ASSEMBLY’S LEGAL COMMITTEE, OPENING NEW SESSION, BEGINS DISCUSSION OF INTERNATIONAL TRADE LAW COMMISSION REPORT

10 October 2006
GA/L/3295

ASSEMBLY’S LEGAL COMMITTEE, OPENING NEW SESSION, BEGINS DISCUSSION OF INTERNATIONAL TRADE LAW COMMISSION REPORT

10 October 2006
General Assembly
GA/L/3295
Department of Public Information • News and Media Division • New York

Sixty-first General Assembly

Sixth Committee

1st Meeting (AM)


ASSEMBLY’S LEGAL COMMITTEE, OPENING NEW SESSION, BEGINS DISCUSSION


OF INTERNATIONAL TRADE LAW COMMISSION REPORT

 


Work of UNCITRAL Said to Strengthen Rule of Law at National

Level, Through Legal Framework for Public, Private Sector Development


The Sixth Committee (Legal) this morning began its substantive work of the current General Assembly session with the Chairman of United Nations Commission on International Trade Law (UNCITRAL) urging the Committee not to overlook the Commission’s resources and experience in its consideration of a new agenda item, dealing with the rule of law.


Introducing the UNCITRAL report on the work of its thirty-ninth session, Stephen Karangizi, Uganda, Chairman of the session, said international trade law strengthened the rule of law at the national level through the creation of legal frameworks for public and private sector development, and it promoted adherence to the rule of law at the international level by addressing the root causes of international disputes. 


The representative of Thailand pointed to UNCITRAL’s role in facilitating commercial transactions and harmonizing international trade legislation in the midst of the increase in trade and investment flows between Member States and the rising complexity of commercial transactions and technology.


The United States representative said UNCITRAL recognized that, despite liberalization of trade through international agreements, the failure also to upgrade commercial laws meant that many cross-border transactions did not take place or did so under such unfavourable conditions as to limit sharply their effect on economic growth.  UNCITRAL’s work continued to help close that gap and reflected the practical achievements possible within the United Nations system.


Singapore’s representative required that many countries were not familiar with UNCITRAL’s good work.  Indeed, many international texts produced by UNCITRAL had not been formally adopted by the majority of the international community.  The UNCITRAL Secretariat was attempting to publicize knowledge of UNCITRAL legal texts through its technical assistance programmes but its resources were limited and as of this year, only Singapore and one other country had contributed.  The efforts of UNCITRAL were surely deserving of more help, he said.


Statements were also made by the representatives of Austria, India, Colombia, Algeria, Mexico, Belarus, France, Nepal, Australia, Morocco, United Kingdom, Ukraine and Sri Lanka.  The Under-Secretary-General for Legal Affairs also made a statement.


The United Nations Commission on International Trade Law is the core legal body of the United Nations system in the field of such law and has specialized in commercial law reform for more than 40 years.  UNCITRAL also provides technical assistance in law reform projects and organizes regional and national seminars on uniform commercial law.  It is composed of 60 Member States that are elected for six-year terms by the General Assembly.


Juan Manuel Gomez Robledo, Mexico, Chairman of the Sixth Committee, in opening today’s meeting, spoke of the Committee’s great contribution to the development of international laws.


Its main agenda items for this session include:  maintenance of international peace and security; promotion of justice and international law; measures to combat international terrorism; and relations between the United Nations diplomatic community and the host country.


The Committee will meet again tomorrow, Wednesday, 11 October, at 10 a.m. to finish its list of speakers on the UNCITRAL report and to begin its consideration on measures to eliminate international terrorism.


Background


The Sixth (Legal) Committee met this morning for its first meeting of the current General Assembly session to consider a report on the work of the thirty-ninth session of the United Nations Commission on International Trade Law (UNCITRAL) (New York, 19 June-7 July 2006).


The Committee’s other agenda items for the session include maintenance of international peace and security; promotion of justice and international law; measures to combat international terrorism; and a report by the Committee on Relations with the Host Country.


UNCITRAL’s main achievements at its thirty-ninth session were the approval in principle of the key objectives and major policies of a draft legislative guide on secured transaction, and the adoption of revised legislative provisions on interim measures of protection.  The purpose of the guide is to provide a legal framework that promotes access to low-cost secured credit.  The text will address security rights in movable property, including inventory, equipment, receivables and other types of assets.


The recommendations approved by the session include key objectives and scope of application, basic approaches to security, creation of the security right and effectiveness of the security right against third parties and registration.  Other recommendations cover issues such as insolvency, acquisition, financing devices, conflict of laws and transitional arrangements.


The new provisions on arbitration reflect the need to align the UNCITRAL Model Law on International Commercial Arbitration, concluded in 1985 and already adopted by 50 States, with current practices in international trade, particularly with respect to the form in which arbitration agreements are concluded and the granting of interim measures of protection.  According to the UNCITRAL secretariat, these provisions, together with appropriate explanatory material, will significantly update the provisions of the Model Law and facilitate the use of arbitration as a method of settling disputes arising in the context of international commercial relations.


During the session, UNCITRAL’s Working Group on Procurement reported on its ongoing revision of the 1994 Model Law on Procurement of Goods, Construction and Services, to reflect new practices, in particular those that resulted from the use of electronic communications in public procurement.  The Working Group on Transport Law reported on its development of a new international transport convention with multimodal application, encompassing innovations such as electronic transport documents.


On its future work in the field of settlement of commercial disputes, the Commission decided to give priority to possible revision of the UNCITRAL Arbitration Rules.  It also requested its secretariat to prepare a study on authentication and cross-border recognition of electronic signatures for consideration at its fortieth session in 2007.  On the topic of insolvency law, the Commission agreed that a working group should consider the treatment of corporate groups in insolvency, cross-border insolvency protocols in transnational insolvency cases and post-commencement financing, and commercial fraud and insolvency.


UNCITRAL will hold its fortieth session in Vienna from 25 June to 12 July 2007.  A special congress on modern law for global commerce is scheduled for 9-12 July 2007, in Vienna.


The core legal body of the United Nations system in the field of international trade law, UNCITRAL is composed of 60 member States that are elected for six-year terms by the General Assembly.  It began its work in 1968, two years after its establishment by the Assembly.  UNCITRAL’s mandate is to remove legal obstacles to international trade by progressively modernizing and harmonizing trade law.


Officers


Officers of UNCITRAL’s thirty-ninth session are: Chairperson, Stephen Karangizi ( Uganda); Vice-Chairpersons, Alvaro Sandoval ( Colombia), Wisit Wisitsora-At ( Thailand) and Vesna Zivkovic ( Serbia).  The rapporteur is Alexander Markus ( Switzerland).


Statements


NICOLAS MICHEL, Under-Secretary-General for Legal Affairs, said the international community had a great interest in the work of the Sixth Committee, which had made considerable contributions to the development of international law.  This year, in addition to its traditional subjects, the Committee had added such new topics as “maintenance of international peace and security” and “the promotion of justice and the rule of law”, which would undoubtedly further advance the cause of international law.  The work of the Committee was not only crucial in promoting international law, but also played an indispensable role in international relations in meeting contemporary challenges.  He assured the Committee that the Legal Office stood ready to offer all assistance to the Committee in its work.


STEPHEN KARANGIZI ( Uganda), Chairman of UNCITRAL’s thirty-ninth session, introducing the report of its work, said its major development was the approval of the substance of the recommendations of the draft UNCITRAL Legislative Guide on Secured Transactions.  Its purpose was to assist countries in modernizing their security interests law to increase access to and provide businesses with an alternative source of affordable credit.  The draft was expected to receive final approval at the Commission’s fortieth session in 2007 in Vienna.


Three main items related to “settlement of disputes” -– the second major item on its agenda – had been concluded.  They were formulation and adoption of model legislative provisions on interim measures of protection; the form of the arbitration agreement, which forms part of the revised UNCITRAL Model Law on International Commercial Arbitration; and the adoption of a recommendation regarding the interpretation of articles II (2) and VII (1) of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.  He was sure that the General Assembly would find it worthwhile to recognize the Commission’s deliberations and invite all States to give favourable consideration to the enactment of the new model legislative provisions when they revised their arbitration laws and to promote the uniform interpretation of the New York Convention.


On UNCITRAL’s technical assistance to States, he said its programmes had over the years been continuously hampered by lack of sufficient financial resources.  He invited members of the Sixth Committee to seriously address the current situation where, despite the increase in the Commission’s development of instruments, the desired impact, particularly in developing countries, was declining.  The trend could be reversed only through a fresh commitment of support for the dissemination of UNCITRAL’s work.


He said that over the years, UNCITRAL texts had played an important role in the development of the appropriate legal frameworks to support poverty reduction strategies.  The role of UNCITRAL’s texts in view of the Millennium Development Goals target date of 2015 had become even more critical.  He therefore made a strong appeal to States, international organizations and other entities to contribute to the UNCITRAL Trust Fund to enable its secretariat to meet the increasing requests from developing countries and countries with economies in transition for training and technical legislative assistance.


Welcoming the inclusion on the Committee’s agenda of a new item entitled “the rule of law at the national and international levels”, he said UNCITRAL’s resources and expertise -– as the core legal body in the United Nations in the field of international trade law -- should not be overlooked in the consideration of the topic.  He observed that international trade law strengthened the rule of law at the national level through the creation of adequate legal frameworks for public and private sector development and for equitable distribution of resources.


He said UNCITRAL promoted adherence to the rule of law at the international level by addressing the root causes of international disputes, such as the inequitable access to and use of shared resources.  The rule of law also promoted subregional, regional and international economic integration and created more favourable geopolitical conditions.  A clear example, he said, was the promotion of arbitration, conciliation and mediation in transboundary dispute settlements.  He said UNCITRAL was ready to assist with a comprehensive and coherent consideration of the agenda item in the context of its expertise.


He notified Committee members of the UNCITRAL Congress on Modern Law for Global Commerce scheduled for 9-12 July 2007, in Vienna.  The Commission envisaged that the Congress would, among other things, review the results of its past work programme and consider and evaluate topics for its future work.


KONRAD G. BUHLER ( Austria) reiterated his country’s great satisfaction with UNCITRAL’s efforts and initiatives to increase coordination and cooperation with other international organizations, and to expand its technical assistance and cooperation activities.  He observed that the Commission, through its mandate, significantly contributed to the strengthening of the rule of law, both at the national and international levels –- a timely and important topic, which the Sixth Committee would discuss next week.


He said Austria commended the Commission and its working group VI for the progress achieved in the preliminary approval of a draft UNCITRAL legislative guide on secured transactions, and looked forward to the finalization and approval of the draft guide at the Commission’s fortieth session next year.  His delegation welcomed the finalization and adoption by the Commission of revised articles of the UNCITRAL Model Law on International Commercial Arbitration.  It welcomed the Commission’s decision to hold, during its fortieth session in Vienna, a Congress on International Trade Law.  His country continued to attach the highest importance to UNCITRAL’s work and, as in the past 40 years, would continue to support its Vienna-based secretariat.


RAVI SHANKAR PRASAD ( India) said his delegation was sure that the draft legislative guide on secured transactions approved by UNCITRAL would assist countries in adopting modern secure transactions legislation.  That was a necessary condition for increasing access to low-cost credit, thus facilitating the cross-border movement of goods and services and contributing to economic development.  He advised caution in the revision of the UNCITRAL Arbitration Rules of 1976, which enjoyed widespread recognition and had served as a model for national legislation of several countries and for dispute-settlement mechanisms in bilateral investment-protection agreements.  He said that the desired flexibility, as had been indicated by several States during UNCITRAL’s session, should not be lost in any future revision of the instrument.


He hoped UNCITRAL would build upon its work on insolvency law, and complement what it had already completed on the topic.  He noted with satisfaction the progress that UNCITRAL’s working group on transport law had made.  The working group was developing a new international transport convention with multimodal application.  He also welcomed the progress UNCITRAL’s working group on procurement had made.  That working group was revising the 1994 Model Law on Procurement of Goods, Construction and Services to reflect new practices, in particular those that had resulted from the use of electronic communications in public procurement.


CLAUDIA BLUM ( Colombia) said the UNCITRAL legislative guide would contribute to the better institution of guarantees.  She welcomed the future document on real guarantees and the intellectual property regime.  As to the UNCITRAL Arbitration Rules, she said she supported retaining the structure and spirit of that normative body, saying any revision must improve the rules and avoid complexity.


Given the sensitivity of the public procurement issue and the unequal technological conditions in countries, it was important in the development of model regulation that developing countries, in particular, be consulted.  In the context of a convention on transport law, she believed that contractual autonomy deserved careful examination so that the judicial principle could be properly harmonized with the functionality the future treaty must have.


EL HADJ LAMINE ( Algeria) welcomed progress made by the working group on arbitration and conciliation in modernizing the laws in that area.  He supported the decision to undertake the revision of the rules on arbitration.  He also welcomed the progress in the legislative guide on secure transactions.  As to future work in the area of secured financing, he said his country agreed with the idea advanced by UNCITRAL that intellectual property was gradually becoming a sizeable source of credit and could be included as a right of modern guarantee.


He said Algeria looked forward to the finalization of a convention on transport law in 2008, and supported the extension of the session of the relevant working group given the importance of the task.  Finally, he supported the proposal that would allow young jurists, particularly from developing countries, to participate in the work of the Commission, perhaps through a trust fund created by the General Assembly.


KHUNYING LAXANACHANTORN LAOHAPHAN ( Thailand) said that, with the increase in trade and investment flows between Member States, the world had also witnessed an elevated level of complexity in commercial transactions, technology and legislation.  UNCITRAL, therefore, had an important role to play in facilitating commercial transactions and harmonizing international trade legislation.  The gradual harmonization of national laws to keep up with the current pace of global cooperation and economic integration was also necessary.  Thailand further believed in the necessity of fostering cross-border trade and enhancing economic relationships at the regional level.


After welcoming the work of UNCITRAL in several areas, she said one could not be complacent; the success of UNCITRAL could not be achieved without widespread adoption of UNCITRAL model laws and conventions in national legislation.  She called for more resources to be given towards technical assistance initiatives, which would help Member States, in particular developing countries, to adopt UNCITRAL legal texts in their domestic laws.


ALEJANDRO ALDAY GONZALEZ ( Mexico) offered specific observation on various articles of the 1958 Convention on Recognition and Execution of Foreign Arbitration Awards under consideration by UNCITRAL.  He welcomed the possibility of concluding work on a legislative guide on real guarantees within UNCITRAL’s next two sessions.  He also welcomed the advances made on the Model Law on public procurement, describing the Model Law as an instrument that would improve transparency and legal certainty in that area.  It was important for States to be able to rely on an efficient public procurement process.  In that same vein, a regime governing transport law would guarantee legal certainty for shippers.


He said Mexico supported UNCITRAL’s work in the field of insolvency; it believed that work would contribute to building a consensus on different aspects of trade law among diverse countries.  Work in the fields of commercial fraud and electronic commerce would be very useful to countries, since they were areas of challenge faced by the international community.


JASON TAN THENG KOK ( Singapore) said the legal texts produced by UNCITRAL had been very useful to Singapore and countries who were seeking to modernize and harmonize their laws.  His country had adopted numerous UNCITRAL texts and incorporated them into its own laws.  In this electronic age, the Convention on the Use of Electronic Communications in International Contracts served to enhance legal certainty and commercial predictability.  Electronic commerce was the key to allowing businesses to reach out in a borderless world, and the Convention was an important milestone in ensuring the legal infrastructure to facilitate the growth of that commerce.  He called on all countries to sign the Convention as a means of assisting all their businesses in conducting international trade.


He said he regretted that many countries were not familiar with the good work of UNCITRAL.  Indeed, many international texts produced by the Commission had not been formally adopted by the majority of the international community.  The UNCITRAL secretariat was attempting to publicize knowledge of the Commission’s legal texts through its technical assistance programmes, but its resources were limited and, as of this year, only Singapore and one other country had contributed.  He said the efforts of UNCITRAL were surely deserving of more help.


ELISABETH WILCOX (United States) said UNCITRAL had continued its technical and non-politicized approach to commercial and economic law reform, and had focused on the promotion of commerce in all geographic regions and for States at all levels of development.  UNCITRAL recognized that despite liberalization of trade through international agreements, the failure to also upgrade commercial laws meant that many cross-border transactions did not take place, or did so under such unfavourable conditions as to limit sharply their effect on economic growth.  UNCITRAL’s work continued to help close that gap and reflected the practical achievements possible within the United Nations system.


She cited the adoption of the Model Law on International Commercial Arbitration and the interim approval of legislative recommendations in the field of secured finance reform as important benchmarks.  In addition, the United States had expressed support for UNCITRAL’s new Convention relating to electronic commerce, with its market-based approach to laws, without overly regulating that new field, and was pursuing its internal processes to seek authority to sign the Convention.  The United States also supported the continuing work in cross-border business insolvency law towards a merger of the insolvency legislative recommendations concluded by UNCITRAL and approved by the General Assembly, as well as the parallel recommendations the World Bank prepared with the goal of producing a single standard that could be adopted by the Bank and the International Monetary Fund.


ANDREI METELITSA ( Belarus) welcomed the outcome of the work of UNCITRAL and its working groups at its thirty-ninth session.  With the growing participation of international organizations in its work, he said UNCITRAL had fulfilled its role as the coordinator of international trade law.  He said his country was taking steps to join the World Trade Organization and, towards that end, was making progress in modernizing its national laws to international standards.


He said Belarus had interest in actively participating in UNCITRAL’s work and had for that purpose in 2004, established a national coordinating committee, which had been supporting Belarus experts participating in the work of UNCITRAL and its working groups.  UNCITRAL’s legislative guides were starting to be an important part of Belarus national legislations.  Belarus hoped to broaden cooperation with UNCITRAL.


BRIGITTE COLLET (France) commended UNCITRAL on the work of its thirty-ninth session, which, she said, had been a busy one.  She said UNCITRAL was becoming more relevant, as it coordinated its work with international organizations also involved in international trade law.  The development was a positive one.  She said that France would, at the appropriate time, produce suggestions on how UNCITRAL should streamline its work.  She urged the provision of more translation services to enable delegations, particularly those from Francophone countries, to fully participate in its work.


She drew attention to the draft convention on transport of goods, and said it should take into account the interests of all different States and all different types of operators.  To that end, Australia and France had made various proposals.  Maritime transport was a delicate topic that needed the special attention of UNCITRAL.


MAHENDRA BAHADUR PANDEY ( Nepal) said that promotion of the progressive harmonization and unification of international trade laws were recognized as a vehicle for socio-economic development.  On the other hand, globalization and rapid growth of information and communications technologies had increased both complexities and interdependence in global commercial transactions.  Though its share of world economic and trade transactions was insignificant, Nepal acknowledged the importance of UNCITRAL’s work.  It urged UNCITRAL to continue its work for further coordination and promotion of development, modernization and unification of international trade law.


He noted that UNCITRAL had achieved progress in its work in various areas, including the draft legislative guide on secured transactions, legislative instruments on interim measures regarding the interpretation of relevant articles of the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards, and procurement.  His delegation emphasized that development, modernization and harmonization of international trade law would provide States, especially developing ones, with a tool to deal with the increasing volume and complexity of international trade and business resulting from globalization, while also enhancing the confidence of potential investors and promoting trade and development.  He said his country had been making efforts to utilize various UNCITRAL instruments, and urged the UNCITRAL secretariat to intensify its efforts in identifying national and regional needs for technical assistance.


BEN PLAYLE ( Australia) observed that his country’s involvement with UNCITRAL dated back to 1966, and Australia continued to strongly support UNCITRAL’s role in modernizing and harmonizing the rules of international trade.   Australia welcomed the work being done in revising UNCITRAL arbitration rules, which should result in improvements of considerable practical use.  Like other UNCITRAL members, Australia was concerned about the slow progress of the Commission’s working group II, which had begun in 2000, on revisions to the UNCITRAL Model Law on International Commercial Arbitration.  He said the work on provisions relating to interim measures and preliminary orders had been particularly contentious.  Australia and others questioned whether the provisions submitted to UNCITRAL at its thirty-ninth session would lead to greater uniformity in the implementation of the Model Law.


He said his country believed the task of producing a new instrument on the carriage of goods remained important.  A major issue was jurisdiction and arbitration.  Australia saw it as critical that a cargo claimant was able to litigate in its own jurisdiction.  A related issue was the volume contract exemption, and the potentially wide scope for parties to derogate from the mandatory liability regime.  He said Australia and France had jointly proposed a narrowing of the volume contract exemption, which they hoped would be considered favourably by the working group.  They were optimistic that a workable and widely supported modern international instrument on the carriage of goods by sea would be the end result.


KARIM MEDREK ( Morocco) said that, as the principal United Nations legal organ in the field of international commercial law, UNCITRAL was today more than ever called upon to modernize and harmonize laws as a means of removing obstacles to international trade.  That was of benefit, in particular, to developing countries.  This past year, UNCITRAL had made considerable progress in the areas of securities, procurement and arbitration.  Morocco continued to follow with interest the working group’s progress on secured transactions.  He expressed the hope that a legislative guide would be ready for presentation in 2007.


He said he favoured a revision of the rules on arbitration, noting that it was one of the first legal texts elaborated by UNCITRAL.  He also supported the elaboration of a legal instrument concerning international transport and said he looked forward to its broad international acceptance by the year 2007.  Morocco also looked favourably upon the proposals put forward by the UNCITRAL secretariat concerning electronic commerce.  The general reference document would be of assistance to lawmakers and political leaders in identifying spheres in which UNCITRAL could start harmonizing activities.  Finally, he called for greater technical assistance to developing countries and countries in transition, to allow those States greater participation in UNCITRAL’s important work, and to ensure that their needs were reflected in the Commission’s work.


CHANAKA WICKREMASINGHE (United Kingdom), after expressing appreciation to several officials of UNCITRAL and some of its specific working groups, said his country was pleased to participate in the recent meeting of the arbitration working group that had begun work on updating the UNCITRAL arbitration rules.  It was an important project, whose focus should be to update those elements of the rules that, in light of experience, required amendment.  The United Kingdom also actively supported work on procurement and the current review of the Model Law.  It was an important opportunity to introduce modern procurement practises, such as e-procurement, into the Model Law.


He also said his country was pleased to take part in the various international insolvency colloquiums that had been held.  The United Kingdom was happy to participate in that working group with a view to establishing international guidelines and best practises.  The United Kingdom remained strongly committed to the work of UNCITRAL.


OKSANA PASHENIUK (Ukraine) said the importance of the issues dealt with by UNCITRAL at its recent session, particularly in the area of secured transactions, confirmed once again UNCITRAL’s key role in developing and harmonizing the rules governing international trade.  That was why, in her delegation’s view, UNCITRAL should continue its work on the preparation of legal standards that could provide a legal framework for access to low-cost secured credit.  Ukraine welcomed the decision of UNCITRAL that a working group should consider the treatment of corporate groups in insolvency, including post-commencement finance.  Ukraine believed that progressive development in that area would promote the universal handling of cross-border insolvencies.


She emphasized that Ukraine attached great importance not only to UNCITRAL’s work, but equally to its activities in providing effective implementation and wider appreciation of its instruments.  She stressed the importance of UNCITRAL maintaining close cooperation with other international bodies and organizations actively engaged in international trade law.


VIJAYASIRI PADUKKAGE ( Sri Lanka) said his country enacted the “Electronic Transactions Act No.19” of 2006 last March, which had several features derived from UNCITRAL.  He said the Act was an important development in the legal jurisprudence in the country; it facilitated domestic and international electronic commerce by eliminating existing legal barriers and encouraging the use of reliable forms of electronic commerce.  By means of the legislation, Sri Lanka hoped to harness the potential of information technology to the rural masses, by empowering its people with the benefits of e-commerce.  In that regard, it recognized the work carried out by UNCITRAL working group IV and considered that the work should continue.  Sri Lanka encouraged UNCITRAL to explore new avenues to strengthen its technical assistance programmes.


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For information media • not an official record
For information media. Not an official record.