23 September 1996


23 September 1996

Press Release


19960923 Chairman Introduces UNCITRAL Report, As Committee Begins Its Substantive Work

The United Nations Commission on International Trade Law (UNCITRAL) this year adopted legal guidelines on both arbitral proceedings and electronic commerce, the Chairman of that body told the Sixth Committee (Legal) this afternoon, as the Committee began the substantive work of its current session.

Citing the UNCITRAL Notes on Organizing Arbitral Proceedings and the UNCITRAL Model Law on Electronic Commerce, Ana Isabel Piaggi de Vanossi said that while they did not impose any legal obligations on States, they represented a useful contribution for the resolution of international commercial disputes.

Ms. Piaggi de Vanossi said the Model Law on Electronic Commerce had been developed to begin the process of replacing paper-based information in the age of electronic digital interchange. Its aim was to provide legal solutions for specific problems without in any way preventing a State from extending the scope of the law.

Speakers welcomed the new contributions to international trade, both for the scope of their recommendations and their non-binding nature. The representative of the United States said the Model Law represented an important milestone in facilitating trade based on the use of computers. However, the representative of Germany was of the view that its rules on electronic transport documents had reached the limits of sensible regulation.

Statements were also made by the representatives of Kenya, Slovakia, Japan, Romania and Iran.

The Committee will meet again at 10 a.m. on Tuesday, 24 September, to continue its discussion of UNCITRAL's report.

Committee Work Programme

The Sixth Committee (Legal) met this afternoon to begin its substantive work, taking up the report of the United Nations Commission on International Trade Law (UNCITRAL) on the work of its 1996 session (document A/51/17). Meeting in New York from 28 May to 14 June, the Commission adopted a text entitled, "UNCITRAL Notes on Organizing Arbitral Proceedings". It asked the Secretariat to produce it as a separate publication and disseminate it widely, including to arbitral institutions, chambers of commerce, and relevant national and international professional associations.

The Commission also adopted the UNCITRAL Model Law on Electronic Commerce and asked the Secretary-General to transmit that text, together with a Guide to Enactment of the Model Law, to Governments and other bodies, the report states. It further recommended that all States give favourable consideration to the UNCITRAL Model Law on Electronic Commerce when they enact or revise their laws, in view of the need for uniformity of the laws on alternatives to paper-based forms of communication and information storage.

The Commission also discussed its future work on legal aspects of electronic data interchange and related means of communication, the report states. In the area of transport law, the Commission decided that the Secretariat should be the focal point for gathering information on problems that arose in practice and their possible solutions. With respect to electronic commerce, it asked the Secretariat to prepare a background study on the issues of digital signatures and service providers, based on an analysis of laws currently being prepared in various countries. On the basis of that study, the Commission's Working Group would examine the desirability and feasibility of preparing uniform rules.

With respect to "build-operate-transfer" projects, the Commission felt it would be useful to provide legislative guidance to States preparing or modernizing their relevant legislation, the report states. On the question of cross-border insolvency, the Commission expressed the hope that its relevant Working Group would be able to submit a draft legislative text for consideration at its next session in 1997.

The Commission also considered the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the report states. Regarding a project aimed at obtaining information on implementation of the Convention, it called on all States parties which had not yet completed the related questionnaire to do so. The Commission also asked that adequate resources be made available to its secretariat for its work in assembling and publishing case law on UNCITRAL texts.

The report also reviews UNCITRAL actions with respect to training and technical assistance. Specifically, the Commission asked the Sixth Committee

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to recommend that the Assembly include on the agenda of the United Nations Pledging Conference for Development Activities the following: the UNCITRAL Trust Fund for Symposia; and the Trust Fund for Granting Travel Assistance to Developing States Members of UNCITRAL.


ANA ISABEL PIAGGI DE VANOSSI (Argentina), Chairman of UNCITRAL, introduced that body's report. She said that in her country, entrepreneurial activity by the State had been reduced considerably, which implied far- reaching and noteworthy changes. Adoption of the UNCITRAL Model Law was on the agenda in Argentina's Parliament. The UNCITRAL Legal Guide on the drafting of international construction contracts was being used.

In light of UNCITRAL's history, it was not surprising that the Commission's agenda remained full, she said. In its Notes on Organizing Arbitral Proceedings, the Commission had adopted a variety of texts encompassing such topics as agreement on a set of arbitral regulations; rules on language; place of arbitration; confidentiality; written communications; use of telefax and other electronic media; negotiations and their effect on deadlines; the consequence of late submission; physical evidence other than documents; witnesses; and communication of arbitral awards. The Notes aimed at helping arbitration experts; they did not establish new legal requirements, nor impose any mandatory obligations upon the parties. They simply represented a useful contribution for the resolution of international commercial disputes.

The Model Law on Electronic Commerce, adopted by UNCITRAL, set out to replace the tradition of paper-based information in the new age of electronic data interchange, she said. Electronic communication was rapidly replacing paper as the medium for the transmission of contractual information. The UNCITRAL had decided to prepare such a Model Law because progress in that area at the national level had been mediocre. The Model Law provided for legal solutions for specific problems. It also had provisions to replace procedures such as maritime bills of lading with electronic methods. However, it did not prevent a State from extending the scope of the law to cover its own plans in the exploration of electronic data interchange.

She said the Commission had also entrusted its Working Group on international commercial practices to prepare regulations on receivables. In future, the Commission planned to examine three additional items: cross- border insolvency; "build-operate-transfer" projects; and enforcement of the 1958 New York Convention. It would be providing a legislative guide for States seeking to harmonize their legislation on "B.O.T." projects. It would also be reviewing the manner in which the 1958 New York Convention had been incorporated into the legal orders of contracting States.

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S. THUITA MWANGI (Kenya) said adoption of the Model Law on Electronic Commerce had been the main outcome of UNCITRAL's session. The Model Law was designed in such a way that it might be adopted by States at all stages of development. That was because it recognized that some States remained heavily reliant on paper-based commerce, which requires signatures and original hard copies of documents in order to form a contract. That was relevant, since the underlying goal was to facilitate electronic commerce and not impose particular means of communications.

He said the UNCITRAL Notes on Organizing Arbitral Proceedings were also useful, not only as guidelines, but also because they provided ready answers to questions concerning arbitration while remaining non-binding. They would provide a quick reference, as well as a time- and cost-saving tool. The Notes should be disseminated as widely as possible.

He said UNCITRAL was the appropriate body to develop a legal framework to govern "build-operate-transfer" projects and expressed pleasure that the Secretariat had been asked to come up with a draft text of a legislative guide. Also, the importance of training and technical assistance programmes provided by the Secretariat could not be overemphasized. However, increasing demand might result in overstretching already scarce resources. Kenya had responded to the appeal for voluntary contributions for that purpose but its assistance had not been noted; it was hoped that omission would be corrected. He said he also hoped there would be an agreement on a recommendation to place the Trust Funds for Symposia and for Travel Assistance on the agenda of the United Nations Pledging Conference for Development Activities, as requested by the Commission.

ROLF WELBERTS (Germany) expressed satisfaction that the decision to relocate the UNCITRAL's secretariat from Vienna to New York had been abandoned. Austria had been a gracious and generous host, and Germany welcomed the end of "this futile discussion".

Turning to the Commission's report, he said that the Notes on Organizing Arbitral Proceedings were of particular practical importance. The value of the draft Guidelines for Preparatory Conferences and Arbitral Proceedings in Commercial Arbitration would increase even more once the study carried out by the UNCITRAL secretariat and the International Bar Association on the implementation of the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards was concluded. That Convention, the most successful international convention developed under UNCITRAL's auspices, had already been signed by 108 States. However, only 32 of them had completed the questionnaire issued by the secretariat.

He said Germany supported the resolution proposed by the Commission, based on its conviction that the Model Law would give state-of-the-art answers to many questions that could not now be answered under the existing laws of

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Member States. Germany had some misgivings on the content of the Model Law, but would not stand in its way. The Model Law was based on the principle of media neutrality. Its rules on electronic transport documents reached the limits of sensible regulation. In the absence of an international register, he did not believe it possible to guarantee effective protections. The Commission had set itself a task likely to result in tremendous time pressure. Hardly a State would be able or willing to respond to the crucial question of digital signature in the context of international trade alone.

In future, the Commission would have to concentrate more on the implementation and enforcement of existing rules of international commercial law than on the creation of new conventions and rules, he said. Work on the UNCITRAL case law texts must also be continued. As that effort grew and became more widely known, it would be increasingly used by courts dealing with difficult cases. It was also reasonable to expect that access to that case law would also soon be made possible on the Internet.

JAN VARSO (Slovakia) said his country was benefiting from the wealth of experience accumulated by UNCITRAL in the field of commercial law in its efforts to transform its own economy and contribute to the progress of world trade. Slovakia had acceded to the conventions drawn up by the UNCITRAL, and the Commission's Model Laws were an important source of inspiration for its internal legislation.

The report of the Commission's recent session outlined the current situation and future trends in the field of international commercial law, he said. The UNCITRAL Notes on Organizing Arbitral Proceedings should provide a useful practical guide. The Commission should continue its works on harmonizing principles of arbitral organization.

He said the text of the UNCITRAL Model Law on Electronic Commerce had been transmitted to his country's legislative authorities and would help improve Slovakia's legislation in that field. Nevertheless, the legal philosophy known as the "law on electronic commerce", and its place in the Commission's future activities, required deeper analysis. No doubt adoption of the Model Law reflected the current situation, which in recent years had been dominated by electronic communication. However, "electronic rules" did not fall under the classic norms of civil law but belonged rather in the category of technical norms.

MAKOTO NAKAMURA (Japan) praised the Commission's work in the harmonization of international trade. Drawing attention to progress made in the field of electronic commerce, he called for continued work on the question of digital signatures. The deliberations on "build-operate-transfer" projects should remain impartial. Addressing questions before the two Working Groups, he expressed the hope that creditors and debtors would be treated as equals.

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ROBERT R. ROSENSTOCK (United States) said the UNCITRAL Notes on Organizing Arbitral Proceedings would be an important addition to the field of international arbitration. Likewise, the completion of the Model Law on Electronic Commerce was an important milestone for facilitating trade based on the use of computers. In many States, enactment of the Model Law would provide a new legal infrastructure and help create the predictability needed to foster commerce in that new technological era. The UNCITRAL Model Law established the Commission at the forefront of the development of international commercial law. The Commission's decision to consider the topics of digital signatures, as well as new rules on electronic contracting, was welcome.

The United States supported UNCITRAL's efforts regarding "build-operate- transfer" contracts. That work appeared to have considerable support among both developing States and international lending agencies. The United States also welcomed the Commission's work on rules concerning procedural aspects of cross-border insolvency. Those rules would probably provide for international judicial cooperation, recognition of and coordination with foreign proceedings, and access for foreign representatives. He drew attention to the Commission's efforts to draft a multilateral convention on receivables financing and the possibility that a new path could be opened to provide new credit at reasonable rates to underserved countries. The Commission had also opened the door to possible future work on harmonizing the law on carriage of goods by sea.

DUMITRU MAZILU (Romania) said the Commission's Notes on Organizing Arbitral Proceedings and the suggestions made in its Guide to Enactment of the Model Law represented an important contribution to the development of the international trade law. Precise rules and regulations in that field were useful for countries in transition to a free-market economy. However, it was necessary to avoid establishing any requirement beyond existing laws, rules and practices. The UNCITRAL's Notes must not limit the flexibility of arbitral proceedings, in which parties could agree to allow the arbitral tribunal broad discretion in the conduct of its proceedings.

He said UNCITRAL's Model Law on Electronic Commerce was a concrete step forward in the use of electronic means in any trade transaction. Those included such elements as the supply or exchange of goods or services, distribution agreements, commercial representation, factoring, leasing, consulting, engineering, licensing, investment, financing, banking, insurance, and carriage of goods or passengers. He shared the Commission's view that the term "commercial" should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not.

Successful implementation of "build-operate-transfer" projects had often enabled States to achieve significant savings in public expenditure, he said. They were then able to reallocate resources that otherwise would have been

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invested in infrastructure. He said UNCITRAL seminars and briefing missions had been particularly useful for countries lacking expertise in the area of trade and commercial law.

SEYED HOSSEIN ENAYAT (Iran) said it was gratifying for third world nations that the Commission had been at the disposal of both developed and developing countries alike, codifying rules allowing all parties to participate in international commerce.

The legal status of electronic documents and other electronic data varied from one legal system to another, he said. In some States, electronic documents had a legal status almost equal to those on paper; in others, their legal status was uncertain. Given those circumstances, the Model Law should help remove obstacles to the use of electronic documents in the commercial field in general, as well as in specific areas cited in the Model Law. However, Iran did not view the Model Law as intended to alter traditional rules governing paper-based communications. It was therefore necessary to clarify the draft Guide to reflect those considerations.

Addressing future work regarding electronic commerce, he said that although preparation of a background study on issues concerning digital signature was important, priority should be given to the work on service providers and to other related matters. Those could include minimum standards for performance, the effects of such rules and agreements on third parties, and the scope of assumption of risk by the end parties. Also of great importance was work on preparation of model legislation for judicial cooperation in cross-border insolvencies, as well as on court access for foreign insolvency administrators. It was hoped the Commission's Working Group would submit its draft legislative text on the matter to UNCITRAL's next session.

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For information media. Not an official record.