SIXTH COMMITTEE (LEGAL) CONCLUDES TWO-DAY DISCUSSION OF UNCITRAL REPORT

Press Release
GA/L/3072

SIXTH COMMITTEE (LEGAL) CONCLUDES TWO-DAY DISCUSSION OF UNCITRAL REPORT

The Sixth Committee (Legal) this afternoon concluded its two-day consideration of the 1998 session of the United Nations Commission on International Trade Law (UNCITRAL), hearing an urgent appeal from the Commission's Chairman for more resources to meet growing demands for its training and technical assistance programmes.

The UNCITRAL Chairman, Dumitru Mazilu, said many delegations had underlined the need for more training for nationals from developing countries and those from countries with economies in transition. As he had noted at the start of the discussions yesterday, the Commission's secretariat needed additional resources to meet those demands. The secretariat was too small, considering the work involved in the further development of international trade law, he said.

In statements this afternoon, many speakers emphasized the need for participation of experts from developing countries in the Commission's work. The representative of Kenya said such participation was very important for the successful harmonization of international trade law. He also noted with regret the lack of response to an appeal for voluntary contributions to the trust fund for travel assistance to Commission members from developing countries.

The representative of the United States said she was concerned that market applications, and the commercial and contractual uses of digital signature or dual-key systems and other technologies had not yet become clear. Supporting particular regulatory systems at the current stage might not only be premature, but could actually restrict the development of commercial markets. She proposed that, should there be an inability to reach consensus on the issue, alternative topics be considered in the meantime.

Statements were also made by the representatives of India; Panama, on behalf of the Rio Group of Countries; Finland, on behalf of the Nordic countries; Russian Federation, Iran, Australia, Japan, Italy, Hungary, Czech Republic, Belarus, Ukraine, Canada, New Zealand, Indonesia and Pakistan.

The Committee will meet next on Friday, 16 October, to begin consideration of the report of the Special Committee on the Charter of the United Nations and on the Strengthening of the Role of the Organization.

Committee Work Programme

The Sixth Committee (Legal) met this afternoon to continue consideration of the report of the United Nations Commission on International Trade Law (UNCITRAL) on the work of its thirty-first session held in New York, from 1 to 12 June. (For background information on the report, see Press Release GA/L/3071 of 12 October 1998).

Statements

DINANATH MISHRA (India) said the draft legislative guide being prepared by UNCITRAL should be designed to promote private investments and protect returns of such investments, while also protecting interests of host governments and end users. He noted the substantial progress made on the subject of assignment in receivables by the Working Group on International Contract Practices. He said the Working Group and UNCITRAL should continue to examine the issue of debtor protection and conflicts of priority at their next session to find an acceptable system of uniform law for a convention to be adopted by the year 2000.

His delegation shared the preliminary conclusion of the Working Group on Electronic Commerce that the preparation of draft uniform rules on digital signatures and certification authorities was feasible. He also agreed that, at the present stage, no decision should be taken on its exact scope and form.

HERNAN TEJEIRA (Panama), speaking on behalf of the Rio Group, said that despite its benefits, the harmonizing of international trade law was a slow and complex process. Panama was convinced that the consolidation of a trade law regime had a fundamental role which was particularly evident in the case of developing countries. The efforts of the UNCITRAL secretariat in exploring new forms of technical assistance was appreciated.

Citing the important work of UNCITRAL on electronic commerce, he said several States had begun to study domestic incorporation of the Model Laws on Electronic Commerce. He expressed the hope that in the near future those principles would have universal application. While he supported the proposal of an international convention on the subject, he considered it preferable, for the moment, to allow time for the effects of the Model Laws to be realized before commencing work on a convention.

MARJA-LIISA LEHTO (Finland), speaking on behalf of the Nordic Group, supported the objective of the guide to promote investments and participation of various operators in privately financed infrastructure projects. However, the Commission should try to prevent the project from becomes unnecessarily broad and detailed as it might lose its flexibility. The same note of caution could be valid in view of the usefulness of the guide in the future to national authorities and legislative bodies wishing to establish a favourable legal framework for promoting such projects.

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The draft uniform rules on the legal issues of digital signatures and certification authorities was of considerable importance for the development of electronic commerce, she said. It was essential that the project be provided with all necessary resources so that it could proceed in an efficient manner.

VLADIMIR Y. TARABRIN (Russian Federation) said his delegation viewed positively the results of the Commission's work during its last session and the efforts of its working groups. The Commission was truly carrying out its mandate of promoting the unification and progressive development of international trade law, while focusing on the real problems and producing results in the form of legal texts of great political value. The Russian Federation welcomed the Commission's work on the legislative guide on privately financed infrastructure projects, which could help create a positive investment climate. It would continue to participate fully in the drafting of the text.

He stressed the importance of the Commission's work on the preparation of uniform rules on electronic signatures and the need for an international law to regulate the use of cyberspace. The Commission should significantly extend and promote the popularization of its work and access to its documents on the Internet. He urged the strengthening of UNCITRAL's secretariat.

SAEID MIRZAEE YENGEJEH (Iran) said the draft chapters of the legislative guide on privately financed infrastructure projects, as currently formulated, offered the necessary flexibility for national legislatures and other authorities to take account of the realities in the field. He favoured the continuation of the current approach in the preparation of the remaining chapters. He also supported the inclusion of model contractual clauses for infrastructure agreements in the draft guide.

He welcomed the establishment of a system for collecting and disseminating court decisions and arbitral awards relating to the conventions and model laws prepared by the Commission, and commended the publication of five additional sets of abstracts. He underlined the importance of the training and technical assistance programmes implemented by the Commission's Vienna-based secretariat. He urged participation in the Commission's work by developing countries and the strengthening of its secretariat.

CATE STEAINS (Australia) said that in many ways, UNCITRAL was a "model citizen" in the United Nations. It represented the thoughts and ideas of a broad range of countries and was continually looking outward in search of new ideas and improved ways of doing things. Referring to the New York Convention Day and the Uniform Commercial Law Colloquium in June, she said that the debate at that time had indicated the strong interest in UNCITRAL's work and highlighted possible future areas of work for the Commission.

Speaking of the need to examine UNCITRAL instruments in a domestic content, she said that Australia had established an electronic commerce expert group last year. The group had recommended that impediments to electronic

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commerce should be removed by legislation based on UNCITRAL's Model Law. UNCITRAL'S work in the areas of training and assistance, promoting practical uniform legal texts and providing technical assistance to governments, remained crucial to the achievement of its mandate.

HIROSHI KAWAMURA (Japan) said it was to be commended that legal experts were considering issues from both the legal and technical points of view. The tradition should be maintained and the work of the Commission should never become politicized. He expressed the hope that the guide on privately financed infrastructure projects would gain wide acceptance and be approved at the Commission's next session. The guide should be clear and readily understandable and could, for example, cite examples of concrete articles for easy reference.

Uniform rules on electronic signatures were of great importance and attracting a great deal of world attention, he said, expressing the hope that progress could be made as soon as possible in light of the rapid developments. At the same time, though, he believed it was necessary to maintain technical neutrality and party autonomy.

MAURO POLITI (Italy) said the legislative guide on privately financed infrastructure projects would be extremely useful for many governments in reviewing and modernizing their legislation in that area. In the preparation of the remaining chapters of the guide, he considered it extremely important to obtain the advice of outside experts from the public and private sectors and to consult with experts from developed and developing countries, as well as from countries with economies in transitions.

The new provision added to the Model Law on Electronic Commerce was an improvement to the text, he said. He also supported the Commission's efforts to prepare a set of uniform rules on the legal issues of digital signatures and certification authorities. He expressed confidence that work on the draft convention on assignment in receivable financing would be completed next year in time for submission of the draft for adoption in year 2000.

ARPAD PRANDLER (Hungary) said the Working Group on Electronic Commerce should concentrate on the preparation of draft uniform rules on electronic signatures and should not be distracted by proposals suggesting it prepare a draft convention. He encouraged UNCITRAL's secretariat to continue to increase the availability of UNCITRAL documents on the Internet in all six official United Nations languages.

On assignment in receivables financing, he said the text should take the form of a draft convention to provide the appropriate degree of unification and predictability in view of the differences in various legal systems. He hoped the Working Group on International Contract Practices would proceed with its work expeditiously so a draft convention could be adopted by the year 2000.

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CAROLYN L. WILLSON (United States) said there was continuing progress on the draft convention on accounts receivable financing which had the potential to significantly increase the availability of lower cost commercial credit to countries where such credit was in short supply. The current draft contained optional sections so that ratifying States could choose a particular legal system of priorities for creditors. The United States would recommend that ratifying States consider adoption of a priority system involving registries, which would provide open notice to new creditors of any prior financing commitments.

Progress on the topic of international rules for electronic signature systems had been a bit difficult, given the wide differences as to the direction in which such rules should go, she said. Some States preferred a regulatory approach which, in large measure, rested on a particular technology, often called digital signature or dual-key systems. Other States, including the United States, remained concerned that market applications and the commercial and contractual uses of those and other technologies had not yet become clear. Thus, supporting particular regulatory systems at the current stage might not only be premature, but could actually restrict the development of commercial markets.

She proposed that, should there be an inability to reach consensus on the issue, alternative topics be considered in the meantime. She concluded by describing current United States efforts to implement several recent model laws of the Commission.

MARTIN SMEJKAL (Czech Republic) said work on the draft legislative guide on privately financed infrastructure projects was responding to the expectation of States. He urged flexibility in the work on the remaining chapters of the draft text. He said it would be premature to refer the next stage of the task to a working group. He said a comprehensive review of laws on arbitral awards would be timely. He saw the possibility of refining and updating legal instruments on the subject such as the 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards or UNCITRAL Model Law on Arbitral Awards of 1985. The issue of delays, costs and protection of arbitrators against personal liabilities could be considered in any review of the New York Convention, he said. His delegation would welcome the allocation of two or three working days for discussion of future work in the area of arbitration.

THUITA MWANGI (Kenya) said the structure of the legislative guide on privately financed infrastructure projects should be kept simple and in the form of an analysis of the relevant issues and legislative recommendations. He was pleased that the Commission recognized the importance of establishing an appropriate balance between the objective of attracting private investment and the protection of the interests of the host government and the users of the infrastructure. Concerning method of work on the remaining draft chapters of the guide, he believed that given the level of interest and limited

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expertise available from developing countries, the discussions should not be entrusted to a working group.

He said a shortage of funds had prevented the secretariat of UNCITRAL from fully discharging its mandate in rendering training and technical assistance programmes to developing countries. Equally important to the success of harmonization of international trade law was the full participation by all members of the Commission in its deliberations. Regrettably, there had not be a response to an appeal for voluntary contributions to the trust fund for granting travel assistance to developing countries that were members of the Commission.

VALERY ZHDANOVICH (Belarus) expressed the hope that work on the draft convention on accounts receivable financing would be completed as soon as possible. The legislative guide on privately financed infrastructure projects would also be a useful tool in advising and updating national legislations, particularly in countries with economies in transition which had insufficient experience in such projects.

In light of the timeliness of the topic, he said it was extremely important to continue work on the issues related to electronic commerce. Referring to the importance of access to and publicizing of UNCITRAL texts, he said he was pleased to see a search engine had been put in place on its website. He added that access to CLOUT, which covered case law on UNCITRAL texts, via the Internet, was particularly useful because of its publication in all six United Nations languages.

VASYL KORZACHENKO (Ukraine) said his delegation supported the approach taken by the Commission in preserving the appropriate balance between the attraction of private investments for infrastructure projects and the protection of interests of the host governments and end users. The draft legislative guide being prepared by the Commission on the subject would be a useful tool for his Government in updating national legislation on such projects.

He stressed the importance of the Commission's work on electronic commerce, noting its key role in developing and harmonizing the rules governing international trade. The project was now considered to be of high priority as it could help States overcome barriers to international trade. The elaboration of draft uniform rules on electronic signatures should be continued, with the question of a draft convention being discussed at a later stage. Ukraine attached importance to the question of training and technical assistance and hoped the programmes would be expanded. Those programmes must be combined with the adoption of new conventions and model laws on international trade law.

JOHN VON KAUFMANN (Canada), in referring to the conferences on New York Convention Day and the Uniform Commercial Law Information Colloquium, said both had provided a forum to publicize the work of the Commission and to discuss directions for possible future work. Canada was participating in both

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the Working Group on Electronic Commerce and the Working Group on International Contract Practices addressing receivables financing.

Noting that the expertise of the Hague Conference on Private International Law had contributed to the draft convention on account receivables and that the International Maritime Committee was working with the secretariat in preparing for possible future work on the international carriage of goods, he expressed the hope that that type of collaboration would continue.

VICTORIA HALLUM (New Zealand) stressed the importance of the Commission's work on electronic commerce, noting that it was a subject matter that went to the heart of its mandate. She said technological developments had created new ways of conducting business. It was vital that the international legal community kept pace with them and ensured that the legal frameworks in place accommodated the new commercial environment. The New Zealand Law Commission had recently completed its first study on electronic commerce and had issued its report, which was available on the Internet (www.lawcom.govt.nz). The report drew substantially on the UNCITRAL Model Law and on the Commission's work at large.

With regard to the consideration of electronic signatures by a working group of the Commission, she said her delegation's view was that the uniform rules should not seek to over-regulate the use of such signatures. The standards should be sufficiently low to retain the choice of individual parties on the level of security they wished to apply to a particular transaction. Such flexibility was necessary if the use of electronic commerce was to be encouraged while remaining consistent with the principles of the UNCITRAL Model Law, she said.

MARTY NATALEGAWA (Indonesia) said the role of UNCITRAL was pivotal in meeting the numerous challenges and obstacles developing countries faced in the context of globalization. Now more than ever, developing countries should be accorded greater opportunity to participate in the work of UNCITRAL to help them make unique and valuable contributions.

The guide on privately financed infrastructure projects offered potential benefits to countries in updating and codifying national laws, particularly for those States that lacked the expertise and experience in undertaking the execution of such projects. He emphasized the need for representation of experts from developing countries in working groups. He added that dissemination of information on UNCITRAL's legal texts was central to its efforts in harmonizing and developing international trade law. He expressed the hope that the necessary financial resources would be mobilized for training activities, especially for the developing countries.

MUHAMAD NAJM AKBAR (Pakistan) noted with satisfaction the emphasis that was being placed on the importance of keeping an appropriate balance between the objective of attracting private investment for infrastructure projects and

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the interests of the host government and the users of the infrastructure facility.

He said he was pleased at UNCTAD's offer of cooperation on rules relating to electronic commerce, particularly its interest in the question of how to better integrate developing countries into international electronic commerce. He also believed that the Commission's work on assignment in receivables financing was of considerable importance for developing countries while they were encouraging foreign investment and were liberalizing their economic policies. He noted with concern the fact that the Commission was facing difficulties in the effective execution of training programmes, saying those programmes and dissemination of texts were pivotal areas of the Commission's work.

DUMITRU MAZILU, Chairman of UNCITRAL, responding to comments made during the debate, said suggestions made by representatives had been noted and would be taken into account in the Commission's future work. He underlined, however, that the Commission took into account in its work "all schools of [legal] thought", including those from developing countries and economies in transition, and would continue to do so.

He said many delegations had underlined the need for more training for nationals from developing countries and those from countries with economies in transition. As he had noted in his introductory statement yesterday, the Commission's secretariat needed additional resources to meet those demands. The secretariat staff were highly qualified and were doing their best, but the question was that the secretariat was too small, considering the work involved in the further development of international trade law. He again appealed to the Committee for urgent assistance to enable the Commission to fulfil its mandate.

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