UNCITRAL seminar will strengthen cross-border commercial law - Chief Justice

The UNCITRAL South Asia seminar on electronic commerce law and electronic communications will lay the seeds of great ideas for cross-border commercial law, Chief Justice Mohan Pieris told the First South Asian UNCITRAL seminar in Colombo recently.

"I have no doubt that the seminar will lay the seeds for great ideas to sprout in cross-border Commercial Law and will become legal transplants one day in several jurisdictions in addition to accomplishing the goals we have set ourselves," he said.

Extracts from the speech.

"It gladdens my heart the United Nations Commission on International Trade Law Regional Centre for Asia and the Pacific brings home the gospel of yeoman services that UNCITRAL has rendered for the benefit of transnational commercial Law and it is doubly significant because it is the first-ever event to be hosted in Sri Lanka in more than 20 years.

My mind goes back to the days of my commercial law practice when I profusely used Schimitthoff's tome on International trade titled 'Export Trade: The Law and Practice of International Trade'.

Trade law

I recall its seminal author Professor Schimitthoff whom I would call the primogenitor of UNCITRAL. The first step towards the setting up of UNCITRAL is commonly considered to have been Professor Schimitthoff's address at the 1962 Colloquium, convened in London by the International Association of Legal Science, on the theme, 'Sources of Law in International Trade'.

In his intervention, Professor Schimitthoff lamented the lack of co-ordination among the formulating agencies dealing with the unification and harmonisation of International Trade Law.

Harmonisation

In a subsequent report submitted to the UN General Assembly in 1966, Schimitthoff urged the creation of a commission for international trade law, which would act as a sort of 'clearing house' by exercising some supervision over the activities of the formulating agencies and promoting contacts and furthering collaboration between them.

The genesis for harmonisation usually emerges in a paper discussed at a conference or in an article published in a journal, which draws the academic community's attention. That is how Schimitthoff provoked the provenance of UNCITRAL.

The United Nations set up UNCITRAL in 1968 as a specialised agency for the harmonisation of private commercial law and in keeping with the spirit and intent of its creation, the UNCITRAL has been responsible for a variety of UN Conventions, the 1980 Convention on Contracts for the

International Sale of Goods (CISG), the 1995 Convention on Standby-Letter of Credit and the 2005 Convention on the Use of Electronic Communications in International Contract.

Sri Lanka's Electronic Transactions Act No 19 of 2006 was influenced by this important Convention and the sanguine hope is that the seminar will prepare the ground for Sri Lanka's ratification of this all important convention.

In fact the lament is that although Sri Lanka was involved in the drafting of this Convention and signed it in July 2006, we are yet to ratify it. While I wish you speed up this process, I would not indulge in an appraisal of these individual conventions and model laws lest I usurp your role, but let me make some observations on these issues.

There are also numerous UNCITRAL Model Laws which UNCITRAL has copiously produced, for example, 1995 Model Law on International Commercial Arbitration on which we modeled our Arbitration Act No 11 of 1995, the 1996 Model Law on Electronic Commerce and the 2001 Model Law on Electronic

Signatures

UNCITRAL has also brought forth various Legislative Guides. Surveying the range and extent of multifaceted topics that the participants of this seminar will discuss over the next two days, I have no doubt that over the next two days we will be laying the seeds for great ideas to sprout in cross-border commercial Law and will become legal transplants one day in several jurisdictions in addition to accomplishing the goals we have set ourselves.

Legal convergence

The plethora of harmonising conventions and model laws through which UNCITRAL has developed private commercial law, demonstrates that UNCITRAL played its role with bold doctrinal strokes, masterful forms of harmonisation and a slew of innovative legal guides in transnational commercial law.

It did not lie prostrate and slothful. I have looked upon UNCITRAL as a major promulgator of legal convergence and uniformity and UNCITRAL's definition of uniformity is worthy of remembrance.

Uniformity removes barriers in international trade.

The end result of all this is that unification of laws in the end would accomplish coordination of national private laws.

It has to be borne in mind that international conventions only have the force of law in Sri Lanka if incorporated into our national law by legislation.

Even a Model Law for that matter has no legal force as such. It merely provides a model which the state can adopt in whole or in part, with or without amendment. This is what we did when we enacted our Arbitration Act No 11 of 1995.

Be that as it may, Let me make the observation that the mere adoption of a convention does not achieve harmonisation. Let us take CISG (the 1980 Convention on Contracts for the International Sale of Goods).

Neither the United Kingdom nor Sri Lanka has ratified this convention, though India has ratified it. Despite the many years expended in creating these conventions, sovereign states have shown scant enthusiasm in many instances, prompting one to ask what ails the convention as a harmonisation vehicle?

One apparent fact is that in some non-commercial law areas, conventions have been readily ratified.

This may be contrasted with the fact that the New York Convention has achieved great success.

The conclusion from these two statements may be that the subject matter of the convention is the most important factor that weighs in with States.

In areas that states perceive to be important and desirous of harmonisation, a crowded legislative calendar has not deterred them from ratification.

Attitude

On the contrary, in arcane and highly specialised areas, legislature develops a tendency to disregard them.

Another attitude against ratification is reflected in the words of Lord Justice Hobhouse who wrote in (1990) 106 Law Quarterly Review 530 at p 533, with specific reference to CISG - I quote - "These conventions are inevitably and confessedly drafted as multicultural compromises between different schemes of law.

"Consequently they will normally have less merit than most of the individual legal systems from which they have been derived. They lack of coherence and consistency. They create problems about their scope.

"They introduce uncertainty where no uncertainty existed before.

They probably deprive the law of those very features which enable it to be an effective tool for the use of international commerce."

I certainly do not assent to these words, and for a point by point rebuttal of these comments, and other criticisms I would refer you to Lord Steyn's illuminating piece - 'A kind of Esperanto?' in Chapter I of P. B. H. Birks's edited book - 'The Frontiers of Liability'.

Gains

We stand to gain a great deal from unification and harmonisation and in fact some of the ambitious programs that I have set in motion are all facilitated by harmonised model laws and rules which stand as sentinels.

We have set in motion e-filing. Our secured credit transactions law and the legal reforms that we have contemplated derive inspiration from the Electronic Transactions Act we incorporated.

I exhort you to debate these issues and their pros and cons and reach your conclusions for the benefit of the region and the country which proudly hosts this seminar in association with ICTA and the Central Bank."

International trade

ICTA Chairman Professor P. W. Epasinghe said, "UNCITRAL is the core legal body of the United Nations system in the field of international trade law.

"It is a legal body with universal membership specialising in commercial law reform worldwide and has been functioning for over 40 years.

UNCITRAL's business is the modernisation and harmonisation of rules on international business.

"Trade means faster growth, higher living standards and new opportunities through commerce. To increase opportunities worldwide, UNCITRAL is formulating modern, fair and harmonised rules on commercial transactions," he said.

"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, and technical assistance in law reform projects" Epasinghe said.