9 July 2001


VIENNA, 9 July (UN Information Service) – The following speech was delivered today on behalf of the Under-Secretary-General for Legal Affairs, the Legal Counsel, Hans Corell, by Jernej Sekolec, Secretary to the United Nations Commission on International Trade Law (UNCITRAL), at the thirty-forth session of UNCITRAL, convening in Vienna from 25 June to 13 July.

"Distinguished delegates and observers,

It is with great pleasure that I address you on the occasion of the thirty-fourth session of UNCITRAL.

As head of the Office of Legal Affairs and Legal Counsel of the United Nations it is an honour for me to support your activities through the International Trade Law Branch. Together with my colleagues in the Branch I take pride in contributing to the success of your work.

Languages are constantly evolving tools of human communication. As our habits and ways of life change, so change the words we use to describe the world we live in.

Very few new words have gone the long way from colloquial language into the established vocabulary as quickly as the word "globalization" or its French equivalent "mondialisation".

Traders in North America may still be in their offices when a new business day starts in Asia. Securities markets in Latin America are open before the markets close in Africa, Europe and the Middle East. And we are all in constant touch with each other by telephone, e-mail and fax.

The benefits of globalization are obvious: faster growth, higher living standards, and new opportunities. Yet trade, services and investment can only cross national boundaries when law crosses them as well. Traders and investors need to have confidence that their property rights will be respected, that contracts will be fulfilled, and that when disputes arise there is some agreed method of settling them. In such a global economy, it is vital to have clear, simple rules that everyone knows and everyone applies.

UNCITRAL has played and continues to play an essential role to facilitate international trade through the modernization and harmonization of international commercial law. Some UNCITRAL instruments have become landmarks in the areas of law governed by them, such as the United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980), the UNCITRAL Arbitration Rules (1976), the UNCITRAL Model Law on International Commercial Arbitration (1985) and the UNCITRAL Model Law on Electronic Commerce (1996).

Anyone looking back at the work of UNCITRAL since its establishment, in 1966, acknowledges the importance of its contribution to international trade. But not so many people are aware of the connection between the work of UNCITRAL and some of the fundamental aims of the United Nations, such as peace and social development.

Today, ladies and gentlemen, I would like to invite you to look at your work from this broader perspective.

In a joint statement issued on 5 July 1999 by the Secretary-General of the United Nations 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. They reaffirmed at that occasion their belief 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."

Let me begin by the social development aspect.

By harmonizing or unifying the law of international commercial contracts, promoting amicable dispute settlement mechanisms and removing legal barriers to the commercial use of new technologies, you help enhance legal certainty, reduce transaction costs and improve the legal environment for international trade and investment. By adopting internationally agreed standards and solutions acceptable to different legal systems, UNCITRAL increases transparency and predictability in international trade and eases the way for the integration of domestic markets in the globalized economy.

As the Secretary-General wrote in an article published in the International Herald tribune on 26 July 2000,

"… open markets offer the only realistic hope of pulling billions of people in developing countries out of abject poverty, while sustaining prosperity in the industrialized world".

But markets cannot be truly open if the law creates barriers between them. Trade cannot thrive in an environment of legal uncertainty and disparity. Costs will remain high as long as no accessible means for dispute settlement are available. Within the relatively narrow confines of your mandate, you have made a remarkable contribution to overcome these obstacles.

Of course, trade facilitation is not in itself sufficient to ensure that the benefits of globalization are actually shared by all nations. Sadly, poverty still coexists with wealth; famine with abundance; welfare with sickness. International law alone is not the answer for the paradoxes of our time. We all know that much effort in other areas, such as economic cooperation and development assistance, is required to improve the living conditions of men, women and children in cities and villages around the world.

And yet, much could be achieved by the international community if it were to face those challenges with the same spirit of commitment and cooperation that has characterized the work of UNCITRAL in carrying out the mandate given to it by the General Assembly.

Let me now turn to the second, often neglected, aspect of your work, namely, the relationship between trade facilitation, the rule of law and international peace.

Peace, ladies and gentlemen, remains a distant dream, as long as there is no respect for the rule of law, both domestically and in international affairs. Domestic peace is created by fair and impartial application of the law and administration of justice by courts and public authorities. As the Secretary-General put it in a lecture recently delivered at the Oxford University,

"…these things are necessary if conflicts are to give way to lasting peace – or, even better, if they are not to happen in the first place."

Fairness and impartiality are needed in all branches of the law, not only in constitutional, criminal or procedural law. A legal system is one unity, and commercial law is an essential part of it: it sets out the rules for the proper functioning of economic activities. And a healthy economic system, as we nowadays know, is one fundamental component of political and social stability.

The same reasoning applies in the international arena. In order to grow, international trade and foreign investment require clear and predictable rules that are applied by as many countries as possible. Expanding trade and growing foreign investment, in turn, are the foundations of healthy economic relations between States and may go a long way to prevent conflicts or heal the wounds caused by them.

Ladies and Gentlemen,

The United Nations was built upon the fundamental principle of respect for international law. The preamble of the Charter calls on Member States "to establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained". An important aim of the United Nations is, therefore, to bring about the implementation both of treaties and of rules of customary international law.

Since the founding of the Organization in 1945 over 500 multilateral treaties have been deposited with the Secretary-General. Without exception, all of these treaties have been the result of meticulous negotiations and reflect a careful balance of national, regional, economic and other interests. In many instances, these international agreements were actively promoted by non-governmental organizations. The aspirations of nations and of individuals for a better world governed by clear and predictable rules agreed upon at the international level are reflected in these instruments. They constitute a comprehensive international legal framework covering the whole spectrum of human activity, including human rights, humanitarian affairs, international criminal matters, the environment, disarmament, narcotics, outer space, trade, commodities and transportation.

The trade law instruments that have been prepared by UNCITRAL are an integral part of the body of international law developed by the United Nations. They may not attract as much public attention as other instruments, but they do indeed play an important role in our quest for international peace and security.

However, we should not deceive ourselves with the amount of rules we are capable of producing. A law that is not applied is more than a frustrated expectation: it is a wasted effort. We in the Secretariat are very well aware of the time and cost entailed by multilateral negotiations.

Earlier this year, the UNCITRAL secretariat circulated to the Permanent Missions the first of a series of short information notes on UNCITRAL instruments. The purpose of these notes is to assist your Governments evaluate the desirability of adhering to or implementing the various instruments prepared or promoted by the Commission. The first note dealt with the United Nations Sales Convention and the Convention on the Limitation Period in the International Sale of Goods. Other notes will follow in due course.

As the Legal Counsel of the United Nations, I invite you to give this matter the attention it deserves. I appeal to all representatives and observers participating in the meetings of the Commission and its working groups to contribute, to the extent you deem appropriate, to facilitate consideration of UNCITRAL instruments by legislative organs in your countries.

I also appeal to those States that have already adhered to UNCITRAL conventions and model laws to consider joining our efforts to promote their acceptance and implementation by other States with which they maintain close business and trade relations. By doing so, States will enhance the benefits of legal certainty and predictability that trading parties already derive from their country’s participation in those instruments.

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.

As we know, the preparation of legal texts is complemented by the training, information and technical assistance programme carried out by the Secretariat. This programme benefits, in particular, developing countries and countries whose economic systems are in transition. My colleagues in the UNCITRAL secretariat have met the increasing demand for seminars and technical assistance with motivation and professionalism. I just wish that we had the resources required to fully meet the needs of Member States.

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 main items on your agenda for this session.

First, the draft Convention on Assignment of Receivables in International Trade, which your Working Group on International Contract Practices prepared in the course of the last five years, is a commendable effort to facilitate credit on the basis of receivables. Once it enters into force, it will be a significant contribution to the development of capital markets in many countries.

The second main issue on your agenda has been the Model Law on Electronic Signatures. Five years ago, UNCITRAL adopted the Model Law on Electronic Commerce. This instrument has put the Commission at the forefront of developments in the legal field of electronic commerce. The Working Group on Electronic Commerce continued that important position as the primary forum for private law issues in electronic commerce by preparing the draft Model Law you are about to finalize. We expect that this text will be a very useful tool for legislator to modernize their laws to facilitate the use of electronic signatures in international trade.

Ladies and gentlemen, as has been the case for many years, you are involved in a busy session. And I may add, based on experience, that it will certainly be a fruitful one. With these remarks, I wish you the best of success in your deliberations."

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