Legal Committee Delegates Voice Concern That Budget Cuts Could Weaken Role of International Trade Law Body at Critical Time

10 October 2011
GA/L/3414

Legal Committee Delegates Voice Concern That Budget Cuts Could Weaken Role of International Trade Law Body at Critical Time

10 October 2011
General Assembly
GA/L/3414
Department of Public Information • News and Media Division • New York

Sixty-sixth General Assembly

Sixth Committee

10th & 11th Meetings (AM & PM)


Legal Committee Delegates Voice Concern That Budget Cuts Could Weaken

 

Role of International Trade Law Body at Critical Time

 


Appeal to Save New York Sessions of UNCITRAL; Some Poorer

Countries Said to Be Unable to Afford Representation in Vienna


As the Sixth Committee (Legal) considered the report of the United Nations Commission on International Trade Law (UNCITRAL), delegates expressed strong concerns on impending budget cuts and the restructuring of plenary meeting locations being proposed for the Commission.  In particular, it was said that if meetings were held only in Vienna instead of alternating with New York, it might be difficult for some poorer countries to afford to send representatives.


With world trade dropping for the first time since the global financial crisis, the work of the Commission was more essential than ever to economic development and recovery, said Salim Moollan ( Mauritius), its Chairperson.  Financial challenges facing the Commission would limit its visibility, access to expertise and most importantly the participation of developing country representatives.  This would downgrade the Commission from a global institution to a more regional one, he warned.


While budgetary cuts and reductions were necessary, he urged that they not be carried out in a way that would destroy the value of the Commission’s work. As they stood now, those proposed budget cuts had the potential to “threaten the very legitimacy and efficiency” of the Commission’s work.  He called for support of a proposal offering alternative budget cuts and reductions that would not only safe-guard the work of the Commission, but maintain and ensure access to its meetings by developing States.


The representative of Singapore said that proposed cuts to UNCITRAL’s travel budget would make it much more difficult for Singapore’s New York mission to effectively monitor UNCITRAL’s activities.


The representative of Benin echoed similar concerns, pointing out that the work of the Commission was taking place with fewer and fewer representatives of emerging countries because of the lack of resources to attend meetings in Europe.  If the New York meetings were eliminated, representatives from the poorest States would not be able participate in the Commission’s work.  Turning to recent UNCITRAL activity, the representative of Benin called for a stronger focus on microfinance.  With 92 million entrepreneurs and a portfolio of $65 billion in gross loans, microfinance had become a global financing system and a powerful tool for developing countries to create jobs, combat poverty and engender social inclusion.


The representative of Pakistan said that in order to establish global standards for microfinance on national levels, coherent legal and regulatory measures were needed.  He also emphasized that the relevance of UNCITRAL’s work for the rule of law was “beyond doubt”.  Utilizing and implementing UNCITRAL instruments in developing countries would help attract investments, resolve commercial disputes, build the trust of international community and, “most importantly, earn them a better placement on rule of law index”.


Also speaking were the representatives of Norway (for the Nordic countries), Austria, Japan, Belarus, El Salvador, Cuba, Russian Federation, Canada, India, United Kingdom, China, Trinidad and Tobago, Israel, Pakistan, Malaysia, South Africa and the United States.


At a second meeting, today the Sixth Committee took up reports on the administration of justice at the United Nations, with delegates commending the progress of the new system, now in its second year.


The United States representative said that the United Nations Dispute Tribunal and United Nations Appeals Tribunal had already had a significant positive impact on the transparency, fairness and accountability of the personnel system of the Organization.  However, he noted that the system was still evolving and problems remained to be addressed.


The delegate from the Russian Federation reminded the Sixth Committee that it was important not to overburden the new system, but rather to fully use informal resolution methods, such as the Mediation Services Division and Office of Ombudsman.


However, the delegate of Switzerland urged that it was now time to address loopholes in the system.  Failing to do so would run the risk of the system “becoming plagued by the deficiencies we sought to address in the first place”


Speaking on behalf of regional groups were the representatives of Chile for the Rio Group, and Canada (also for Australia and New Zealand).


Also speaking in their national capacity were the representatives of Guatemala and India.


The Committee meets again at 10 a.m., Wednesday, 12 October, for discussions on the scope and application of the principle of universal jurisdiction.


Background


The Sixth Committee (Legal) met this morning to discuss the annual report of the United Nations Commission on International Trade Law (UNCITRAL).  It was also to take up its agenda item on the administration of justice at the United Nations.


UNCITRAL Report


The UNCITRAL report covers the proceedings of the Commission’s forty-forth session ( Vienna, 27 June to 8 July 2011) (document A/66/17), beginning with reports from its six Working Groups.  The Working Group on the Model Law on Public Procurement finalized a draft of that Law, as well as other procurement-related topics, which the Commission adopted and requesting that the Secretary-General disseminate it broadly, including through electronic means, to Governments and other interested bodies.


The report states that Working Group V (Insolvency Law) finalized judicial materials on the UNCITRAL Model Law on Cross-Border Insolvency, which was adopted by the Commission.  The Secretariat was authorized to edit and finalize the text in light of the Commission’s deliberations.  The Commission also requested that the Secretariat establish a mechanism for updating the Judicial Perspective on an ongoing basis to ensure that the Model Law’s neutral tone was maintained and the law continued to meet its stated purpose.


Turning to Working Group II (Arbitration and Conciliation), the report says progress had been made in the preparation of a legal standard on transparency in treaty-based investor-State arbitration.  Matters were considered for content and applicability of the legal standard on transparency to both future and existing investment treaties.


On the subject of online dispute resolution (Working Group III), the report notes start of deliberations on the preparation of legal standards, in particular procedural rules on online dispute resolution for cross-border electronic transactions.  The Commission raised the concern that the Working Group adopt a prudent approach, since the Commission’s work was designed not to affect the rights of consumers.  After differing views were expressed, it was clarified that the mandate of Working Group III related to cross-border electronic transactions, including business-to-business and business-to-consumer transactions.  While the Working Group was free to interpret that mandate as covering consumer-to-consumer transactions and to elaborate possible rules governing consumer-to-consumer relationships where necessary, it was to be particularly mindful of the need not to displace consumer protection legislation.


The report details the progress made by Working Group V (Insolvency Law) on guidance on the interpretation and application of selected concepts of the UNCITRAL Model Law on Cross-Border Insolvency.  In this regard, it also describes movement toward possible development of a model law or provisions which would address selected international issues, such as jurisdictions, access and recognition, while not precluding the development of a convention; and the responsibility and liability of directors and officers of an enterprise in insolvency and pre-insolvency cases.  One of the lessons from the recent financial crisis was the recognition of the problem of consumer insolvency as a systemic risk and the consequent need for the modernization of domestic laws and institutions to enable jurisdictions to deal effectively and efficiently with the risks of individual over-indebtedness.


Turning to security interests (Working Group VI), the report says that several States were working toward establishing a general security rights registry, which would benefit the availability and cost of credit.  After completing its text on registration, the Working Group should then embark on a project aimed at converting the recommendations in the Secured Transactions Guide into a model law.  The Commission also discussed whether a joint set of principles on effective secured transactions regimes should be prepared in cooperation with the World Bank on the basis of the recommendations of the Secured Transactions Guide.  After discussion, the Commission requested the Secretariat to proceed with the preparation, in cooperation with the World Bank and outside experts, of a joint set of principles on effective secured transactions regimes.


The report also details, among other subjects, the current and possible future work in the area of electronic commerce and microfinance; endorsement of texts of other organizations, specifically the 2010 revision of the Uniform Rules for Demand Guarantees, published by the International Chamber of Commerce, monitoring implementation of the 1958 New York Convention; technical assistance to law reform; and the role of UNCITRAL in promoting the rule of law at the national and international levels.


Administration of Justice


Also before the Committee were reports on the Administration of Justice at the United Nations.


The report on amendments to the rules of procedure of the United Nations Dispute Tribunal and the United Nations Appeals Tribunal (A/66/86) and (A/66/86.Add 1) state that by its resolution 63/253, the General Assembly adopted the statutes of the United Nations Dispute Tribunal and the United Nations Appeals Tribunal.  The Assembly also decided that, until such time as it adopted the rules of procedure, the Tribunals could apply them on a provisional basis.


The report notes that at any time, either on an application of a party or on its own initiative, the Dispute Tribunal may issue any order or give any direction which appears to a judge to be appropriate for the fair and expeditious disposal of the case and to do justice to the parties.  Where a party fails to comply with an order, the Tribunal may give such directions or make such orders as it considers appropriate in the particular circumstances, including a decision dismissing the application or response, as the case may be, provided that appropriate warning of the possible consequences of non-compliance had been given to the parties in writing.


The report of the Internal Justice Council (document A/66/158) details the monitoring of the second year of the new system and states that the Internal Justice Council is broadly satisfied that the new system has continued to function well.  It is convinced, however, that the desperate shortage of resources is a growing threat to the new system and that if this insufficiency is not addressed, the new system may well become plagued by the very problems and delays it sought to avoid.  The successful functioning of the system to date has been due to the commitment and hard work well beyond the call of duty of many of the role players, including the judges of the two Tribunals, as well as the staff of the registries, lawyers representing management and staff and the team in the Office of Administration of Justice.


The report is divided into seven sections:  the Code of conduct for judges and a complaints mechanism to enforce it; the Tribunals, including the registries; the Office of Administration of Justice; the Office of Staff Legal Assistance; the Internal Justice Council; the Management Evaluation Unit and proposed amendments to the statutes of the Tribunals.  Two other issues which were dealt with in the Justice Council’s report to the General Assembly at its sixty-fifth session, namely, the relationship between the formal system and the informal system, and disciplinary issues, are not addressed again, although the recommendations made in the Council’s last report are repeated at the end of the present report.


In the report on the activities of the Office of the United Nations Ombudsman and Mediation Services (document A/66/224), it is noted that, as 2012 marks the tenth anniversary of the establishment of the first ombudsman function in the Secretariat, and as the regional branches and Mediation Service have now completed one year of operation, the Office has launched efforts to assess its impact and effectiveness.  It was found that decentralization allowed the Office better access to its constituencies and enabled it to provide in-person intervention at the field level, which is the most effective means for conflict resolution.  The Office has also been able to develop a greater understanding of regional dynamics.  In terms of challenges, budgetary constraints have made it difficult for regional ombudsmen to travel within their respective areas to provide in-person interventions.


Another report on the administration of justice at the United Nations (document A/66/275) describes the accomplishments of the new system from 1 July 2010 to 31 May 2011 and includes the proposed programme budget for 2012-2013.  The report notes that the General Assembly, on 1 July 2009, decided to establish this new independent, transparent, professionalized, adequately resourced and decentralized system of administration of justice for the United Nations. The system has two Tribunals, the United Nations Dispute Tribunal and the United Nations Appeals Tribunal, and includes the Office of Staff Legal Assistance.  Since the inception of the new system, the General Assembly noted the improved disposition of old and new cases.


The report states that the processing of cases through all phases of the formal system continues to demonstrate a marked improvement in efficiency. During the period from 1 July 2010 to 31 May 2011, the Management Evaluation Unit received 90 requests for review and closed or resolved 281 matters.  During that same period, the Office of Staff Legal Assistance resolved approximately one-third of the more than 850 cases for which it was responsible.  The offices representing the Secretary-General before the United Nations Dispute Tribunal handled cases that resulted in 195 judgements, and the Office of Legal Affairs handled cases that resulted in 90 judgements of the United Nations Appeals Tribunal.


The success of the system however and the productivity of the offices that service it have resulted in serious strains upon the financial and human resources of those offices and units.  There is therefore a need for significant strengthening in a number of key areas to maintain the current pace of work and continue to implement all of the Assembly’s mandates for the new system.  In its resolution 65/251, the General Assembly requested the Secretary-General to provide data and information on the functioning of the new system and related matters.  The present report provides a consolidated response to those requests.  In addition, the present report contains a request for additional resources amounting to $8,657,900 (before re-costing).


Also on the agenda before the Committee were additional documents addressing the matter of administration of justice at the United Nations (documents A/66/399, A/RES/65/251 and General Assembly decision 65/513).


Introduction to UNCITRAL Report


SALIM MOOLLAN (Mauritius), Chairperson of the United Nations Commission on International Trade Law, said efforts made by the Commission, and thus by extension the United Nations, to foster economic development through better commercial relations were being met with challenging circumstances.  It was, he said, a “time of contraction in international commerce”.  World trade was dropping for the first time since the global financial crisis, with the greatest impact on emerging nations, particularly in Asia.  Thus, developing nations were most vulnerable to these conditions.


As a representative of a small State in the African region, he said he spoke first hand of the importance and effectiveness of the Commission’s work, specifically with the development of a world standard platform for international commercial investment arbitration which would in turn improve the rule of law and foster trade and development in his region.  This project would have not been possible without “the constant help and supervision” of the Commission.


He expressed concern that during a time where the work of the Commission was essential to economic development and recovery, it was facing both political and financial challenges with budget cuts that would keep its plenary meetings in Vienna.  This would limit its visibility, access to expertise and most importantly the participation of developing country representatives, thus downgrading the Commission from a global institution to a more regional one.  Pointing out that “many African countries …had representation only in New York and could not attend sessions,” he asked that the Committee endorse a proposal that offered an alternative to this by reducing some conference services and redesigning the schedule so that the plenary schedule of meetings in both Vienna and New York be maintained.


He spoke of the finalization and the adoption of the Model Law on Public Procurement, which introduced procurement tools and techniques that had emerged in the fifteen years since the 1994 Model Law.  The revised Model Law also included more streamlined and user-friendly features with a focus and emphasis on the actual outcome of the procurement process; in a time that would expect large scale insolvencies impacting several jurisdictions, this legal standard would bring legal stability by fostering the uniform interpretation of the Model Law.


He detailed the efforts of Working Group II and the importance of ensuring transparency in investor-State arbitration.  Projects included the preparation of recommendations to assist arbitral institutions and of a digest of case law on the Model Law of Arbitration.  Working Group III focused on cross-border electronic commerce transactions, including business to business and business to consumer.  Working Group VI focused on the preparation of a guide on the registration of security rights on movable assets.  Working Group IV was mandated to work in the field of electronic transferable records, an important subject in light of the implementation of the recently adopted United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea (the “Rotterdam Rules”).


He also discussed possible future work in the area of microfinance, an important tool for economic empowerment and the alleviation of poverty, and he stressed the need for a regulatory and legal framework that would protect and develop the microfinance sector.  On the subject of the status and promotion of UNCITRAL texts, he pointed out that the impact of these texts went “well beyond their formal adoption”, noting that substantive provisions of the United Nations Convention on the Use of Electronic Communications in International Contracts had been adopted in the law of several jurisdictions.  Further, the Commission’s legislative and practice guides had influenced legislation at the national level and that its contractual texts, particularly the Arbitration Rules, continued to serve as key tools for private parties and States in contractual relationships.


He spoke of the exploration of establishing regional centres in order to facilitate delivery of technical assistance for the use and adoption of UNCITRAL texts.  Several States, including El Salvador, Kenya and Malaysia, to name a few, had expressed interest in hosting such a regional centre.  Further, he emphasized the role of UNCITRAL in the promotion of the rule of law at the national and international levels, where in post-conflict societies the role of the Commission and its standards was crucial to formulating a legal framework for commercial activities that engendered regaining the trust of commercial partners toward regional and international economic integrations.  It was vital that the Commission’s achievements and its potential to foster development be integrated within the broader United Nations rule-of-law agenda.


Concluding, he returned to the pressing concerns of budget cuts and their potential to “threaten the very legitimacy and efficiency” of the Commission’s work.  While budgetary cuts and necessary reduction were essential, he urged that they not be carried out in a way that would destroy the value of the Commission’s work.  An “unfortunate incident” had in fact occurred during the finalization of the Commission’s report that was before the Committee today, where a decision to cut the document by over 30 per cent was based on strict interpretation of rules governing page limit for reports of intergovernmental bodies without consultation with the secretariat of UNCITRAL.  Because the Commission’s work related to the preparation of legal texts, it was not, in his view, a restriction that was appropriate to this report and the work of UNCITRAL.


Such limitations would make it difficult for legal scholars, judges, public authorities and other end users to understand and apply the texts in a satisfactory way.  He called for the Committee, when preparing its annual resolution on the work of UNCITRAL, to utilize “clear and strong language which would make it plain to all involved” that page limitation should not negatively affect the quality of the documentation.  If UNICTRAL was to thrive, it would require the participation of all States including those represented only in New York.


Statements


ANNIKEN ENERSEN ( Norway), speaking also for Denmark, Finland, Iceland and Sweden, said that the activities of the UNCITRAL Working Groups were characterized by open and inspiring discussions.  Noting the newly adopted Model Law on Public Procurement, she said she welcomed the ongoing discussions of how best to prepare a Guide to Enactment of the Model Law, as well as efforts to ensure the Guide would be a dynamic, “living” document through electronic updates to the UNCITRAL website. In that regard, the use of new technology by the UNCITRAL secretariat, including the creation of a blog that covers the Model Law, was commendable.


Turning to the specific work undertaken by each of the Commission’s Working Groups, she said the outcome of the study (Working Group I) on the future work of UNCITRAL in the area of public-private partnerships and privately financed infrastructure projects were awaited.  Of particular importance to Working Group II were principles of transparency and public access relative to governmental activity in the context of State disputes. Expressing appreciation for the work of Working Group VI on security interests, she looked forward to the focus of Working Group V on two topics:  the responsibility and liability of directors and officers of an enterprise in insolvency and pre-insolvency cases, and selected concepts of the UNCITRAL Model Insolvency Law relating to the centre of main interests.  Both topics would benefit from greater harmonization of national approaches.  Noting the work accomplished so far by Working Group III (on Online Dispute Resolution), she said that while some of the Commission’s projects had reached finalisation, other projects were still debating their initiation.


CATHERINE QUIDENUS ( Austria) said that among the most important achievements for UNCITRAL over the past year was the adoption of the judicial material on the Model Law on Cross-Border Insolvency.  As business was conducted globally and enterprises and individuals had assets and interests in more than one State, cross-border cooperation and coordination were required.  The aforementioned Model Law contributed significantly to the establishment of a harmonized legal framework in this regard.  With the possibility of judges referring to these materials in insolvency proceedings, there could be wider use and understanding of the Model Law, thereby avoiding unnecessary delay and costs.


She said the draft UNCITRAL Model Law on Public Procurement would contribute to establishing a harmonized and modern legal framework for public procurement that promoted economy, efficiency and competition while fostering integrity, confidence, fairness and transparency.  The Law would assist all States, particularly developing countries and States in economic transition with improving their existing procurement laws and formulating these laws where none presently existed.  The Law would also lead to the development of harmonious international economic relations and increased economic development.


Noting UNCITRAL’s unique ability to provide internationally acceptable model laws, she reminded Committee members that the Commission’s instruments and resources could facilitate and expedite the transition from post-conflict recovery toward a more stable and inclusive economy. Austria, as the coordinator for UNCITRAL resolutions, would circulate three draft resolutions in coming days:  the annual Omnibus Resolution on the Report of UNCITRAL; a draft resolution of the Model Law on Cross-Border Insolvency:  the judicial perspective; and a draft resolution on the Model Law on Public Procurement.


TOMOKO KAKEE ( Japan) said the need to modernize the United Nations Commission on International Trade Law Model Law on Procurement of Goods, Construction and Services had long been recognized, and Japan therefore appreciated the completion of the revision of that Model Maw.  Her delegation also believed that it was important for every State to examine carefully how transparency should be ensured in the context of treaty-based investor-State arbitration.  Japan hoped to contribute to the current project of the Working Group on that issue.  Additionally, she said, it was important to make progress in the current project of the Working Group on the Online Dispute Resolution rules for cross-border electronic commerce transactions.


She said Japan further appreciated that judicial materials on the UNCITRAL Model Law on Cross-Border Insolvency had been completed, particularly in the context of the current financial crisis. With regard to security interests, it was important to complete a legal text of registration of security rights in moveable assets, which would promote the provision of credit and enhance economic growth and international trade through the creation of a flexible and effective legal framework.  Finally, noting that some of UNCITRAL’s recommendations had been adopted by the General Assembly this year, she said that Japan hoped that careful consideration would be given to other recommendations in the Assembly’s coming session, taking into account the need for coordination of the existing national legislation of individual States in that area.


YURY NIKOLAICHIK (Belarus) expressed his support to the Commission and its role in world development, in particular the supplement to the Legislative Guide on security rights.  He also applauded the reconvening of Working Group IV for its work as it was important to consolidate experience and practice with regard to electronic commerce.  In paying attention to an improved arbitration mechanism, he said he supported the development of general and shared standards on transparency that could be used by all arbitration bodies.


Turning to efforts in his country on a national level, he said Belarus sought to attract foreign investors and had created a favourable regime to that end, notably on agreements on protection and investments.  His country was keenly following the pilot project on establishing UNCITRAL regional centres and was focused on harmonizing its national standards with international standards, so that by 2013 a nation-wide proposal would be implemented to further cooperate and improve the Commission’s efforts.


JOAQUĺN A. MAZA MARTELLI ( El Salvador) said the review of the law on public procurement and the finalized revised model law on the matter significantly contributed to harmonized and unified national legislation in this area.  Progress achieved by other Working Groups had also contributed to the codification and progressive development of international trade law.


Taking up the Secretary-General’s aim to reduce the administrative costs of the Commission, he expressed concern about the proposal to stop having Commission sessions in New York, and instead to hold them only in Vienna.  While reducing costs was of great importance, alternating the location of these meetings was essential to the functioning of UNCITRAL.  Splitting the location of the meetings allowed for diverse participation, including by those representing different legal systems and in different stages of economic development.  Having meetings in different locations was beneficial for developing countries, many of whom did not have representation in Vienna, and allowed for better coordination and cooperation with United Nations bodies based in New York.


LESTER DELGADO SÁNCHEZ ( Cuba) regretted the delay of the publication of the report which limited the time for the Committee to study it.  He said UNCITRAL was the main body within the Organization focused on a greater participation of developing countries.


The diversity and specialization of issues was important and the question of alternating of meetings between Vienna and New York was a “weighty issue” for developing countries.  He praised the efforts of the Working Groups, specifically on the subject of arbitration and conciliation and said that, regarding dispute resolution in investor-State disputes, the issue of transparency was of great importance.


He said he was aware of the negative impact of certain cases decisions made in arbitral tribunals, which had ignored the scope of the disputed agreement and had stretched beyond the scope of agreements over the will of the contracting States.  Regarding Working Group II, he said his delegation had been left “extremely concerned” by the nature of the discussions and their possible consequences.  He stressed the need to be “extremely cautious” in promoting reform of the arbitration rules of UNCITRAL, especially in relation to elements outside the international practice concerning arbitration.


DAVINIA AZIZ ( Singapore), praising UNCITRAL’s completion of its work on the Model Law on Public Procurement, regretted that the process took so long.  She hoped UNICTRAL and its working groups would keep in mind the need to work efficiently, and to optimize limited resources.  She welcomed the reconvening of the Working Group on Electronic Commerce to focus on electronic transferable records and reaffirmed Singapore’s commitment to lead it.  She encouraged countries to implement the provisions of the United Nations Convention on the Use of Electronic Communications in International Contracts in their domestic law, as Singapore had.  She welcomed creation of UNCITRAL Regional Centres to further UNCITRAL’s technical assistance work and said Singapore was exploring with UNCITRAL the possibility of hosting such a centre.


She said the principles agreed upon and incorporated into the statement approved last year, and accepted by the Sixth Committee, on UNCITRAL’s Rules of Procedures and Methods of Work should not be undermined.  The proposed cuts to UNCITRAL’s travel budget, which would result in the discontinuation of the present system of alternating meetings between Vienna and New York, would adversely impact Singapore and make it much more difficult for Singapore’s New York mission to effectively monitor UNCITRAL’s activities.  She supported the proposal of continuing the present system of alternating meetings between the two cities, as well as the suggestion of reducing from 15 to 14 the number of weeks of meetings per year in order to cut costs.


ANDREY V. KALININ (Russian Federation), commending the important work of UNCITRAL, said the effort to set up a “cloud” database system was of particular importance, as it would provide access to decisions and resolutions rendered in other parts of the world. Noting that the revised Model Law on Public Procurement had been adopted, he said the document took into account new developments such as the holding of reverse electronic auctions.


Moving on to how the Commission was set up, he said he was interested in learning more about the initiative to create a regional UNCITRAL centre in South Korea for the Asia-Pacific region.  He spoke favourably about maintaining the current practice of holding UNCITRAL sessions in both Vienna and New York.  In conclusion, he said he was only supportive of proposals that contributed to the work of the Commission, without harming its effectiveness.


KEITH MORRILL (Canada) commended the work of the Commission and welcomed the adoption of the Model Law on Public Procurement, and of the Judicial Materials on cross-border insolvency, which he said would contribute to a consistent interpretation of the Model Law internationally.


He said progress in the preparation of a guide on the registration of security rights in movable assets was commendable, as was the work done on the online dispute resolution project.  As for the proposed cost-saving measures, Canada felt that ending the rotation of meetings between New York and Vienna would result in only limited savings, and that the disadvantages would exceed the projected financial benefits.  It was important to have UNCITRAL close to a large international trade centre such as New York.  This would allow for stakeholders and other groups interested in the Commission’s work, which if rotation was eliminated would end.


MOINUL HASSAN AHAMED (India), noting UNCITRAL’s role as the core legal body of the United Nations in the field of international trade law and the important efforts of its Working Groups, said one of its most significant recent achievements was the General Assembly’s adoption of its Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, known as the Rotterdam Rules.


Concerning the new Model Law on Public Procurement, he said this would be useful for States in updating existing and formulating new procurement laws.  As for the preparation of legal standards on Online Dispute Resolution, settling disputes online was a solution that could provide quick resolution and enforcement of cross-border disputes, arising from small-value, high-volume business-to-business and business-to-consumer transactions.  In the area of arbitration, he spoke optimistically about the prospect that Working Group II would come out with the practically viable legal standards on transparency in treaty-based investor-State arbitration.


On the topic of electronic records, he said uniform legal standards in the field of electronic transferable records would be beneficial for both the generic promotion of electronic communications in international trade and in the implementation of legal instruments with provisions on electronic records.  Taking up the insolvency issue, he said he welcomed the consideration of the proposal concerning the responsibilities and liabilities of directors and officers of an enterprise solely in the context of insolvency.  Concluding, he urged the Secretariat to continue to provide assistance to developing countries, particularly on the adoption and use of texts adopted by the Commission.


DOUGLAS WILSON (United Kingdom), commending the progress of the Working Groups, said that the Model Law on Procurement was a “most important contribution”, in particular to developing countries.  Further, he commended the progress made in Working Group V on the interpretation and application of the Model Law concept of insolvency law.  The adoption of the Judicial Perspective was also of great value to practitioners, judges and other stakeholders in insolvency proceedings.


Turning to the issue of budgetary concerns, he agreed with the need to achieve savings across the Organization and commended the Commission for the significant savings which it had had already made across its budget.  However, he expressed his strong support to continue the practice of alternate meetings for next year’s plenary and supported the proposal to achieve additional budgetary savings, roughly equivalent to those sought by the Office of Legal Affairs, by reducing the number of meetings from 15 weeks to 14 weeks.  This would allow time for a full assessment to be undertaken on the impact of these changes as well as to identify other possible efficiency savings for future meetings.


ZHOU LIPENG ( China) believed that the Model Law on Public Procurement would serve as an important source of reference for the legislative work of countries in the area of government procurement.  Turning to the decision to reconvene the Working Group on Electronic Commerce, he said e-commerce was the new trend in international trade and the re-launching of the working group, as well as the new items on its agenda, reflected the urgent need for harmonization and coordination among countries and regions in international trade.  UNCITRAL should continue to conduct in-depth discussions on these relevant items and to work toward the formulation of relevant international rules.  In formulating domestic legislation, China had taken as reference relevant model laws or legislative guides issued by the Commission. It had also publicized and disseminated the results achieved by UNCITRAL in China.


EDEN CHARLES ( Trinidad and Tobago) recognized UNCITRAL as being critical to the advancement of good governance, sustainable development and the eradication of poverty and hunger.  On the Guide to Enactment for the Model Law on Public Procurement, he said, coordination among the various procurement reform agencies and other mechanisms had promoted effective implementation and uniform interpretation of the revised Model Law.  This included the desire to work in the areas of public-private partnerships or privately financed infrastructure projects.


He said the UNCITRAL should continue to develop rules governing cross-border electronic commerce.  Because disputes in international commercial relations were inevitable, arbitration was valuable as a means of settling disputes.  The Commission and its agencies should continue to develop rules on a uniform law on transparency in treaty-based investor-State arbitration, and should continue to progress its work on online dispute resolution in cross-border electronic commerce transactions.


He said domestic laws and institutions should be modernized to enable jurisdictions to deal with the risks underlying “natural person insolvency”, and to study the variations in legal treatment under national regimes. As microfinance was an important tool for poverty alleviation, and a significant element of the national economy in some places, a legislative and regulatory framework for microfinance should be developed, including recommendations to improve the integration of small and vulnerable economies into the multilateral trading system. The needs of the least developed countries should be addressed and the debt problems of developing countries should be dealt with comprehensively through national and international measures.


JEAN-FRANCIS R. ZINSOU ( Benin) commended the progress made on the Model Law of Procurement.  He called for microfinance and electronic commerce to be further highlighted in the Commission’s agenda, given the impact these issues had on developing countries such as his.  By tackling electronic commerce, he said, it was crucial to bear in mind the digital divide between developed and developing countries; any efforts undertaken needed to be aimed at a balanced approach, which would not result in unfair rules toward developing countries.


He said that it would be advisable to not just focus on drafting uniform rules, but to invest in more implementation through providing technical assistance to countries in need of such support.  On microfinance, he expressed the hope that a framework on this sector would be developed, since it was a powerful tool in developing countries toward job creation, combating poverty and engendering social inclusion.  He noted that microfinance had changed from an NGO donor-based system to a global financing network with more than 92 million entrepreneurs with a portfolio of gross loans of $65 billion.  This proved the importance of microfinance in the world economy.


At the national level, he said his country had a programme aimed at the poorest of people and that 600,000 women had been empowered in job- and income-development.  There was a ministry specifically for microfinance and he offered to share this national experience with the Commission.


Concluding, he expressed concern that the work of the Commission was taking place with fewer and fewer representatives of emerging countries because of the lack of resources to attend meetings in Europe.  He urged that meetings continue in New York where many countries had permanent representation; eliminating the New York meetings would eliminate representatives from the poorest States from participating. He asked that special funds be diverted towards improving the participation of African countries, to aim for a more balanced approach.


OHAD ZEMET ( Israel) began by noting that Israeli legal experts had taken an increasingly active role in the discussions of the various working groups of the Commission.  From that perspective, Israel believed that the tools adopted and endorsed by UNCITRAL would continue to facilitate international trade law and provide solutions to issues arising from cross-border transactions.  He specifically welcomed the progress made by Working Groups II and III in drafting the legal standards on transparency in treaty-based investor-state arbitration and the rules on cross-border online dispute resolutions.  There was still much to be done in the constantly developing field of international trade law; Israel was honoured to play an integral part in the United Nations effort to promote the creation of legal frameworks conducive to global trends of such magnitude.


ABDUL HAMEED (Pakistan), on the importance of the Model Law on Public procurement, said such activity in developing countries was not only a component of the promotion of trade, but also a component in a course of action for capacity building and the promotion of local small- and medium-sized enterprises.  He also expressed appreciation for the efforts of Working Group II on the issue of transparency in treaty-based investor-state arbitration.  However, the issue of submission, particularly in the intervention by a non-disputing State party to the investment treaty, needed more discussion and consideration.


Turning to the issue of microfinance, he said it was an important tool for poverty reduction, and there was a need for coherent legal and regulatory measures which could act as global standards for national-level legislators.  He said the relevance of UNCITRAL’s work for the rule of law was beyond doubt, and he called for the integration of its work within broader United Nations efforts.  The implementation of UNCITRAL instruments would help countries to attract investment, resolve commercial disputes, build the trust of international community and, “most importantly, earn them a better placement on rule of law index”.


DOMINIQUE FERNANDES ( Malaysia) believed all Member States would give favourable consideration to the Model Laws on Public Procurement and on the judicial perspective of Cross-Border Insolvency.  Member States and arbitration centres should study the revised UNCITRAL Arbitration Rules for future implementation.


As for Working Group II, she emphasized that any provision on transparency in investor-State relations should be subject to the will of the parties, or conditions as appropriate.  The rules of transparency should not be applied to existing treaties; neither should they affect a State’s sovereignty. A concluded investment treaty or chapter was an outcome of negotiation between the contracting States.  Thus, the rules on transparency developed by Working Group II should not be automatically applied to existing treaties in this forum without the express consent of the contracting parties.


She said she looked forward to the progressive formulation of a new online mechanism for cross-border electronic commerce transactions; this mechanism should be introduced only after a thorough evaluation by States to determine its acceptability and advantages.


THEUNIS KOTZE ( South Africa) said that progressive modernization and harmonization of international trade law would contribute significantly, particularly for developing countries, toward universal economic cooperation between States.  He stressed the importance of technical assistance in international trade law reform and development, and appealed to the United Nations Development Programme (UNDP) and other bodies of the Organization for such assistance.  He also appealed for voluntary contributions to the trust fund to provide travel assistance to developing countries that were members of the Commission.


Turning to the Model Law on Public Procurement and the Guide to Enactment, he said he hoped the Model Law would be applied in different jurisdictions, where different political, legal and socio-economic considerations might be at play.  He pointed out that his country applied its procurement laws in the context of the need to address the legacy of damage done by decades of Apartheid rule.  “In this environment”, he said, “Black Economic Empowerment plays a particularly crucial role.”


JOHN ARBOGAST ( United States) said the revised Model Law on Public Procurement would be extremely valuable to countries seeking to modernize their government procurement systems; its use had been supported by a number of international financial institutions.  He also spoke favourably about the adoption of the judicial “desk book” collating the Commission’s work on corporate insolvency matters, particularly cross-border trade and commerce.  This composition made the Commission’s work readily accessible to officials and practitioners worldwide.  The United States had adopted the UNCITRAL Model Law on cross-border insolvency cases as a new chapter of its Bankruptcy Code; other States should also adopt the law.


On UNCITRAL’s role in promoting the rule of law, he said that harmonizing commercial law could continue to make an important contribution to broader United Nations rule of law efforts.  In closing, he spoke in support of retaining the existing system of rotating Commission meetings between New York and Vienna.  That arrangement was an important factor in agreeing to the relocation of the secretariat staff to Vienna, ensuring their exposure to a range of commerce and trade interests.  The set-up also ensured the participation of mission legal officers who were often located in New York. Costs should be reduced in an alternative way.


In closing remarks, Mr. MOOLLAN (Mauritius), Chairperson of UNCITRAL, addressed concerns of some delegates.  He stressed that the report was not just done for the Committee, but to give the “real, tangible” results of what was sometimes “invisible work”.  He thanked speakers for their support of the Commission’s work in international trade law, and for the proposal on alternative ways to utilize the budget.


He then clarified points on the ways of operation of the Commission and its Working Groups.  On a working group level there was no distinction between Member States and non-Member States, and all were equal to participate by consensus.  He urged those who might not have considered participating because of non-Member status, to consider doing so.  On the time taken in the Commission’s work, he pointed out that because agreement was reached by consensus, they went as fast as was practiced, while dealing with the complexity of the technical areas and taking into account all the diverse legal backgrounds.  Turning to the issue of the trust fund and the call for it to be utilized for the participation of developing countries, he said the fund was almost empty, and he called for nations to voluntarily contribute to it toward this end.


Administration of Justice at the United Nations


At its second meeting today, the Sixth Committee took up its agenda item on the Administration of Justice at the United Nations.


Statements


ALEJANDRA QUEZADA (Chile), speaking for the Rio Group of countries, noted that the Sixth Committee had made administration of justice at the United Nations operational by drafting statutes for both Tribunals.  In that regard, the Group welcomed clarifications on the code of conduct for Tribunal judges and on the rules of procedure for both bodies.  The Group was also prepared to discuss mechanisms for formally removing judges and to define the meaning of “grounds of misconduct or incapacity” and the means for the establishment for such grounds in specific cases.


She said the Rio Group looked forward to further deliberations on the possibility of establishing expedited procedures for the resolution of disputes between the United Nations and certain types of non-staff personnel.  The relation between access of non-staff to the formal system, and the proposal in the Secretary-General’s report related to the Office of the United Nations Ombudsman and Mediation Services and non-staff should be clarified.


Although the United Nations Dispute and Appeals Tribunals had been engaged in substantive work, she said, more recourse should be sought in the informal system.  In this regard, the referral of 13 cases identified by the Dispute Tribunal to the Mediation Division was welcome.


KEITH MORRILL (Canada), speaking also for Australia and New Zealand, said it was essential that the practices of the United Nations reflect its own values in promoting respect for individual rights and the rule of law.  “The United Nations administration of justice system must also have the trust of employees, United Nations administrators and Member States”, he stressed.


He said he applauded the performance of both the United Nations Dispute Tribunal and the United Nations Appeals Tribunal to date, and stressed that it was important to consider what modifications and development might be needed to improve this new system which had now been in place for two years.  He noted that the Secretary-General had requested further decisions, guidance and resources from Member States in regard to a range of issues on this matter.  The Committee could be assured that these recommendations would be considered carefully, and he said he and those for whom he also spoke looked forward to working with other delegations to ensure the new system would be the “fair, effective and efficient system” it was intended to be.


NIKOLAS STÜRCHLER (Switzerland) said that although progress had been made in the two years since the new administration of justice system began operating, efforts should continue for the envisaged goal of having an independent, transparent, professionalized, adequately resourced and decentralized system.  It was now time to address loopholes in the system.  Failing to do so, he said, would run the risk of the system “becoming plagued by the deficiencies we sought to address in the first place.”


Staff and non-staff personnel should have access to an independent body which handled grievances and provided appropriate, cost-efficient remedies.  The new system provided such access to staff while denying it to non-staff personnel.  He looked forward to discussing the Secretary-General’s proposals for certain categories of non-staff personnel, in the view of achieving a fair and just solution as soon as possible.


When reviewing the statutes of the United Nations Dispute and Appeals Tribunals, he said, it should be emphasized that there should be no jurisdictional gaps in any amendment to the statutes.  As for reporting related to the administration of justice system, the views of the Internal Justice Council were welcome.  The Sixth Committee might in the future also want to consider direct communication between the Tribunals and itself.


ANA CRISTINA RODRÍGUEZ-PINEDA (Guatemala), stressing the importance of the Committee monitoring and overseeing the implementation of the new system, continuing with pending issues, said that the system was on the right path and direction; it was important to ensure it stayed that way.  As for the Code of Conduct, it was important to have this document as soon as possible.  She asked for information on how binding the document would be, and for clarification on certain terminology which might go beyond what should be included in such a code.  In the matter of removal of a judge due to misconduct or incapacity, such terms required further discussion.  She expressed interest in hearing more about complaints levied against judges and whether or not a complaints panel might address this situation.


Discussing management evaluation, she spoke of the extension of deadlines which had received some criticism for leading to delays and failing to add value.  However, she said, she supported the process, since it prevented litigation and inappropriate actions by the Office of Administration.  Concluding, she underscored that the relevant General Assembly resolutions stated that the tribunals did not have powers past their mandate and that their endeavours work in keeping with the Charter.


DIANA TARATUKHINA ( Russian Federation) said she was satisfied with the way the new administration of justice system at the United Nations was working.  One main achievement was the establishment of effective dispute resolution that balanced the interests of the Organization with that of personnel.  This system fostered mutual trust between staff and the Secretariat.  Despite problems related to staffing and material resources, the Dispute and Appeals Tribunals had been set up, the backlog of cases had been addressed and staff had been provided access to the system and more speedy recourse.


She reminded the Sixth Committee that it was important not to overburden the new system, saying it was necessary to make full use of informal resolution methods; in this regard, the contributions of the Mediation Services Division and Office of Ombudsman were welcome.  She said improving legal protection to those without access to the administration of justice system, specifically non-staff personnel, was still fundamental.  Inadequate human and financial resources threatened the effectiveness of the new system.  While the Fifth Committee was working on financial matters in this regard, the Sixth should continue to work on the legal matters.


MOINUL HASSAN AHAMED (India) called the informal resolution of conflict, particularly through the Office of the Ombudsman and Mediation Services, crucial to the administration of justice system.  Decentralization of informal conflict resolution services had provided the Office with better access to its constituencies, and enabled it to provide in-person intervention at the field level.  The request for additional resources for the Office of the Ombudsman during the next biennium deserved the Committee’s attention.


Also deserving of the Committee’s attention, he added, were the recommendations made by the Internal Justice Council in its report on the new justice system, including those concerning the code of conduct for judges, additional appointments, independence of the reporting system, resource requirements, and review of the United Nations Dispute and Appeals Tribunals statutes. The Secretary-General’s proposed amendments to the Rules of Procedure for the Tribunals would further strengthen procedural requirements for the delivery of justice.  Overall, adequate human and financial resources were needed to strengthen the new system.


STEVEN HILL (United States), noting the landmark achievement of establishing the new administration of justice through the relevant resolution of the General Assembly, said that the two tribunals had already brought a significant positive impact on the transparency, fairness and accountability of the United Nations personnel system.  The professionalism and productivity of the new system and the efforts of the judges and staff who worked on these issues contributed to making the new system a success.  However, he noted that the system was still evolving and there were problems remaining to be addressed.


He said that the recommendation made by the Secretary-General, deserved careful consideration in the working group and that details were still being studied, including those regarding the United Nations Dispute Tribunal and the United Nations Appeals Tribunal.  While recognizing the need to ensure that the system remained consistent with the governing principles of the Organization, he also stated the need to prioritize the work.  In addition, while it would continue to merit more consideration and discussion, the Secretary-General proposed the recourse mechanism for individuals who were not United Nations staff members provided a fair, effective and efficient recourse mechanism for those persons.


Concluding, he thanked the Internal Justice Council and the Ombudsman for their report and stated that the draft Code of Conduct was worth careful consideration.


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