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by Mr. Hans Corell Under-Secretary-General for Legal Affairs The Legal Counsel New York, 12 June 2000
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Distinguished delegates and observers,
It is with great pleasure that I welcome you in New York to the thirty-third session of UNCITRAL. As the Legal Counsel of the United Nations I am honoured to support your activities through the International Trade Law Branch of the Office of Legal Affairs, and together with my colleagues in the Branch I take pride in contributing to the success of your work. Ladies and gentlemen, the fifty-fifth session of the General Assembly, which will be opened on 5 September 2000 has been designated "The Millennium Assembly of the United Nations". To mark this special occasion, the General Assembly decided to convene a "Millennium Summit of the United Nations", which is likely to be the largest single gathering of Heads of State and Government ever held in the world. However, the third millennium is not merely an occasion for celebration. As the Secretary-General has said, it "presents a timely opportunity for the only global organization, in terms of its membership as much as of its areas of work, to identify the challenges that it will face in the future and to engage in an imaginative exercise to enhance and strengthen a unique institution". Anyone looking back at the work of UNCITRAL in the past decades acknowledges its enviable record of hard and high quality work. The impetus given by UNCITRAL to the progressive harmonization and unification of the law of international trade can be easily measured by the remarkable pace of its work, which resulted in various important texts such as international conventions, model laws and statutory provisions, rules and legal guides. Among those texts we count instruments of such wide acceptance and authority that they have become real landmarks in the field of law to which they pertain. I refer in this context, in particular, to the United Nations Sales Convention, the UNCITRAL Model Law on International Commercial Arbitration, the UNCITRAL Arbitration Rules and the UNCITRAL Model Laws on Electronic Commerce and on Cross-Border Insolvency. This impressive record of achievements is also the result of two aspects of extraordinary cooperation of which you can be particularly proud: the cooperation among States participating in the work of the Commission and the cooperation with interested international organisations of the public and private sectors. Ladies and gentlemen,
member States can indeed be proud of the achievements and prestige of
this institution. However, no organization lives from fame and reputation
alone. Our task of servicing the international community demands from
us a continued effort to remain responsive to changing needs and circumstances.
The opening of your annual session a few weeks before the opening of the
millennium assembly prompts me to invite you to reflect upon the role
that UNCITRAL has to play in the new millennium. Coordination As the "core legal body within the United Nations system in the field of international trade law", as stated in General Assembly resolution 37/106, UNCITRAL was given the mandate to further the progressive harmonization and unification of the law of international trade. The first specific task given to the Commission in pursuance of this mandate is to coordinate the work of organizations active in the field of international trade law and to encourage cooperation among them. The Commission has gone a long way to establish and maintain cooperation and you can be proud of significant achievements in this regard. Here a few examples:
Unfortunately, our efforts in establishing and maintaining cooperation have not been consistently successful. There is still a disturbing amount of overlapping or even outright conflicting initiatives being taken by various global and regional organizations, within and outside the United Nations system. This affects both more traditional areas of law, such as arbitration and transport law, as well as more modern subjects, such as electronic commerce, to mention but three. Insufficient coordination at the international rule-making level is sometimes worsened by lack of coordination in the implementation of multilateral or bilateral aid programmes supporting domestic law reform in recipient countries, which on occasion fail to give adequate consideration to trade law texts prepared by international formulating agencies, such as UNCITRAL. This "multilaterally-funded disunification of law", if I may say so, is in my view a particularly disturbing phenomenon, as it hits at the heart of UNCITRAL's mandate. The resulting fragmentation and dispersion of efforts render the task of unifying and harmonizing the laws a daunting one. The General Assembly has repeatedly expressed its concern that activities undertaken by other bodies of the United Nations system in the field of international trade law without coordination with the Commission might lead to undesirable duplication of efforts and would not be in keeping with the aim of promoting efficiency, consistency and coherence in the unification and harmonization of international trade law, as stated in its resolution 37/106 of 16 December 1982. The Secretariat is not less concerned about this situation. My colleagues in the International Trade Law Branch follow closely the work of other organizations in order to appraise the Commission of their activities. They regularly correspond with those organizations and, to the extent permitted by our limited resources, they participate in meetings of other international organizations so as to ensure that the Commission's viewpoints are duly taken into consideration. However, the Secretariat's means should not be overestimated. Duplication of efforts or inconsistencies of approach often result from activities carried out by other organizations in the implementation of mandates received from their governing bodies. Your secretariat cannot be expected to obtain the reversal of decisions made or endorsed by intergovernmental bodies. Here I should like to appeal to your cooperation, as representatives of Member States. Your secretariat remains committed to do its utmost to support the coordinating role of UNCITRAL, but only through a higher level of coordination of the positions taken by Member States at different international forums, within and outside the United Nations system, would we be able to promote efficiency, consistency and coherence in the unification and harmonization of international trade law, as envisaged by the General Assembly. Ratification It is not a secret that despite the universal relevance and usefulness of the instruments prepared by UNCITRAL, a great number of States have not yet enacted any of them. In view of the broad support for the legislative texts emanating from the work of the Commission among practitioners and academics in countries with different legal, social and economic systems, the pace of adoption of those texts has been slower than it needed to be. I would like to draw your attention to a letter sent on 17 May 2000, in which the Secretary-General has called upon all heads of State and Government to use the unique opportunity presented by the forthcoming Millennium Summit to rededicate themselves to the international legal framework and actively contribute to the strengthening of the international rule of law. Besides identifying 25 core treaties, which reflect the key policy goals of the United Nations, to be the focus of a sustained effort to encourage signature and ratification during the Millennium Summit, the Secretary-General's letter also requests every Member State to carry out a general review of all multilateral treaties deposited with him. He invites them to assess the participation by their countries in this vast legal framework developed by the international community under the umbrella of the United Nations. Governments are requested to respond by 1 August 2000 of their intention to sign, ratify or accede to any of the instruments on both lists during the Millennium Summit. As the Legal Counsel of the United Nations, I invite you to join in this effort. I appeal to all representatives and observers participating in the meetings of the Commission and its working groups to contribute, to the extent you in your discretion deem appropriate, to facilitate consideration by legislative organs in your countries of texts of the Commission. For those States who have not been able to ratify these treaties or enact legislation based on Model Laws due to a lack of resources, the Secretary-General has requested all United Nations agencies to provide appropriate technical assistance. The objective is to help States to become parties to these treaties and to implement them at the national level. Your secretariat stands ready to assist you to the extent our limited resources permit. This brings me to the last issue which I invite you to reflect upon. Law Reform In a joint statement issued on 5 July 1999 by the Secretary-General and the President of the International Chamber of Commerce (ICC), the United Nations and business representatives agreed that a continued cooperative partnership between the Organization and the private sector would do much to spread the benefits of globalization and reaffirmed that "there is great potential for the goals of the United Nations -- peace and development -- and the goals of business -- wealth creation and prosperity -- to be mutually supportive." In the past, the task of unifying, harmonizing and developing further the law of international trade was hardly ever mentioned among other efforts of the United Nations towards international peace and development. In recent years, however, we note a continuing and significant increase in the importance being attributed by Governments, domestic and international business communities and multilateral and bilateral aid agencies to the improvement of the legal framework for international trade and investment, so badly needed in the era of globalization. UNCITRAL has an important function to play in this process because it has produced and promotes the use of legal instruments in a number of key areas of commercial law which represent internationally-agreed standards and solutions acceptable to different legal systems. As we know, the work of the Commission on any given topic is not finished with the adoption of the relevant legal instrument. Indeed, the preparation of legal texts is complemented by the important training, information and technical assistance programme carried out by the Secretariat, to the benefit, in particular, of developing countries and countries whose economic systems are in transition. That programme encompasses information activities aimed at promoting knowledge of international commercial law conventions, model laws and other legal texts, as well as technical assistance to Member States in their efforts towards commercial law reform and towards the adoption of UNCITRAL texts. Largely due to the success that the Commission's texts have attained, the change to a market economy in a considerable number of countries and the emergence in the last few years of a number of new countries, there has been a dramatic increase in the number of requests for seminars and symposia and also for technical legal assistance. The Secretariat has therefore found itself saddled with an increased workload, while resources have been depleted. I should like to invite Member States, whether as donors or as recipients of assistance in commercial law reform, to work closely with the Secretariat to ensure that the conventions and model laws formulated by UNCITRAL are given due regard in that process. I also invite States, organisations and individuals to contribute to the technical assistance activities of the Secretariat by making voluntary contributions to the Trust Fund for UNCITRAL Symposia. We are thankful to those, unfortunately few, Governments that continue to assist us with contributions to the Trust Fund, as such contributions are instrumental in allowing us to meet the increasing demand for training and technical assistance. Since balanced representation is a requirement of worldwide acceptable legal texts, I should like to add a similar appeal with respect to the UNCITRAL Trust Fund for Travel Assistance. These are, ladies and gentlemen, a few concerns and ideas that I wanted to share with you concerning the role of this important body in the years to come. It would be of particular importance for Member States to consider ways to better equip the Commission and its secretariat to accomplish their coordinating function within the United Nations system and with other international organizations and to devise mechanisms for enhancing the coherence of mandates given by Member States to different organizations, within and outside the United Nations system. It would be further important to consider providing the Commission and its secretariat with adequate means for carrying out their functions of promoting larger adherence to international trade law instruments and providing the technical assistance to the modernization of domestic commercial laws. I hope that in the deliberations on the overall reform of the United Nations, Member States will be mindful of the importance of your work so that at the end UNCITRAL and its mandate may turn out reinforced. I also hope that these ideas may be conducive to a fruitful debate about the future role of UNCITRAL and I would be grateful if you transmit these concerns and ideas to your governments. I would now like to turn to the more immediate future. This year you will have an extremely busy session. The first main item on your agenda is the draft Convention on Assignment in Receivables Financing. At the beginning of the 21st century, in many countries financing is available only to the owners of real estate. As only a small percentage of the population of those countries owns real estate, a large part of the population does not have access to credit. In many other countries, only wealthy people have access to credit. You appreciate that in a competitive global market those countries will not be able to share the benefits of international trade and will become even poorer. In other countries, including developed countries, credit on the basis of receivables is subject to outdated legal requirements which impede the development of modern financing practices. Credit is available on the basis of receivables but is expensive. Small or medium-size businesses, consumers and investors have to pay a high cost. Those countries cannot achieve the maximum of their potential and will with time become less and less competitive in a global market place. In any country, whether developing or developed, national law or party autonomy has its limits when it comes to issues of mandatory law, such as the transfer of property rights, in an international context. Any agreement, no matter how well drafted, and any court decision or arbitral award, no matter how well made, may be unenforceable if challenged on the grounds of mandatory law or public policy, in particular in the context of an insolvency proceeding. Thus, in the very case for which security is given, that is debtor default, security may not meet its goal. The result is that credit will not be given or will be given at a high cost affordable only by few. The draft Convention on Assignment of Receivables, which your Working Group on International Contract Practices prepared in the course of the last four years, is a commendable effort to remedy this situation. It is an effort to ensure that a business with a good record can obtain financing at affordable costs, even if all it has is a reasonable expectation of a steady cash-flow. For example, consumer credit could be made available at lower interest rates, in view of the fact that credit-card operators would be able to convert their receivables against consumers to cash. Another example is that investors would be given access to international financial markets and thus to more credit at a lower cost. The draft Convention attempts to achieve those goals through a number of provisions, including those validating assignments of future receivables, bulk assignments and assignments made despite anti-assignment clauses in the underlying contracts. It also tries to achieve this result by enhancing certainty with regard to the law applicable to rights of claimants with competing claims in the assigned receivables. At the same time, the draft Convention is aimed at ensuring the rights of the assignor and the debtor. To the extent that the draft Convention does not give priority, for example, to the bank receiving a global assignment over the supplier of materials on credit with a retention of title in the materials, the assignor is not alienated from all its future income and is not deprived of the right to assign its future receivables to several financiers for different purposes. Similarly, the draft Convention enshrines the principle of debtor protection in the preamble and provides a number of debtor-protection mechanisms. These include the requirement for the debtor to be located in a Contracting State for the draft Convention to apply, the establishment of clear, objective criteria for the discharge of the debtor's obligation and the preservation of the debtor's defences and rights of set-off. All those attributes of the draft Convention justify the hope that it will receive wide acceptance and stand next to what has become a flagship of international trade law unification, the United Nations Sales Convention. As you set out to achieve a goal which is shared by all, that is increase the availability of lower-cost credit, I am confident that, with the spirit of professionalism and consensus that has become the hallmark and the key to UNCITRAL's success, you will be able to resolve the few remaining issues in a most successful way. Another project which you are about to complete is the "legislative guide on privately financed infrastructure projects". The rapidly expanding business activities and the growing world population require enormous investment in public infrastructure. However, there are insufficient public funds to finance the necessary projects, and private capital participation becomes necessary. Private investment may also be found beneficial as a tool for introducing new and more business-oriented management techniques in the provision of public services. The purpose of this guide is to assist domestic authorities and legislative bodies in the establishment of a favourable legal environment for promoting infrastructure development through private investment. In 1999, you considered all chapters of the draft legislative guide. This year, it is expected that, after a final consideration of the legislative recommendations and, where found necessary, of the notes thereto, you will be able to adopt the legislative guide. You will also be taking stock of the progress that has been done by the Working Groups on Electronic Commerce, Insolvency and Arbitration. The Model Law on Electronic Commerce, which was adopted by UNCITRAL in 1996, with one addition in 1998, has put the Commission at the forefront of developments in the legal field of electronic commerce. The Working Group on Electronic Commerce continues that important position as the primary forum for private law issues in electronic commerce by preparing uniform rules on electronic signatures. The Commission will have before it the reports of the Working Group on the work of its thirty-fifth and thirty-sixth sessions. At its thirty-sixth session, the Working Group adopted the text of draft articles 1 and 3 to 12 of the Uniform Rules and recommended that draft articles 2 and 13 of the Uniform Rules, together with a draft of a Guide to Enactment to be prepared by the Secretariat, should be reviewed by the Working Group at the next session. The Commission may also wish to have a preliminary exchange of views regarding possible future work in the field of electronic commerce. The Commission will also be apprised of the work done by the Working Group on Insolvency Law, which concluded its twenty-second session with a recommendation that the Commission undertake further work on that topic, for which the Commission seems to me to be the ideal forum with its excellent achievement in the form of the Model Law on Cross-Border Insolvency and with its truly universal representation of all countries and legal systems. The Commission will also have before it the report of the thirty-second session of the Working Group on Arbitration, at which the Working Group considered issues relating to conciliation, requirement of written form for the arbitration agreement and enforceability of interim measures of protection. Other topics on your agenda include, as in previous years, notes and reports on activities carried out by the Secretariat, such as Monitoring implementation of the 1958 New York Convention, training and technical assistance, Case Law on UNCITRAL Texts (CLOUT). I would like to point out two important issues on which the Commission may wish to decide to undertake future work. As you know, at its twenty-ninth session in 1996, the Commission decided that the Secretariat should be the focal point for a broadly-based gathering of information, ideas and opinions with a view to establishing the need for uniform rules in the area of maritime transport and in related areas where no such rules existed and with a view to achieving greater uniformity of laws than had so far been achieved. At the current session the Commission will have before it a report by the Secretariat which describes the exploratory work undertaken so far by the Secretariat in cooperation with the Comité Maritime International (CMI) and makes suggestions as to how the work might continue. The Commission will also have before it a brief note by the Secretariat describing developments in the field of secured transactions law in the last twenty years, including activities towards harmonization by various international organisations, identifying problems left unaddressed and presenting possible solutions. The Commission may wish to discuss the note with a view to deciding whether any further work is desirable and feasible, including the question whether it should resume its earlier work on security interests. Lastly, I would like to mention two special events that the Secretariat has organized this year: on 6 July there will be a Transport Law Colloquium, jointly organized with the CMI, on possible ways of enhancing uniformity in the field of transport law and on 7 July, with some executive briefings already on 6 July, the Secretariat, together with the Commercial Law Association (CLA), is organizing a UNCITRAL/Business Forum to inform corporate counsel and other business representatives about UNCITRAL's activities and achievements and to obtain their input as to possible future work based on practice needs. Ladies and gentlemen, this year you will have a particularly work-intensive session. But I am sure that it will also be a very interesting one. With these remarks, I have the pleasure of declaring the Session open. I wish you the best of success in your deliberations. I should now like to
turn to the second item on the agenda, the election of officers. Are there
any nominations for the position of Chairman? 12 June 2000 |