Agreement on Cross-Border Insolvency Issue Applauded in Legal Committee as Key Achievement of United Nations Commission on International Trade Law

12 October 2009
GA/L/3365

Agreement on Cross-Border Insolvency Issue Applauded in Legal Committee as Key Achievement of United Nations Commission on International Trade Law

12 October 2009
General Assembly
GA/L/3365
Department of Public Information • News and Media Division • New York

Sixty-fourth General Assembly

Sixth Committee

6th Meeting (AM)

Agreement on Cross-Border Insolvency Issue Applauded in Legal Committee as Key

Achievement of United Nations Commission on International Trade Law

Chairman Notes Broad Application, Citing Complex Cases Like Lehman Brothers

As the report of the United Nations Commission on International Trade Law (UNCITRAL) was taken up by the Sixth Committee (Legal) today, the Chairperson of the Commission, Soo Geun Oh (Republic of Korea) said that adoption of the Practice Guide on Cross-Border Insolvency Cooperation was a key and very timely achievement of UNCITRAL’s forty-second session (held in Vienna, 29 June-17 July) during the time of the global economic crisis.

He said the need for cross-border assistance in insolvency proceedings had been increasing, but lack of international legislation had hindered progress.  Conflict-resolution strategies had been adopted on a case-by-case basis when national courts tried applying different laws.  Intended to be used by judges, practitioners and other stakeholders, the practice guide provided readily accessible information on current practice.  It had broad application in complex cases such as the Lehman Brothers situation.  It was the first document on the topic by an international organization.

Going on to highlight other successes, he said the Commission’s work on cross-border insolvency was closely aligned with its work on enterprise groups in insolvency.  In fact, a text being elaborated on enterprise groups would form part of the UNCITRAL Legislative Guide on Insolvency Law, and would adopt the same format of recommendations and commentary.

Further, he said work had continued on updates of the 1994 UNCITRAL Model Law on Public Procurement and the 1976 UNCITRAL Arbitration Rules.  Recalling the 2007 Legislative Guide on Secured Transactions, he said the supplement related to intellectual property and insolvency should be ready by 2010.  Future work in the field would include the formulation of texts in such areas as a legislative guide on registration of security rights and a contractual guide on intellectual property licensing.  A model law on security transactions and a text on franchising agreements were also being considered, as was a 2010 international colloquium on the matter.

He spoke of the comprehensive new convention governing “door-to-door” carriage of goods wholly or partly by sea, saying the “Rotterdam Rules”, as they were known, would modernize the existing maritime transport regime to make it predictable and uniform in an area that had been characterized by competing multilateral, regional and domestic regimes.  It would improve conditions for international trade, enhance efficiency for commercial transactions and reduce the overall cost of doing international business.

To date, he said 19 States had become signatories since the convention was opened for signature on 23 September.  The enthusiasm of those signatories was especially significant since they accounted for approximately one-third of world trade.

Noting that the Commission’s work dealt with the emerging markets of “the globalizing world,” the representative of Cameroon told the Committee his country had signed the new convention on the carriage of goods by sea.  The aim was to reduce and eliminate the conditions that hampered international trade.  States had welcomed the Convention as one that reconciled the interests of all parties.

Indonesia’s representative said the number of 19 signatories was particularly encouraging since the convention would enter into force after ratification by 20 States; the “landmark achievement” of the “Rotterdam Rules” had created a set of contemporary and uniform rules for transportation.  It had modernized the rules for the maritime carriage of goods.

As coordinator of the two UNCITRAL resolutions this year, Austria’s representative said information should be made readily accessible to ensure cross-border insolvency cooperation.  That would minimize costs and delays while financially troubled individuals and enterprise groups received help.  A balanced framework for discussion should also be maintained, inclusive of the principle of consensus that incorporated flexibility, transparency and equality.

Australia’s representative said the adoption of the notes on cooperation, communication and coordination in cross-border insolvency proceedings would be a valuable resource for courts and insolvency practitioners around the world, especially during the current economic times.  He encouraged the Commission to consider new projects of significance to the international community, such as a favourable legal framework for microfinancing that was an important tool in combating and alleviating poverty.

Also speaking today were the representatives of Norway (for the Nordic Group), Switzerland, Belarus, China, Singapore, Malaysia, Republic of Korea, United States, Thailand, Canada, France, Russian Federation, Japan, Greece, Venezuela, Pakistan and Iran.

The representative of Italy introduced a draft resolution on observer status for the International Olympic Committee in the work of the General Assembly.

The Committee will next meet in plenary at 10:00 a.m. tomorrow, Tuesday, 13 October, when the question to be taken up was that of the criminal accountability of United Nations officials and experts on mission.

Background

The Sixth Committee (Legal) met this morning to take up the annual report of the United Nations Commission on International Trade Law (UNCITRAL), as well as, separately, to consider a request for observer status for the International Olympic Committee in the work of the General Assembly.

The UNCITRAL report covers the proceedings of the Commission’s forty-second session ( Vienna, 29 June-17 July) (document A/64/17).  It begins with an update of work leading to the adoption of a text for a Practice Guide on Cross-Border Insolvency Cooperation.  Once published, it would be considered by relevant stakeholders alongside the UNCITRAL Model Law on Cross-Border Insolvency, already published and in the implementation stage.

The report then turns to the draft model law on public procurement and the progress made by Working Group I (procurement) toward finalization of the 22 articles on the subject that would provide an update of the 1994 Model Law on Procurement of Goods, Construction and Services.  The update would reflect new practices, in particular those resulting from the use of electronic communications in public procurement and the experience gained in use of the 1994 Model Law as a basis for law reform.  Pursuant to the Group’s decision to bring defence sector procurement within the scope of the model law, a Committee of the Whole considered revisions to the articles to accommodate types of procurement that involved sensitive issues.

The Commission took note of the Committee’s conclusion that the revised model law was not ready for adoption, the report continues.  Work would continue with an emphasis on completing the model law as soon as possible, since it would have considerable impact on procurement law reforms at the local and regional levels.  Guidance was sought, in particular, on such issues as electronic reverse auctions, framework agreements, e-procurement, competitive dialogue and defence sector procurement.  The importance of outreach was underscored, as was the importance of promoting the use of uniform law standards.

The report says the Commission then took up the work of its Working Group II (arbitration and conciliation), charged with updating the 1976 UNCITRAL Arbitration Rules.  It was noted that the successful text had been broadly adopted by arbitration centres and used in many instances, as in investor-State disputes.  Therefore, any revision of the Rules would not alter the structure nor the text, its spirit nor its drafting style, and would respect the flexibility of the text rather than make it more complex.  Specific provisions on treaty-based arbitration would not be included, nor would the Rules contain a default rule by which one institution would be identified as an appointing authority providing direct assistance to parties.

It was decided, the Commission’s report goes on, that work on the revision of the Rules in the generic form would be completed for final review and adoption at the 2010 session of the Commission.  The possible inclusion of a reference to arbitrators intervening as conciliators would be considered.  The question of transparency in treaty-based investor-State arbitration would be taken up next.  The issue of “arbitrability” and online dispute resolution would remain on the Working Group agenda.  Work on a guide to the enactment and use of the UNCITRAL Model Law on International Commercial Arbitration, as amended in 2006, would also continue.  It would provide a useful instrument for national legislators and others with regard to a major UNCITRAL standard.  It would also further the harmonization of laws.

On the issue of insolvency (Working Group V), the report says the Commission considered the work on enterprise groups in insolvency and noted that a number of recommendations had been adopted in substance, first with respect to the domestic treatment of enterprise groups and later with respect to the international.  Also noted was the close connection between the international aspect and the two instruments on cross-border insolvency cooperation.  It was agreed that the text on enterprise groups should form part III of the UNCITRAL Legislative Guide on Insolvency Law and, therefore, should adopt the same format of recommendations and commentary.  To that end, the commentary to both domestic and international recommendations would be prepared for consideration by the Working Group in 2009 or 2010.  Also noted was the cooperation between the work on insolvency (Working Group V) and on security interests (Working Group VI) with respect to the treatment of intellectual property in insolvency.

Further on insolvency, according to the report, the Commission was briefed on results of the Eighth Multinational Judicial Colloquium organized by the Commission together with the International Association of Insolvency Practitioners and the World Bank.  Some 80 judges from 40 States had participated in the exchange over cross-border insolvency coordination and cooperation, including judicial communication.  Future topics under consideration included the development of model law based on the insolvency law Legislative Guide; a study of financial instruments relative to insolvency; and the insolvency of banks and other financial institutions.

For consideration of security interests (Working Group VI), the report says the Commission recalled its 2007 Legislative Guide on Secured Transactions and that an annex was to be prepared specific to security rights in intellectual property.  It was noted that the main assets of small- to medium-sized businesses were intellectual property assets, which meant that economic development called for the facilitation of secured transactions in which the encumbered asset was an intellectual property asset.  It was agreed that the annex, or supplement, was to be finalized by 2009 or 2010.  The suggestion was made to organize a colloquium on the matter, and to organize an expert meeting with regard to the mandated publication of the commentary to the United Nations Convention on the Assignment of Receivables in International Trade.

Turning to future work, the report says the Commission took note of an update on the 2008 United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, which was to open for signature in September 2009 and would be known as the “Rotterdam Rules”.  The decision about the form of a note to accompany publication of the Convention was based on considerations such as the length and breadth of the Convention, its goal of harmonizing the disparate global regime for maritime transport, the vastness of the reference documentation and the anticipated publication of academic commentaries.  Ultimately, the decision was made to prepare a brief general introduction on how the Convention had come into being without touching on substantive issues or legal assessments.  It would be attached to an index of the reference documentation that would be prepared as well.

In the area of electronic commerce (Working Group IV), the report says the Commission recalled its 2004 draft convention on the use of electronic communication in international contracts and considered the question of whether to compile a comprehensive international reference document on the legal aspects of implementing a cross-border single window facility.  Other proposals included consideration of work in the fields of electronic transferable records and of online dispute resolution to promote electronic commerce.  Assistance to developing countries for address of the digital divide was also considered.

With regard to commercial fraud, the report says the Commission recalled its work on the development of a list of “indicators of commercial fraud” based on the features present in typical fraudulent schemes, as well as its work on economic crime and identity theft in concert with the United Nations Drug and Crime Office and with the Commission on Crime Prevention and Criminal Justice.  The recommendation was made to extend the work into the area of financial fraud, in light of the current situation and recent events in the financial market that had cross-border and international implications, particularly with regard to developing indicators and identifying preventive measures.  The work may also involve a study of measures to efficiently resolve the consequences of financial fraud with a view to preserving the integrity of the global financial market.  The creation of an institutional arbitration organ was under consideration.

Moving on, the report says the Commission endorsed a 2007 revision of the Uniform Customs and Practice for Documentary Credits, published by the International Chamber of Commerce.  An update was presented on a project undertaken jointly with the International Bar Association to monitor legislative implementation of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.  Based on a 1995 questionnaire and under review since 2005, the review would be coordinated with the work of the International Chamber of Commerce Commission on Arbitration through its task force examining national rules of procedure for recognizing and enforcing foreign arbitral awards.

The report describes the mechanisms through which technical assistance and cooperation were delivered, with an emphasis on legislative technical assistance being no less important than the formulation of uniform rules.  Stressing the need for outreach, the Commission also made an appeal for States to partner with it in delivering technical cooperation support for the promotion of legal texts.  It also appealed for States to contribute to the Commission’s Trust Fund for Symposia.  An update on activities in support of the uniform interpretation of the Commission’s texts includes a report on the status of compiled case law abstracts in the CLOUT (case law on UNCITRAL texts) system -- established for the collection and dissemination of UNCITRAL texts -- as well as a report on library and online resources activities.

The report concludes with a summary of the status of the Commission’s texts, a review of its working methods, its activities with regard to coordination and cooperation with other legal bodies and its role in promoting the rule of law at the national and international levels.  The results of international commercial arbitration moot competitions are also covered, as are General Assembly resolutions relevant to the Commission’s work.  Other business relative to procedural matters are included, as is a list of documents before the Commission at its forty-second session.

The Committee was also expected to receive today a draft resolution relating to observer status for the International Olympic Committee (IOC) (document A/C.6/64/L.5) in the work of the General Assembly.  A letter from Italy (document A/64/145) contains an explanatory memorandum that describes the 115‑member Committee’s goal to place sport at the service of humanity and promote a peaceful global society.

The letter states that the Committee has been headquartered at Lausanne, Switzerland since 1915.  All IOC members are volunteers and many have participated in the Olympic Games or have been active athletes or sports officials.  In response to a request by the Secretary-General for United Nations peacekeeping missions to incorporate sport in their efforts, the Olympic Committee has worked in Liberia, the Democratic Republic of the Congo and Haiti.  It is developing programmes in other Member States.

Introduction of Report

SOO GEUN OH ( Republic of Korea), Chairperson of UNCITRAL’S forty-second session, introduced the Commission’s report.  He said one of the biggest achievements of the session was the adoption of the Practice Guide on Cross-Border Insolvency Cooperation.  The need for cross-border assistance in insolvency proceedings had been increasing, and while advances had been made in promoting cooperation, widespread limitations had hindered cooperation.  Absence of treaties, conventions and domestic regimes to address problems arising from international insolvencies had encouraged practitioners to develop conflict-resolution strategies and techniques on a case-by-case basis when courts of different States attempted to apply different laws and enforce different requirements on parties.

The UNCITRAL Practice Guide, he went on, provided readily accessible information on current practice for use by judges, practitioners and other stakeholders.  The Practice Guide was extremely timely in the context of the current financial crisis, with broad application in complex cases such as the Lehman Brothers situation.  It was the first document prepared by an international organization addressing the topic.

Reviewing the Commission’s work on other aspects of insolvency, including the Canadian Colloquium, he said the Commission’s work in procurement had focused on the areas of service procurements, alternative procurement methods, simplification and standardization of the Model Law and conflicts of interest.  In the area of arbitration, future work in the settlement of commercial disputes would examine the question of transparency in treaty-based investor-State arbitration.   The issues of ‘arbitrability’ and online dispute resolution would remain on the working group’s agenda.

Recalling the 2007 Legislative Guide on Secured Transactions, he said the supplement related to intellectual property and insolvency should be ready by 2010.  Future work in the field would include the formulation of a text on security interests in securities, a legislative guide on registration of security rights in general security rights registries, a contractual guide on intellectual property licensing, a model law on security transactions and a text on franchising agreements.  If possible, an international colloquium on the matter would be held in 2010.

He moved on to transport law and the new comprehensive Convention governing international contracts for “door-to-door” carriage of goods wholly or partly by sea.  He said the “Rotterdam Rules”, as they were known, would modernize the existing maritime transport regime to make it much better suited to the needs of today’s commerce while preserving the existing “uni-modal” regimes.  The Convention provided predictability and uniformity in an area that had been characterized by competing multilateral, regional and domestic regimes.  It would improve conditions for international trade, enhance efficiency for commercial transactions and reduce the overall cost of doing international business.

To date, he said, 19 States had become signatories since the Convention was opened for signature on 23 September.  The enthusiasm of those signatories was especially significant since they accounted for approximately one-third of world trade.  The Commission’s future work on the Convention included the preparation of an accompanying note for distribution and the formulation of an index to assist readers in accessing the extensive legislative history of the text on an article-by-article basis.

With regard to electronic commerce, he said the Commission would consider holding colloquiums to assess the desirability and feasibility of working on topics such as online dispute resolution in cross-border transactions at the working group level.  In the area of commercial fraud, work on indicators was continuing, as was cooperation with the United Nations Drug and Crime Office.  In light of recent events in the financial markets, and their cross-border and international implications, the Commission would consider elaborating indicators of financial fraud and identifying preventive measures.

Covering the Commission’s technical assistance and cooperation activities, he said the Commission had focused on legislative technical assistance.  Establishing a presence in regions or specific countries was also under consideration.  Contributions to the Commission’s funds had been encouraged and appreciation had been expressed for the contributions of Cameroon, Mexico, Singapore and Austria.  Among other issues for future work, the Commission was considering the possibility of carrying out a study on microfinance in the context of international economic development.

He said the Commission considered that higher awareness, understanding and use of international commercial law were as important for modern commerce and sustained economic development as for good governance, justice and legal empowerment.  The Commission therefore reiterated its conviction that promoting the rule of law in commercial relations be an integral part of the United Nations agenda.

Statements

ULRIKE KÖHLER ( Austria) commended the progress made this year by UNCITRAL, particularly on the completion and adoption of the Practice Guide on Cross-Border Insolvency Cooperation and for the comprehensive review of its working methods.  However, she cautioned, it was important that information be easily accessible so that the facility and promotion of cross-border cooperation be ensured.  Doing so would help avoid unnecessary costs and delays while helping to assist financially troubled individuals and enterprise groups.  She also said that it was essential to maintain a balanced framework for discussion, including the principle of consensus that incorporated flexibility, transparency and equality.

Continuing, she also lauded the progress made in the Model Law on Procurement of Goods, Construction and Services, as well as its Arbitration Rules, among other topics.  Noting the high quality of the work of UNCITRAL and the expertise of the Commission’s members, she expressed regret that during the last year several members were not represented at the sessions of the Commission or its working groups.  To address this situation, Austria made a voluntary contribution to the UNCITRAL trust fund for travel assistance to developing countries who are members of the Commission in order to “build local expertise and capacities”.

She said Austria would act as coordinator of the UNCITRAL resolutions this year, with two draft resolutions to be circulated to all Permanent Missions:  one on the annual omnibus resolution on the report of UNCITRAL, and the other on the completion and adoption of the Practice Guide on Cross-Border Insolvency Cooperation.

AASMUND ERIKSEN (Norway), speaking also for Denmark, Finland and Sweden, said that as an active participant in the working groups of the Commission, Norway commended the “open and inspiring discussions among its members”,  but said he took note of the ongoing discussion of the working methods of UNCITRAL.

He said the Practice Guide on Cross-Border Insolvency Cooperation would be useful to practitioners and judges, as well as to creditor and other stakeholders in insolvency proceedings.  Supporting the ongoing work and progress of all the working groups, he noted that Norway had participated in the revision of the Arbitration Rules of 1976 in Working Group II (arbitration and conciliation).  He also noted the decision of Working Group V (insolvency) to include the text on enterprise groups in the Guide on Insolvency Law.  He concluded with thanks to both UNCITRAL and the Netherlands on the signing ceremony that took place this September for the Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea.

FABIENNE THOMAS-EICHHORN ( Switzerland) stressed the importance of an evolving comprehensive legal system in which international trade was encouraged to flourish and grow.  She commended the achievements of the Commission’s working groups, commenting specifically on Working Group V (insolvency law) being close to finalizing an addendum to the Legislative Guide.  In light of recent economic and financial crises, she said, this progress was particularly important, and observed that “new common ground in a field traditionally marked by diversity rather than unity” was found. 

She said the ongoing revision of the UNCITRAL Arbitration Rules of 1976 was of utmost importance, since it incorporated the legitimate concerns of arbitration users.   The completion of the UNCITRAL Legislative Guide on Secured Transactions, adopted by the General Assembly, was also commended, and she stated that the Guide would help develop and modernize Secured Transaction Laws in both developing and developed countries.  She said facilitating access to credit for small- and medium-sized enterprises was more important than ever.”

ANDREW EMMERSON ( Australia) said that as an active member of UNCITRAL, his country supported its work to harmonize international trade law and reduce barriers to trade.  The progress made in developing a model law on public procurement showed the progress of the Commission.  He also noted that among the new provisions of the model law were those for defence procurement, and said that when the model law was finalized it would be widely used and helpful. 

Further, the adoption of the notes on cooperation, communication and coordination in cross-border insolvency proceedings would be a valuable resource for courts and insolvency practitioners around the world, especially during the current economic times.  He commended the Secretariat’s efforts to identify new projects, which were of significance to the international community, such as a favourable legal framework for microfinancing, an important tool in combating and alleviating poverty.

Viktar Shautsou ( Belarus) said that the work of UNCITRAL to formulate a body of precedent laws based on existing conventions -- including for the resolution of international trade disputes -- had great practical significance.  It would be helpful to States in formulating their own laws on the subject.

He said that in light of the economic crisis, UNCITRAL’s Practice Guide on Cross-Border Insolvency Cooperation was of particular importance.  He also called for expediting revisions to UNCITRAL’s Model Law on Procurement of Goods, Construction and Services, to reflect current practice, particularly with regard to electronic commerce.  He expressed support for the ongoing preparation of an informational document to include all aspects of electronic commerce, which would help States determine how best to build their e-commerce infrastructure, and proposed that UNCITRAL should work on the matter with the World Trade Organization (WTO). 

On the review of UNCITRAL’s arbitration regulations, he said that a detailed elaboration was needed on issues concerning arbitration procedures for investment disagreements.  A separate document should be prepared to that end. 

He said he supported the taking of decisions by consensus, because that indicated that there had been no objections and that observer States would not be included in the vote.  Funding for countries in need of technical assistance in the area of international trade regulations, he said, should come from extra-budgetary donor resources.  He requested UNCITRAL’s assistance in preparing legislative drafts on international trade, and said there should be international conferences and seminars on the subject.

ZHOU YONG ( China) said the items under the Commission’s consideration were a clear demonstration of the large number of emerging issues in today’s international trade which required immediate international coordination.  The revised version of the 1994 Model Law on Procurement reflected the latest practice in procurement through electronic means; it also built on the new experience gained from legal reforms based on the Model Law.  The revision should be adopted as soon as possible.

He said the various levels of economic development and the diversity of legal systems among members and observers of the Commission should be taken into account in the Commission’s work.  In formulating conventions and model laws, the situations and practical needs of States should be taken into full consideration, and the views of all parties should be reflected so that the instrument could enjoy wider recognition and acceptance.  While conventions and models had played a significant role in international trade, their usefulness could be increased.  The Commission should strengthen its efforts to raise awareness and increase the influence of its outcomes, through publicizing and disseminating activities, in particular providing technical training to developing States.

MARTY NATALEGAWA ( Indonesia) said his country participated in the UNCITRAL working groups on procurement, arbitration, insolvency, security interests and electronic commerce.  The Practice Guide on Cross-Border Insolvency provided an analysis of agreements ranging from written forms approved by courts to oral arrangements between parties.  The final text was appreciatively anticipated.  The revised model law on procurement was also welcome. 

With regard to remedies on procurement, he said the provisions of the Model Law on Public Procurement should be strengthened, so as to meet the requirements of the United Nations Convention against Corruption, with the aim of providing a mandatory system of independent review; it should delete exemptions covered in the 1994 Model Law.  On the question of bringing defence sector procurement and socio-economic considerations into the scope of the revised model, the prerogatives of member States should be respected.  The draft Model Law on Public Procurement should be finalized at the Commission’s next session.

He said he welcomed the “Rotterdam Rules”; the “landmark achievement” created a set of contemporary and uniform rules for transportation, and modernized existing international rules relating to the contracting of the maritime carriage of goods.  The number of 19 signatories was particularly encouraging since the Convention would enter into force after ratification by 20 States.

DAPHNE HONG ( Singapore) said her country participated actively in the Commission’s work.  The harmonization of national legal rules applying to cross-border commercial transactions should result in rules that were effective and rational, as well as easy to understand and implement.  Rules should not favour any one State or legal system, or specific commercial interests.  The integrity of the laws should be maintained, and they should not be insidiously compromised to advance specific commercial interests.

Further, she said it was a welcome development for the Commission to harmonize its internal workings.  Only States, and not observers, should engage in the Commission’s decision-making process.  The Model Law on Public Procurement should be finalized soon.  The working groups should expedite their work.  It was gratifying that the convention on the carriage of goods had been completed and opened.  The process of formulating the text should be examined with an eye towards expediting the Commission’s progress in preparing texts.  The Commission should do more to promote its work.  Singapore would be happy to assist in the Commission’s training programmes.

WEE CHOO KEONG ( Malaysia) said that as an active participant in Working Group II (arbitration and conciliation), Malaysia supported the original structure and spirit of the 1976 UNCITRAL Arbitration Rules.  The reference to the UNCITRAL Model Law on International Commercial Arbitration with amendments as adopted in 2006 should be the guiding principle for the group’s work and “any departure should be carefully considered.”

He said an important principle that had been agreed upon and practiced widely by member States was that in the event of conflict between the rules and a provision of domestic law, the latter should prevail.

The methods of the working groups also needed to take into account the views of the members of the working groups.  From its own experience in the deliberations, and noting the complexities of the draft text of the revised rules, Malaysia recognized the need for the working groups to have sufficient time to ensure the high quality of work required in making such drafts.  As for the Commission’s current deliberations on its rules of procedure and methods of work, he called for the maintaining of consensus, which would enable greater cooperation among States with different legal, economic and social systems.

KIM HYUNGJUN ( Republic of Korea) said that growing international transactions illuminated the issues of disparities among the different laws and regulations from nation to nation, thus impeding the flow of international trade.  In its work to harmonize and modernize global trade, UNCITRAL was becoming the driving force to the recovery of the world’s current economic crisis. 

He said his country, in support for the Commission’s work, had hosted the International Judicial Symposium in Seoul this year, which focused on practice of insolvency proceedings of global companies at a cross-border or national level.  He urged the completion of the revised model law which would impact the reform of procurement law, and concluded by noting that technical assistance was an indispensable element of the Commission’s efforts to improve its outreach to developing countries and countries with economies in transition.  Such assistance and cooperation on a regional basis, he said, would be useful by establishing a presence in regions or country offices.

MARY MCLEOD (United States) said completion of the UNCITRAL “practice guide for cross-border ‘protocols’ to coordinate and achieve cooperation between bankruptcy authorities and courts in various countries contributed to achieving international cooperation.”  The guide supported the implementation of the 1997 UNCITRAL Model Law on cross-border insolvency cases, which the United States congress enacted effective in 2006.  She said she also supported the new work on electronic commerce such as on “single window” projects (structured channels for electronic facilitation of import-export trade.)

She said that along with other like-minded States, the United States rejected proposals introduced to revise rules and procedures for the Commission’s work, which she believed would impact its effectiveness.  The proposed changes impacted key issues such as the role of the observer States and technical non‑governmental organizations, as well as methods of reaching agreement.  She said that shifting from a “substantial prevailing majority, by which the Commission had proceeded since 1970, to a unanimity standard, would substantially curtail the Commission’s five-decade production of detailed commercial law treaties, model laws and other text.”  Getting unanimous agreement on detailed commercial law texts, she added, was unworkable.

JAKKRIT SRIVALI (Thailand), observing that UNCITRAL was the core legal body in the development of international trade law, said his country actively participated in Working Group V and was currently in the process of developing a new comprehensive insolvency law regime.  The Practice Guide on Cross-Border Insolvency was a basis for the development of its laws and would prove helpful to judges, insolvency practitioners, creditors and other stakeholders.

He said Thailand hosted the sixth Forum on Asian Insolvency Reform in Bangkok this year, where the challenges to insolvency systems and needed reforms were discussed.  Solutions and responses were explored within the different regimes on insolvency in Asia.  He said UNCITRAL’s Model Law on Procurement of Goods, Construction and Services was a good basis for the reform of procurement and unified legal standards in procurement.  In closing, he said that at the end of its membership in UNCITRAL in 2010, Thailand would be reapplying for membership for the next term.

VICTOR TCHATCHOUWO ( Cameroon) noted that the Commission’s work dealt with the emerging markets of “the globalizing world,” and the formulation of model laws and conventions for application into domestic legislation; given the wide disparities among different countries, the Commission had made great progress in the harmonization of its proposals. 

In formulating its commercial laws, the Commission anticipated the challenges that were likely to arise in international trade, he said.  The needs of all countries must be considered, particularly developing countries and those which were landlocked.  The new convention on the carriage of goods had been welcomed by States in reconciling the interests of all parties.  His country had already signed the convention, whose aim was to reduce and eliminate the conditions that hampered international trade.

He said he welcomed the Commission’s progress in the areas of international insolvency agreements and in procurement.  The revision of the arbitration rules would update those rules and improve their effectiveness; given the success and popularity of the rules, the review should seek to preserve their spirit.

The Commission, he added, should promote its work by carrying out missions, publishing articles and holding seminars in developing countries.  A few years ago, the Commission had been established by just 29 members; now, there were 66, in addition to observers.  France’s initiative for a review of UNCITRAL working methods should be implemented, particularly with regard to its decision-making processes.  The Commission must not sit on the sidelines when it came to the environment.  The working groups should meet at dates closer together, so as to cut down on travel time for members.  The Commission’s capacities should be strengthened so that it could carry out all its functions.

GREG DEMPSEY (Canada) said it was important to update the 1994 Model Law on Procurement of Goods, Construction and Services, and he noted that in the six years since revision work had begun, new topics had been added periodically, which may have contributed to the slow progress.  He urged the Commission to focus on completion, so that adoption at the Commission session in 2011 would be possible.

He noted that there were several outstanding projects to be completed, one being the issue of transparency in investor-State treaty-based arbitration.  He observed that the Commission had agreed to address this after the completion of the current revision of the Arbitration Rules, and said he looked forward to participating in the work on this subject.

BENJAMIN CABOUAT ( France) said UNCITRAL should complete its current work on procurement before taking up new subjects.  The Commission’s work on intellectual property rights should be completed soon.  The increase in the membership of the Commission was an indication of the growing importance of the work coming before it.  However, its working methods needed to be addressed; to date, the Commission had functioned largely at an informal level and that now needed to change.

Issues to be addressed, he added, should include working group consensus, status of observers and languages used at informal meetings.  Discussion should aim at the possibility of adopting a resolution at the next session.  It should be kept in mind that the Commission was the primary forum for international business law.

GENNADY KUZMIN ( Russian Federation) said harmonization and unification of international trade law were among the Commission’s most important mandates.  Technical assistance and training of jurists were two others.  His country was actively involved in the Commission’s work.  The opening for signing of the convention on the carriage of goods by sea was welcome.  The adoption of the Practice Guide on Cross-Border Insolvency was very timely, as was the work of the Working Group on Arbitration.

NAOBUMI YOKOTA ( Japan) said that the Model Law on Procurement of Goods, Construction and Services was one of the most important tools in establishing transparency and efficiency in public procurement.  The revisions of the arbitration rules should be beneficial to, and welcomed by, practitioners.  Japan would continue to consider ways of national implementation of the “Rotterdam Rules,” which were a great accomplishment of UNCITRAL in building the uniform legal framework for the international carriage of goods.

He said that in light of the international economic situation, the adoption of the Practice Guide on Cross-Border Insolvency Cooperation was timely and appropriate.  The formulation of legislative guidelines on secured transactions relating to security rights in intellectual property, an issue of increased importance throughout the world, would benefit all, and he hoped that the project would be completed during the next Commission session.

MICHAEL STELLAKATOS-LOVERDOS ( Greece) said the wide acceptance of the many legal instruments, model laws, legislative guides and rules of arbitration, were proof of the quality of UNCITRAL’s work.  With that in mind, he supported the need to provide more time for the Working Group on Arbitration so that it could complete its review and work on the 1976 arbitration rules.  This would ensure a result “guaranteeing longevity” of the amendments, and meet the high standards of the original 1976 rules.

He said the investor-State dispute resolution would require the Commission’s attention and he urged postponement of consideration of this until the completion of revisions to the arbitration rules.  The work regarding intellectual property in relation to insolvency law, and in particular to enterprise groups, as well as possible amendments of the Model Law of Procurement of Goods, Construction and Services, would be beneficial to the practitioners in those areas.  He noted that observers had made valuable contributions to the Commission’s work in the past; an observer should not block a decision of the Commission.  In that respect, recourse to a vote should be a way out only to avoid a situation in which the Commission was prevented by a member State from taking a decision on issues and topics assigned to it.

GLENNA CABELLO DE DABOIN ( Venezuela) commended the work of the Commission, in particular, that of Working Group II (arbitration and conciliation).  She said the search for alternative solutions in the areas of commercial conflicts needed to be based on a common method that benefited and satisfied equally all parties involved.  She expressed hope for a definitive text to be submitted by 2010.

She also said that the achievement of the “Rotterdam Rules” reflected the efforts of the international community in establishing a worldwide maritime modern international standard that would result in unifying the complex world of global maritime commerce.  On the Legislative Guide on secure transactions, she stressed the increased importance of a normative instrument; although she regretted that the work had not been concluded, she expressed hope that a completed text would be presented during the forty-third session of the Commission.

MUHAMMAD RAFIUDDIN SHAH ( Pakistan) said the issue of cross-border cooperation in insolvency cases with debtors who had assets in more than one State must be addressed.  The Practical Guide on Cross-Border Insolvency Cooperation was a “step in the right direction,” but adoption of the Guide should not affect the accumulation of practical experiences in this area. 

He called for thorough scrutiny regarding “reverse auction”, as defined in “the constraints of online live auctions”, and said he looked forward to the Commission’s future work on the conditions for the use of electronic reverse auction and procedural rules.

He said achieving clarity and consistency in the international regulation of commerce was critical to establishing a uniform commercial law regime; that efforts of UNCITRAL towards coordination of international organizations in the field of international trade law were appreciated.

SADAT MEIDANI ( Iran) noted the Commission’s mandate to further the progressive harmonization and unification of international trade law with the interests of all people taken into consideration, particularly those in developing countries, in the extensive development of international trade.  He said the Commission’s work with regard to technical assistance should be intensified and particular attention should be turned to upgrading the national legal capacities of developing countries, to enable them to take advantage of advances in communication technologies to foster trade and commercial interactions.

The revision of the arbitration rules should not alter the text, spirit or drafting style, he said.  It should retain the flexible character of the provisions rather than making them more complex.  The new provision on the “liability of arbitrators” should not be included, since it granted absolute immunity to arbitrators instead of establishing a mechanism for their accountability.  In the future work related to settlement of commercial disputes, specific provisions on treaty-based arbitration should not be included.  Future work on the Model Law on Public Procurement should concentrate on modalities that would be feasible in most countries, including the developing countries.  All legal systems should be reflected in the work of the Commission.  Relevant legislations and pertinent practices of developing countries should be considered.

Introduction of Draft Resolution

The representative of Italy introduced the draft resolution on observer status for the International Olympic Committee in the work of the General Assembly (document A/C.6/64/L.5).

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