LEGAL COMMITTEE MEMBERS DISCUSS PLAN TO ENLARGE UN COMMISSION ON INTERNATIONAL TRADE LAW

Fifty-sixth General Assembly

Sixth Committee

2^nd Meeting (AM)

LEGAL COMMITTEE MEMBERS DISCUSS PLAN TO ENLARGE

UN COMMISSION ON INTERNATIONAL TRADE LAW

Delegates Say Change in UNCITRAL Membership Has Not Matched

Expansion of World body; Views Differ on Extent of Proposed Revision

Support for increasing the membership of the United Nations Commission on International Trade Law (UNCITRAL) was expressed by several speakers this morning as the General Assembly's Sixth Committee (Legal) took up the Commission’s annual report.

In calling for elections as soon as possible to increase the number of seats from 36 to 72, which is the Commission’s recommendation, the representative of Canada said that membership had not increased since 1973 [from 29 to 36], despite the considerable expansion of United Nations Member States.

UNCITRAL was established by the General Assembly in 1966 to unify international trade law as a way of encouraging the globalization of international trade and the free flow of goods.

The representative of Chile, on behalf of the Rio Group of Central and Latin American Countries, recommended that membership be limited to 60 seats, saying that any increase should guarantee that the Commission continue to be representative of all juridical and economic regimes while still maintaining the Commission’s effectiveness.

The representative of Sweden, speaking for the Nordic countries, also questioned the advisability of doubling the membership from 36 to 72.  However, he said, since there did not appear to be financial implications nor negative implications regarding the effectiveness of the work of the Commission, those countries could support the proposal.

Speakers unanimously expressed appreciation for the notable breakthroughs of UNCITRAL in many areas.  They cited, in particular, the benefits the international community would derive from the Commission’s recent adoption of the draft convention on assignment of receivablesin international trade and the draft model law on electronic signatures.

The Chairman of UNCITRAL, Alejandro Ogarrio (Mexico), introducing the report, said the Commission had adopted new working methods to adapt to the unprecedented increase in its workload.  However, there had to be a commensurate upgrade in the secretariat services available to the Commission.

He said the tragic events of last month had prompted the Organization as a whole, and the Sixth Committee in particular, to increase their efforts to develop concrete and effective measures to combat terrorism in all its forms.  He noted the relationship between trade facilitation, the rule of law and international peace.  While the trade law instruments prepared by UNCITRAL did not attract as much public attention as other instruments, they did indeed play an important role in the quest for international peace and security.

The representatives of India, France and China also spoke on the report.

Also this morning, the Committee elected three vice-chairmen:  Siddig M. Abdalla (Sudan); Zolt Hetesy (Hungary); and Alexander Marschik (Austria).  Mahmoud M. Al-Naman (Saudi Arabia) was appointed Rapporteur.  The Committee elected Rohan Perera (Sri Lanka) as Chairman of the Working Group of the Sixth Committee on Measures to eliminate terrorism.

In another action, the Committee adopted its work programme for the session covering 15 items, including the topic of measures to eliminate international terrorism, the scope of the legal protection under the Convention on the safety of United Nations and Associated Personnel and the report of the International Law Commission.  The Sixth Committee was expected to conclude its work for the session on 23 November.

Opening the meeting, the Chairman of the Committee, Pierre Lelong (Haiti), said he would make every effort to contribute to the success of the Committee’s work, and hoped he could count on the cooperation of Committee members.

The Commission will meet again at 3 p.m. today to hear other speakers on the UNCITRAL report.

Committee Work Programme

The Sixth Committee (Legal) met this morning to organize its agenda for the session and to begin its consideration of the report of the United Nations Commission on International Trade Law (UNCITRAL) (A/56/17).  UNCITRAL was established by the General Assembly in 1966 to unify international trade law so as to encourage the globalization of international trade and the free flow of goods.

In its report this year, the Commission recommended that the Assembly increase UNCITRAL membership from the current 36 States to 72, while maintaining the current proportion between the regional groups, and that the new members be elected as soon as possible.

During its annual session, held this year from 25 June to 13 July in Vienna, the Commission finished its negotiations on the draft convention on assignment of receivablesand is submitting it to the Assembly with the recommendation that it be adopted as a United Nations convention.  The draft sets out a uniform law on assignment of receivables. 

The main purpose of the draft Convention is to increase the availability of credit at more affordable rates for traders, consumers and public entities.  In the context of transactions covered by the draft Convention (such as factoring, forfeiting, securitization, asset-based lending, refinancing and project financing), manufacturers, wholesalers, retailers and consumers of goods and services may obtain more lower-cost credit by using their good business record and their future cash flow.

The Commission also finalized and adopted a draft UNCITRAL Model Law on Electronic Signatures and a draft Guide to Enactment.  The report states UNCITRAL’s belief that the model law will significantly assist States in enhancing their legislation governing the use of modern authentication techniques and in formulating such legislation where none exists.  UNCITRAL recommends that all States give favorable consideration to the model law in light of the need for uniformity of the law applicable to alternatives to paper-based forms of communication, storage and authentication of information.

The Law is to apply where electronic signatures are used in the context of commercial activities (although it will not override any consumer protection laws).  The new instrument builds on the principles embodied in the UNCITRAL Model Law on Electronic Commerce adopted in 1996.  The Model Law is intended to provide certainty as to the legal effectiveness of certain electronic authentication techniques, and to provide a standard as to the conduct to be observed by the various parties involved in an electronic signature process (the signatory and any relying party, as well as any certification service provider that might intervene in the process). 

The new Model Law is based on a technologically neutral approach that is not intended to favour any given product on the market.  It also provides appropriate recognition of the principle of party autonomy, under which parties to commercial transactions may agree as to the authentication techniques to be used in the context of their commercial relationships.

As to future work on electronic commerce, the Commission agreed to work, as a priority, towards the preparation of an international instrument dealing with electronic contracting.

On insolvency law, the Commission decided to pursue a legislative guide that would contribute toward a strong insolvency, debtor-creditor regime, including consideration of out-of-court restructuring.

Concerning settlement of commercial disputes, a working group of the Commission has been focusing on the requirement of the written form for the arbitration agreement, on the issues of interim measures of protection and on the preparation of a model law on conciliation.  The Commission hopes to be able to review and adopt the draft model law on conciliation at its next session in 2002.

The Commission also decided to establish a working group at its next session on transport law to address problems that arose in the international carriage of goods, in particular the carriage of goods by sea.  Also, the Commission is organizing a colloquium on security interests given the close link between security interests and insolvency law.  In addition, another working group was given the task of drafting core legislative provisions in the field of privately financed infrastructure projects.

In the report, the Commission appeals to States Parties to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) to respond to the UNCITRAL questionnaire sent out with the aim of monitoring implementation.  So far only 59 countries out of a total of 125 States Parties had responded.

Concerning the collection and dissemination of case law on UNCITRAL texts, the Commission, noted that so far 34 related issues had been published, dealing with 393 cases.  The Commission expressed its appreciation to the national correspondents for their work in the collection of relevant decisions and arbitral awards and their preparation of case abstracts.  The Commission also expressed its appreciation to the Secretariat for compiling, editing, issuing and distributing the abstracts.  The Secretariat was also asked to draft a digest on the entire Convention on Contracts for the International Sale of Goods.

On the matter of training and technical assistance, strong concern was expressed that the Commission could not fully implement its mandate because of limited resources.  Without effective cooperation and coordination between the Secretariat and development assistance agencies providing or financing technical assistance, international assistance might lead to the adoption of national laws that did not represent internationally agreed standards, including UNCITRAL conventions and model laws.  The Commission recommended that the Assembly consider requesting the Secretary-General to increase substantially both the human and the financial resources available to its secretariat.

Opening the session, the Chairman of the Committee PIERRE LELONG (Haiti), said he would make every effort to contribute to the success of the work of the Committee, and hoped he could count on the cooperation of Committee members towards that end.

Organizational matters

MR.LELONG said that in view of the Committee’s heavy workload, its work must be organized in a very efficient manner, and Committee members’ cooperation would be required for the Committee to accomplish its work for the session.

The Sixth Committee would have an average of 9 plenary meetings per week.  He emphasized that the Committee’s work programme proposed in Secretariat document A/C.6/56/L.1 (sections II and III) was subject to review and would be applied with flexibility.

It was proposed, he said, that the Report of the United Nations Commission on International Trade Law on the work of its Thirty-fourth session (agenda item 161) be considered today and tomorrow, 9 October.

The next item was the scope of the legal protection under the Convention on the safety of United Nations and Associated Personnel would be taken up on 9 and 10 October.  The Agenda item 165 on the Report of the Special Committee on the Charter of the United Nations and on the Strengthening of the Role of the Organization would be discussed on 10 to 12 October.

On the agenda item 166 relating to Measures to eliminate international terrorism, he said a working group of the Sixth Committee on the item was to meet between 15 and 26 October to continue the work of the Ad Hoc Committee of the Assembly established by resolution A/51/210.  The working group would continue work on the elaboration of a draft comprehensive convention on international terrorism, with appropriate time allocated to consideration of outstanding issues relating to the elaboration of a draft international convention for the suppression of acts of nuclear terrorism.

The working group would also keep on its agenda the question of convening a high-level conference under United Nations auspices to formulate a joint organized response of the international community to terrorism in all its forms and manifestations. 

The Committee Chairman observed that the subject of terrorism received “solemn and poignant attention” in the General Assembly last week.  At the conclusion of the Assembly’s debate on the topic, its President requested the Sixth Committee to expedite its work on the item and to submit its report to the General Assembly as early as possible, preferably by 15 November.  The original dates proposed for the Sixth Committee to consider the item were 20 and 21 November.  The Chairman said he therefore intended to consult with the Committee’s Bureau on the way the item could be taken up expeditiously.

Concerning the item on Report of the International Law Commission (agenda item 162), he said the commencement date of 29 October for its consideration had been set by the General Assembly in its resolution 55/152.  With the customary two weeks allocated for the item, it was expected that the debate on the Commission’s report would be concluded on 9 November.  It was suggested that the first topic for debate would be the draft articles on Responsibility for Internationally Wrongful Acts.  The next topic would be the draft articles on Prevention of transboundary damage from hazardous activities.  The other topics and items would follow in the order in which they appeared in the Commission’s report.

The Chairman reminded the Committee that meetings of Legal Advisers would be convened in the afternoons of 29 and 30 October.

Continuing, he said the Establishment of the International Criminal Court (agenda item 164) would be considered on 12 and 13 November, and the debate on the Convention on jurisdictional immunities of States and their property (agenda item 160) would begin on the latter date, concluding on 14 November.

He said the Committee might wish to deal with all questions relating to requests for observer status in the General Assembly:  from the International Institute for Democracy and Electoral Assistance (agenda item 168); International Institute for Development (agenda item 170); International Hydrographic Organization (agenda item 172); Sahelo-Saharan States (agenda item 173); and Partners in Population and Development (agenda item 176).     

On 15 and 16 November, he said the Committee would focus its attention on issues relating to the International Convention against the reproductive cloning of human beings (agenda item 174).  It would consider the United Nations Programme of Assistance in the Teaching, Study, Dissemination and wider Appreciation of International Law (agenda item 159) and the Report of the Committee on Relations with the Host Country (agenda item 163) on 19 November.

The Sixth Committee was expected to conclude its work for the session on 23 November.  The Chairman again reiterated that the work programme would be applied flexibly.

Statement by Chairman of UNCITRAL

ALEJANDRO OGARRIO (Mexico), Chairman of the United Nations Commission on International Trade Law (UNCITRAL), said it was well known that UNCITRAL, from its inception, had distinguished itself for intense and productive work.  At the past session, the Commission again had a busy agenda.  The Commission had completed the draft convention on the assignment of receivables in international trade which had the potential of increasing the availability of credit at more affordable rates. He recommended that the General Assembly finalize the draft early in its session as there were numerous indications from the business community and Governments that they were eagerly awaiting its finalization.

Turning to the Model Law on electronic signatures, he said the increased use of electronic authentication techniques as substitutes for hand-written signatures and other traditional authentication procedures had suggested the need for a specific legal framework to reduce uncertainty as to the legal effect of such modern techniques.  The risk that various countries might take diverging legislative approaches with respect to electronic signatures called for uniform legislative provisions to establish basic rules of what is inherently an international phenomenon, where legal harmony as well as technical inter-operability was a desirable objective.  The new Model Law offered practical standards against which the technical reliability of electronic could be measured. It also provided a linkage between such technical reliability and the legal effectiveness that might be expected from a given electronic signature.

The Commission was also developing a comprehensive statement of key objectives and core features for a strong insolvency, debtor-creditor regime, including consideration of out-of-court restructuring, and a legislative guide containing flexible approaches to the implementation of such objectives and features, including a discussion of the alternative approaches possible and the perceived benefits and detriments of such approaches.

Also, the Commission was proceeding with its draft legislative provisions on conciliation, with a view to its review and adoption at the thirty-fifth session in 2002.  International trade benefited greatly from using conciliation to settle commercial disputes, he said.

The continuous expansion of electronic commerce called for constant harmonization efforts, and so a working group of the Commission was preparing an international instrument dealing with certain issues in electronic contracting as well as undertaking studies on related topics.  Another working group was considering issues in the area of transport law.  Yet another group was given the task of developing an efficient legal regime for security rights in goods involved in a commercial activity.  Mindful of the significant demand for model legislation providing for more specific guidance, especially in developing countries and in countries with economies in transition, he said the Commission decided that a working group should draft a set of core model provisions with some of the substantive issues identified and dealt with in the legislative guide on privately financed infrastructure projects.

As to the recommendation for an increase in the membership of UNCITRAL, he said the enlargement would foster participation of those States which, unless they were members, could not justify the human and other resources necessary for the preparation and attendance of the meetings of the Commission and its working groups.

The Commission had adopted new working methods to adapt to the unprecedented increase in its workload.  However, they needed to be met by a commensurate upgrade in the secretariat services available to the Commission.

He said the tragic events of last month had prompted the Organization as a whole, and the Sixth Committee in particular, to increase efforts to develop concrete and effective measures to combat terrorism in all its forms.  He noted the relationship between trade facilitation, the rule of law and international peace.  While the trade law instruments prepared by UNCITRAL did not attract as much public attention as other instruments, they did indeed play an important role in the quest for international peace and security.      

Statements

CRISTIAN MAQUIEIRA (Chile), speaking for the Rio Group of Central American and Latin American countries, expressed appreciation for the draft convention on assignment of receivables, which he described as a balanced text that would help increase the supply of capital and credit at less burdensome rates of interest, and would help States update and harmonize their related legislation.  Likewise, the adoption of the Model Law was a decisive step towards guaranteeing juridical security for the automated processing of data in international trade.

He said the Rio Group shared the Commission’s view that a broad approach must be adopted in dealing with issues related to electronic transactions, and care taken to avoid any interference in the regime established by the Convention on Contracts for the International Sale of Goods.  He also supported the Commission's decision to continue work on a legislative guide on insolvency that would be flexible and capable of harmonizing existing laws, while at the same time promoting commercial exchanges.  He also stressed the Rio Group’s strong interest in the Commission’s work on issues related to the requirement of the written form for the arbitration agreement, questions related to precautionary measures, and preparatory work on a model law on conciliation.

Any increase in membership of the Commission should guarantee that the Commission continues to be representative of all juridical and economic regimes and systems while still maintaining the Commission’s effectiveness.  In the opinion of the Rio Group, those criteria would be achieved if enlargement was limited to 60 members, with the percentages of participation of the different regional groups ideally reflecting a structure resembling the one that exists in Economic and Social Council (ECOSOC).

Also for effective participation by all members, the initiative should be accompanied by attention to the need to grant travel assistance to representatives of certain countries, and to strengthen the training and technical assistance programmes, particularly in the developing countries.  He pointed out that the proliferation of working groups had led to limited participation by developing countries.  The Commission should try to reschedule its calendar of meetings in such a way as to reconcile the need for progress to be made on different topics with the difficulties of participation by members from the developing countries.

NARINDER SINGH (India) said the Model Law on electronic signatures was particularly significant given the increasing reliance on electronic means of communication, and storage and transmission of data and information.  It was a useful supplement to the Model Law on Electronic Commerce adopted in 1996.  India had recently adopted an Information Technology Act based on that Model Law.  He noted that in identifying areas to be taken up for consideration in the fields of transport law, insolvency law, security interests and privately financed infrastructure projects, the Commission had taken into account work being done by other concerned organizations.

He said he fully supported the enlargement of the Commission and said the allocation of the additional membership must be based on the principle of equitable geographical representation.  India considered as important the Commission’s work in training and assistance, the promotion of practical uniform legal texts and the technical assistance provided to Governments.  He further supported the collection and dissemination of case law on UNCITRAL texts as a valuable tool for promoting international trade law research and their uniform interpretation and application.

Considering the importance of international trade law unification for economic development, he said, the Commission’s secretariat should be provided with the necessary financial and personnel resources, particularly in light of the fact that its mandate and workload had increased.

ELIN MILLER (Sweden), speaking for the Nordic countries, said that in the context of the rapid globalization of the economic environment, the role of UNCITRAL in drafting and developing international trade law as well as publicizing the existence of such rules, could not be over-emphasized.  She cited the draft convention on assignment of receivables financing and the finalization of the model law on electronic signatures as considerable successes for UNCITRAL.

An expanded membership could stimulate interest in the work of the Commission and also help ensure that elaborated texts would be acceptable to all states.  Although she questioned the advisability of doubling the membership from 36 to 72, she said that since there did not appear to be financial implications nor negative implications regarding the effectiveness of the work of the Commission, the Nordic countries could support the proposal.  She noted that the issue of financing the participation of members from developing countries remained to be resolved.  Also, given that the Commission must now be prepared to handle as many as six projects at the same time, she highlighted the importance of providing the secretariat with adequate resources.

JEAN LUC FLORENT (France) said the Commission had demonstrated its efficiency with the completion of work on the draft Convention on the assignment of receivables in international trade.  France had concerns about some of its provisions but it would not stand in the way of the Convention’s expected adoption by the General Assembly.  He noted the Commission’s work on a model law on Electronic Signatures and hoped that it would be successful in that endeavour.

He said the Commission faced the challenge of adhering to the system of official and working languages of the United Nations in the preparation of its texts.  Translation delays, especially those in French, were setting back the Commission’s work.  France was concerned about that, he said, and added that it favoured a system whereby translators would participate in the review of texts.

France also favoured increase in the Commission’s membership with regional groups properly represented.  France saw advantages in clear priorities being set for the selection of topics by the Commission.  He also said the Commission required more resources for its work.

SU WEI (China) noted the progress UNCITRAL continued to make in its work, with notable breakthroughs in many topics.  There was universal recognition that the Commission was playing an increasingly important role in the coordination and harmonization of international trade law, thus giving strong impetus to the development of international trade.  China hoped the Commission would carry out its work persistently, step up studies and score new achievements.  It would continue to support the Commission’s work.

Commenting on the Commission’s work plan, he said it should be rationally arranged.  The Commission must strengthen technical assistance and training of personnel from developing countries.

He said the conventions and model laws adopted under the Commission’s auspices had played an important role in international trade, and more countries should endorse and accept them.  The Commission should make more efforts to assimilate more views in elaborating its texts.

ANDRAS VAMOS-GOLDMAN (Canada) said the Assembly should adopt a resolution opening the draft convention on the assignment of receivables for signature without changes, and should invite States to become a party to it.  He said the draft provided a set of rules that were fair and reasonable and would enhance legal certainty in the field and should contribute to the availability of lower cost credit in international commerce.  Canada also strongly supported the adoption of the Model Law on Electronic Signatures.

He said the significant increase in the number of projects at the Commission could well impose greater demands on the resources of the Secretariat, therefore, he supported the efforts to ensure that the Secretariat was adequately resourced to respond to the programme set by the Member States.  The recommendation to increase the membership of the Commission was the most important point to come out of the past session.  Canada strongly supported the enlargement of the number of seats to 72.  States which could not currently justify the expense of participation, when they were not Members, could make a valuable contribution to the Commission’s work by ensuring a broad range of perspectives which could lead to the easier adoption of UNCITRAL texts.

An increase in seats would also substantially assist the Commission in carrying out its substantive work in international commercial law.  It would give the Commission greater visibility in the United Nations system and greater profile to its products.  Such an increase would also address the gap between the current size of the Commission and other United Nations and non-United Nations bodies, in related fields.  It would facilitate their coordination.  He cited the increased number of United Nations Member States since the last increase in the Commission in 1973.  Enlargement of the Commission membership would also reflect the increased importance of international trade law in the 21^st century.  He observed that an increase would not involve significant cost consequences.  He urged that an election for the new seats be held as soon as possible.

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