUMI YOKOTA, (Japan) said it was essential to adjust the UNCITRAL Model Law on the procurement of goods, construction and services in response to changing circumstances, and it was also important for the Working Group to revise and modernize the arbitration rules.  In addition, making uniform the transport law, which governed the international carriage of goods by sea, was also of great importance to Japan.  A uniform trade law would facilitate the resolution of problems that existing legal frameworks did not address.  He said he looked forward to a draft treaty on the issue, expected to be adopted at the UNCITRAL General Assembly next year.  He expected the Working Group to continue its efforts towards ensuring the smooth and efficient disposition of insolvency, and the promotion of its legal predictability, through a careful examination of the treatment of corporate groups that were in insolvency.


On the question of security interests in goods, he said the formulation of a legislative guide on the matter, including recommendations with respect to security rights for movable property, was important; such a guide would promote provision of credit and enhance economic growth and international trade, through a flexible and effective legal framework.  Taking into account the need for coordination of existing national legislation of individual States, he supported the adoption of the remaining recommendations by the Commission and commended the Commission’s contribution to promoting the progressive harmonization and unification of international trade law.


ALEJANDRO ALDAY ( Mexico) welcomed UNCITRAL’s work and the progress made by its working groups.  He said his delegation was particularly happy to see the progress made on the UNCITRAL legislative guide on secured transactions.  The revision of the Commission’s arbitration and conciliation law, first adopted in 1979, should ensure respect for the rules of arbitration, and their structure and flexibility.  On work being done on a legislative instrument on issues relating to the international carriage of goods by sea, he said there was need for a clear legal regime which would provide much needed certainty.


He welcomed the Commission’s recommendation that its working group updating its Model Law on Procurement of Goods, Construction and Services and its Guide to Enactment should take into account the question of conflicts of interest.  Mexico would continue to take an active role in UNCITRAL’s work.


JAMES B. DONOVAN ( United States) highlighted the work of the Commission on International Trade Law and its working groups.  He said it was recognized that despite the liberalization of trade through international agreements, the failure also to upgrade commercial laws had meant that trade liberalization was less effective with its benefits reaching fewer sectors than might have been the case.  Partial approval of the draft Legislator’s Guide on secured finance reform was the principle achievement of the Commission’s 2007 plenary session, and the remainder of the guide, with more than 200 legislative recommendations, was due to be concluded at the second meeting of the plenary session in mid-December.


He said he supported the progress of other working groups, including upgrading procurement practices for electronic commerce; modernizing commercial arbitration rules; and seeking solutions to the treatment of corporate groups and promoting protocols on cross-border cooperation in bankruptcy cases.


As Working Group III moved to finalize a multilateral treaty on carriage of goods, its decision to allow certain parties the right to freely negotiate terms of carriage, so as to both mirror existing maritime practices and reflect modern commercial law, should be maintained.


At this year’s United Nations treaty event, he said, additional States had signed the Convention on electronic commerce and the United States supported the Convention’s provisions and its market-based approach to laws enabling e-commerce without overly regulating the field.  The United States also supported the work to merge the Commission’s legislative recommendations on insolvency with those of the World Bank, so as to produce a single standard for cross-border solvency law.


Also welcome, he added, were the Commission’s efforts concerning the growing problem of commercial fraud in a number of sectors, even though this work did not fall into the core area of any existing United Nations body.  The Commission’s ability to expand its work while remaining within its existing budgets was also noteworthy.


CHESTER BROWN ( United Kingdom) said his delegation was pleased to have participated in the work to amend the draft Legislative Guide on Secured Transactions.  His delegation actively supported the Working Group on Procurement, and had participated in the Group’s recent sessions in Vienna, where further work on e-procurement had been conducted as part of the review of the Model Law.  Moreover, the United Kingdom was pleased to participate in Working Group II “Arbitration and Conciliation”, and on the revision of the UNCITRAL arbitration rules; he hoped attention would focus only on those elements of the rules which needed amendment.  The United Kingdom would continue to attend the Working Group III on “Transport Law”.


Turning to the Working Group V on “Insolvency Law”, he said the United Kingdom strongly favoured the review of the treatment of corporate groups in solvency, and would participate in the Group’s upcoming session, with a view to establishing international guidelines and best practice.  Calling the UNCITRAL Congress which followed the Commission’s summer session an “extremely interesting and thought-provoking” event, he said the United Kingdom remained strongly committed to UNCITRAL’s work.


SUNEETA VYAS MILLINGTON ( Canada) said the adoption of a large part of the draft UNCITRAL Legislative Guide on Secured Transactions had been an important step in the development of a global model for a modern secured financing regime.  Canada looked forward to the completion of that work at the second part of the fortieth session in December 2007.  It also supported the Commission’s decision to continue its work in the area of secured transactions, with a focus first of security rights in intellectual property and later on certain types of securities.


She said the Commission’s progress on procurement issues was noted, in the context of the revision of the UNCITRAL Model Law on Procurement, particularly on insolvency issues and in the negotiation on transport law.  Canada would continue to participate in each of those projects, as well as in the work to revise the UNCITRAL arbitration rules, where Canada remained interested in pursuing the issue of increased transparency in the arbitral process when one of the parties was a State.


On the review of the Commission’s working methods -- whose strength, she said, lay partly in its consensus-based method of work -- the Committee should avoid burdening that body with a rigid set of rules and procedures that could stand in the way of its continued success.  Indeed, the Secretariat must be able to act with some degree of flexibility and discretion, since the work of the Commission presented a wide range of challenges that varied from one project to another.  She said she acknowledged, however, that with the Commission having grown to 60 Member States, a review of its working methods could provide for greater transparency and inclusiveness; while Canada would suggest some caution in terms of the discussion on the Commission’s working methods, such a discussion could nevertheless be useful.


LUDOVIC BUTEL ( France) said his country welcomed UNCITRAL’s work, which continued to contribute to the harmonization of international trade laws, and noted particularly the results of the work accomplished by the Commission at its last session in Vienna.


He said he welcomed the progress on UNCITRAL’s legislative guide on secured transactions; the product was the result of a balanced approach adopted by the Commission in reconciling issues of common and civil law.  He commended the reconciliation of the two legal traditions and said it would be particularly useful for the Commission on drawing on outside legal expertise in its elaboration of texts.


He said he also welcomed the progress made by the Commission’s Working Group on dealing with legislative instruments on issues relating to the international carriage of goods by sea, such as the scope of application.  He said it was necessary that a greater framework be provided for its provisions.  The Commission’s work on insolvency law would also make a useful contribution to international trade.


ZACHARY MUBURI-MUITA ( Kenya) said he welcomed the decision to review the 1979 UNCITRAL arbitration rules for the purpose of modernizing them to promote greater efficiency in arbitral proceedings.  His delegation commended the Working Group on the subject for its progress so far, particularly on the question of online dispute resolution.  It was also pleased by the progress on the review of the draft instrument on the carriage of goods by sea, particularly provisions such as transport documents, a shipper’s liability for delays, limitation of carriers’ liability and jurisdictional issues.  Kenya hoped work on the instrument would be concluded for its finalization by early next year.


On the Commission’s insolvency law, he asked that the Working Group on the topic should consider the question of substantive consolidation and its effect on the separate identity of individual members of a corporate group.  On cross-border insolvency, he said the Commission should intensify informal consultations with judges and insolvency practitioners, to facilitate cross-border cooperation in insolvency cases.


GENNADY KUZMIN ( Russian Federation) said he welcomed the progress made on the legislative guide; work should continue as set out in the report.  The work of all the Working Groups was important and welcome.


Mr. ZAPPALA ( Italy) said the Commission’s work was critical to both the public and private sector involved in trade.  The new Legislative Guide could serve as the foundation for low cost secured credit at the global level.  The concern expressed by the European Union about overlap between the Commission and Unidroit should be addressed at the resumed session, with “deep reflection” being given to the issues France had raised.  Concerns should be weighed carefully with a view towards satisfying each legal system and a debate should follow the general presentation.  Attention should be focused on the need to provide technical support and on achieving more consistency in implementation of UNCITRAL instruments.


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For information media • not an official record