UNCITRAL: Celebrating 50 years of Rule Based Commerce

INTRODUCTION

Commerce is driving force of the globalisation today and to make it more rules based, legal body with universal membership was need of an hour. Accordingly, recognising the need for a global platform, United Nation General Assembly in the year 1966 passed a resolution 2205 on December 17, which constituted United Nations Commission on International Trade Laws popularly known as UNCITRAL. The body is working in its area with a mandate of progressive harmonisation and modernization of commercial laws by the adoption of both legislative and non-legislative means. These includes the following areas within its ambit at present-

  • Dispute Resolution
  • International Contract Practices
  • Transport
  • Insolvency
  • Electronic Commerce
  • International Payment
  • Secure Transactions
  • Procurement
  • Sale of Goods

In order to increase these opportunities worldwide, UNCITRAL is formulating modern, fair, and harmonised rules on commercial transactions. These include:

  • Conventions, model laws and rules which are acceptable worldwide
  • Legal and legislative guides and recommendations of great practical value
  • Updated information on case law and enactments of uniform commercial law
  • Technical assistance in law reform projects
  • Regional and national seminars on uniform commercial law

In the course of the journey, UNCITRAL has emerged as the core legal body of the United Nations systems in the field of international trade law. Of recently in November 2016, the body is celebrating its 50 years. The article captures the deliberation at its 50 years.

THE MANDATE OF THE BODY

The UNCITRAL has been given the mandate to execute the wider acceptance of existing conventions and model laws with uniformity of laws for implementation of rule-based commerce. UNCITRAL works for greater participation of the member nations and for the wider acceptance of the existing system, which includes uniform interpretation of application the model laws.

The Model Law on Arbitration which was adopted on June 21, 1985, is designed to assist States in reforming and modernising their laws on the arbitral procedure so as to take into account the particular features and needs of international commercial arbitration. It covers all stages of the arbitral process from the arbitration agreement, the composition and jurisdiction of the arbitral tribunal and the extent of court intervention through to the recognition and enforcement of the arbitral award. It reflects worldwide consensus on key aspects of international arbitration practice having been accepted by States of all regions and the different legal or economic systems of the world.

UNCITRAL working model to execute the existing model includes- Commission, Intergovernmental Cooperation, Secretariat. The UNCITRAL holds annual plenary sessions for its working of the Commission either at New York or at Vienna. The model law is a legislative text recommended for enactment into national laws. UNCITRAL model laws on International Commercial Arbitration was launched in the year 1985 while the UNCITRAL Model Law on Electronic Commerce was launched in the year 1996. Model Law on Goods Construction and Services (1994) was launched in 2011 as model law on Public Procurement.

The debates on laws take place on the floor of UNCITRAL with a consensus of all member countries or near consensus give these laws greater legitimacy to these laws.

CELEBRATING 50 YEARS IN NEW DELHI

© ILW

In 2016, the journey of UNCITRAL completed its 50 years and the glorious history was marked by celebrations in Delhi, only place outside Vienna, the seat of UNCITRAL, to witness it. The momentous celebrations were spread as a two days event held at Vigyan Bhawan and the entrancing Hotel Leela Palace, New Delhi on November 28-29, 2016. The then Chief Justice of India, Justice T.S. Thakur expressed his happiness of India’s participation in UNCITRAL, right from the formative ages, since 1968.

The day witnessed the august gathering of distinguished participants from all across the globe including important legal luminaries from India. Mr Salim Moollan QC, Chair of the 44th Session of the UNCITRAL, delivered the welcome address at the inaugural session touching upon the issue of microfinance at the stage of UNCITRAL. Mr Moollan highlighted in his speech how important is the tool of microfinance which is facing challenges and how it can be a regulated without destroying the flexibility that lies at its call. To resolve the issue he highlighted, UNCITRAL came as a common answer. UNCITRAL undoubtedly has emerged as the forum to address the concerns of the commercial disputes in a coordinated manner.

The President of India, Shri Pranab Mukherjee who was the Chief Guest gave the keynote address highlighting India’s role and pro-activeness in such multilateral institutions right from its inception. The key highlights of his speech included:

  • “It is a glowing testament to India’s commitment to the rule of law that India is only one of eight countries that have been a member of UNCITRAL from its inception, and has recently been re-elected for a term of six years. India recognises that the impact of UNCITRAL has been far beyond mere facilitation of international trade. Its exemplary work over the years has provided significant thought leadership that has inspired the transformation of several domestic legal regimes to facilitate both domestic and transnational commerce and trade.”
  • “During my tenure as Commerce Minister, I led several rounds of negotiations that led to the establishment of the World Trade Organisation in 1995. The diversity of economic interests, languages, legal systems and cultures in organisations such as WTO and UNCITRAL is indeed staggering- it is, therefore, a great achievement by UNCITRAL to have created conventions and model laws which are acceptable worldwide. In addition, UNCITRAL has created practical legal and legislative guides and provided technical assistance for law reform, apart from maintaining an updated database of uniform commercial law and judicial decisions.”
  • UNCITRAL’s conventions and its model legal texts have formed the basis of new enactments in India and amendments to a wide array of our commercial legislation ranging from the Arbitration and Conciliation Act 1996, the Information Technology Act, 2000 and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to name but a few.”

The then Chief Justice of India, Justice T.S. Thakur continued the momentum of celebration in his own style of eloquence by sharing the joy of golden jubilee celebration as a commemorative moment for any institution and highlighted how it was more so special when the same is a subsidiary body of United Nation General Assembly.

Senior Advocate, Fali S. Nariman, Chairman UNCC India needs special mention for the vote of thanks conveyed who in his own way touched the heart of every audience with the joy of celebration of the delegates with humour and thoughts vital to be addressed for the day. Judge Kurian Joesph, Supreme Court of India was amongst other important dignitaries of the august gathering. A stellar list of speakers descended down to not only highlight the importance of the day but also to the deliberate way ahead in fostering the trade between the countries via rule based commerce.

The reflection of the day revolved around sharing of views towards attainment for rule-based commerce including full multilateral forethoughts as sin qua non-for achieving global standards. India’s role was emphasised as pivotal in the world centre stage as India’s economic growth in the last two decades has attracted immense investor interest. India’s FDI inflows stood at US$ 44 billion in 2015 making it the 10th largest receipt of such inflows according to the World Investment Report 2016 issued by UNCTAD. The President of India rightly underlined that it is a blooming demonstration to India’s commitment to the rule of law for being only one of the eight countries that have been a member of UNCITRAL from its inception and has recently been re-elected for a term of six years.

Another important focus of the confab was stress on harmonisation of International trade laws taken up especially by H.E. Sheikha Haya Rasheed, Former President, 61st Session of UN General Assembly. She deliberated on New York Convention on Recognition and Enforcement of the arbitral award was adopted in 1958 as the first significance of International legislation. Further, highlighted that Model Law constituted one-quarter of the global adoption is another successful effort of the UN. She also mentioned about the adoption of Model laws by the Bahrain and the  Bahrain Chamber of Dispute Resolution. She rightly stressed that globalisation has a symbolic relationship with the adoption of uniform laws. The legal culture of countries should stress upon uniformity and the mere usage of the uniformity will not achieve the goal if the local laws are adopted by the lawyers pertains to the local procedures. It is heartening to note that UNCITRAL is taking the lead in furthering debate and harmonisation in the sphere of investor-state dispute settlement.

UNCITRAL proceeds with a vision to take the world along with it. The UNCITRAL’s objectives stand integrated with the realms of different legal regimes in the world, i.e. civil law and common law amongst others. The harmonious nature of deliberation and consolidation into principle represents one of the surest protections of international peace and security. In the field of international trade and commercial law, it continues to deliver the same with wide recognition and acceptance.

UNCITRAL is the core legal body of United Nations and there is a need to find legitimate legal standards acceptable to all member countries. The conference debated both on the arbitrability of disputes in a well-crafted session chaired by Senior Advocate, Gaurab Banerji, Supreme Court of India. The then Chief Justice of India rightly applauded UNCITRAL Secretariat’s effort for establishing a system for collecting and disseminating information on court decisions and arbitral awards relating to the Conventions and Model Laws-CLOUT (Case Laws on UNCITRAL Laws).

There were discussions that took off on finding solutions of evolving multilateral Investment Courts and on harmonisation issue yet it needs further deliberation for finding a permanent place in model laws. Overall, the celebration was towards adopting a greater rule based commerce by ironing out the differences in laws for better harmonisation.

In day 2 of the Conference: Emerging legal standards in the electronic commerce across the border along with cross-border insolvency along with reform and legitimacy in investment arbitration was discussed. One of the speakers highlighted that the establishment of the Model Law in electronic commerce acceptable to different legal, social and economic system can help in the harmonisation of economic laws. These laws are applicable to any kind of data message for electronic commercial activity. UNESCAP initiative is going on for paperless discussion. The rule and implementation process are being discussed in the UN Expert Group partnered by UNCITRAL. The recognition of electronically signed document can give a great push to the electronic commerce.  By illustration it was highlighted how demurrage charges are paid by the importer at a port as the documents say from a country like Nepal may take a time to reach the port town through courier. In such a scenario, the electronic commerce can be a great rescue.

Just for information of our readers as the reference to it was made in speech, the United Nations Network of Experts for Paperless Trade and Transport in Asia and the Pacific (UNNExT) is a community of knowledge and practice for experts from developing countries and transition economies from Asia and the Pacific involved in the implementation of electronic trade systems and trade facilitation. It was established by the UN ESCAP and UNECE in 2009. This body is working on the establishment of the paperless trade.

The concluding session was graced by presence of Sujata Mehta (Secretary, Ministry of External Affairs); Timothy Leay (Principal Legal Officer, Secretariat UNCITRAL) and Adwaita Sharma (Secretary, UNCC India).

© Indian Law Watch

CONCLUSION

Undoubtedly, UNCITRAL Model laws are great facilitator of rule based commerce which are not only integrating economies but also connecting them socially with trade as vehicle. There are important issues to address at present like multilateral investment court, cross border insolvency, electronic commerce with passage of time. Commerce is not only prominent driving force but is also an important engine of globalisation, and more it is rule based, the more it brings closer world economies.

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References

  • UNCITRAL Website
  • UNNExt Website

 

Published :
March 13, 2017
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