Anna Joubin-Bret: The Past and Future of New York Convention

Keynote Speech on the 60^th Anniversary of New York Convention and

“One Belt and One Road” Conference

Ms. Anna Joubin-Bret

Secretary of UNCITRAL

Mr Gao Zimin, Ms Elsie Leung, Dr Liu Xiaochun, distinguished guests, ladies and gentlemen: it's a great honour and pleasure for me to be here for the celebration of the 35^th anniversary of the SCIA and the 60^th anniversary of the New York Convention. 

You have heard a lot in the opening presentations about the New York Convention, and I'm about to give you some more background about this instrument that is not only the flagship instrument of UNCITRAL and the United Nations' economic system, but also, I believe, one of the cornerstones of international trade, investment, and globalization.

So let me introduce to you the New York Convention for its 60th anniversary, and I will start by giving you some historical background. We will have a panel discussion later discussing more in-depth history of the New York Convention, and we will also give you an introduction of UNCITRAL, so you have a better understanding of how our secretariat operates and how the Commission that we serve operates. And then I will give you a presentation of the New York Convention as a cornerstone for future developments.

So if you bear with me, I will start by quoting from the United Nations Charter chapter VI. It is embedded in the Charter that: "The parties to any dispute, the continuance of which is likely to endanger the maintenance of international peace and security, shall, first of all, seek a solution by negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice." This is precisely what we are working on together. The starting point, as I mentioned, is the New York Convention. 

It was signed on 10 June 1958, but it was an ongoing effort before the New York Convention was negotiated, and it came from an idea expressed by the International Chamber of Commerce. I should pay a tribute to our colleagues and friends at the ICC who were at the origin in identifying the need and helping us in formalizing an appropriate response. The recognition and enforcement of foreign awards was an issue in 1958. It had already been recognized by the Geneva Convention on the Execution of Foreign Arbitral Awards in 1927 but it was not meeting the needs, particularly because it required a “double-exequatur”. The UN Economic and Social Committee, in charge of cooperation between States and social matters reported to the General Assembly in March 1955 about the need for such a convention.

The New York Convention was formally signed in 1958, so a few pictures here to show you those who worked on the New York Convention, and those who formally signed it. It was finally signed in June of 1958, and it was then signed by a number of States. For example, here we have the representative of France and the ambassador of the USSR, in December of 1958. 

Now let me talk very briefly about UNCITRAL, The United Nations Commission on International Trade Law. It was established by the United Nations General Assembly Resolution in December 1966. As Prof Zhang mentioned, we indeed were established after the New York Convention, but we were established to care for the New York Convention. We were given a mandate to further the progress of modernization of international trade and to prepare and promote the use and adoption of legislative and non-legislative instrument in a number of key areas of commercial law. The decision was taken by the General Assembly to establish the United Nations Commission on International Trade Law, which has for its object the promotion of the progressive harmonization and unification of the international trade law in accordance with the statute.

UNCITRAL's membership is elected among the State members of the United Nations for terms of six years. The term of half the members expire every three years. In the middle of 2019 half of the Commission will be renewed. It is an election process where various countries that are candidates are presented by regional groups in the United Nations, representing different legal traditions and levels of economic development. As you mentioned, Professor, it is indeed developing and developed countries that are members of UNCITRAL. We have currently 60 members: 14 African states, 14 Asian states, 8 Eastern European, 10 from Latin America, and other states.

The UNCITRAL Commission did not have 60 members from its inception. It started with 29 members, expanded in 1973 to 36 states, and in 2002, to 60 states. What is important is it reflected the broader participation and contribution by states from different regions, but it also stimulated interest in UNCITRAL's expanding work program. What is important is that we achieved inclusiveness and we continuously strive to ensure it. The more States participate in our deliberations, the better for the outcome and of course the better for further implementation.

The UNCITRAL working methods follow a calendar decided by our Commission. We have two annual sessions of working groups, and we have a varying number of working groups depending on the topics that we are instructed to work on. These working groups meet in the spring sessions in New York, in the fall sessions in Vienna. The Commission, which then approves and assigns the work to the working groups, meets alternatively in New York or in Vienna in June of every year. During this annual session, the member states but also all observer states, all the member states of the United Nations, even if they are not members of the Commission, participate in these meetings, and so do observers representing stakeholders. During the working group sessions, the texts, the conventions, the instruments are worked out, are prepared, and they come for approval and adoption by the Commission, and will then, depending on the status of the instrument will become either an international convention open for signature and then ratification, or will be adopted by incorporation, as is the case, for model laws. The role of the secretariat is to assist the Commission and the working groups in their work and in discharging the mandate that is given by the Commission to the different working groups.

The fundamental basis of work for UNCITRAL is consensus, and this is, of course, a longstanding practice in the Commission, to reach decision by consensus, and it has, with very few exceptions, always been the case. In 2010, the Commission formalized this practice and enacted that decisions should be reached by consensus as far as possible, and in the absence of consensus, decisions are taken by voting under the rules of procedure of the United Nations General Assembly. I will open a short parenthesis here to share with you my very first experience upon taking my position as secretary of UNCITRAL was precisely to carry through the very exceptional procedure of a vote. My very first appearance on the podium was for the launching of the working group on reform of investor-state dispute settlement, and in this new working group, there was disagreement as to the election of a chairperson. And therefore we had to go to an actual vote, and all my colleagues were telling me, "This is baptism by fire, because this has really never happened in the life of UNCITRAL."  And there I come, and the first thing I had to deal with is precisely a vote! But just to tell you that this is an exception, and we will make sure that it remains an exception. 

UNCITRAL working groups are currently six, and we have flexibility to adapt the number of working groups to the actual needs and to the actual areas in which we are working. So we have a first working group that is looking into simplifying, streamlining and fostering a more conducive legal framework for micro, small and  medium-sized enterprises. This working group will come to the Commission this year with a first legislative guide on incorporation and registration of MSMEs, the micro and small and medium-sized enterprises, with the idea that to encourage MSMEs to move from the informal to the formal sector of the economy, you have to make their incorporation and their registration easier. But at the back of our minds is, of course that, if you manage to simplify and streamline procedures for MSMEs, then it will also benefit the broader set of companies and the broader legal framework for incorporation and registration, because if you can do it for a group of companies, you can also do it for the entire enterprises.

Our second working group is the working group on dispute settlement, the one you are most familiar with, and here are some of the instruments that have been prepared by this working group. What I would like, however, is to stop for a minute to highlight and to present to you the international convention for the enforcement of mediated settlements that will come for approval by the Commission in June, and, if it is approved by the Commission, hopefully it will come for its signature and opening for accession in July of 2019. This will take place in Singapore, and we are hoping that the Commission will agree to call this convention the "Singapore Mediation Convention". With this opening for signature of the Singapore Convention, we will close the loop of the mediation framework, and for those of you who are familiar and who practice international mediation, you will realize how important the enforcement of mediated settlements is. In practice, many parties hesitate before entering into a mediation, because they always think, "What happens if we reach an agreement, but the other party doesn't abide by its commitment?” And here we have an instrument that, if you will, is the exact continuation of the New York Convention on recognition and enforcement of arbitral awards and has been such a successful convention, and we hope that the Singapore Convention will have the same fate and will also contribute to enhancing and strengthening the legal framework for alternative dispute resolution. We hope we will be able to launch this with you together here in Shenzhen, and it will become as successful as the New York Convention.  

The Working Group III I alluded to already is also an important working group for us, because we have recently received a mandate to work on possible reform of investor-state dispute settlement. It is a very sensitive and disputed topic that is considered by many as in deep need for reform. I would like to share with you, and I do this informally,  there is, in my view, consensus among all the member countries participating in these discussions that reform is needed. Where we have no consensus so far, and where a lot of work is required, is on the scope of this reform, of whether we want to have a reform of the existing system, or whether we want to have an in-depth revolution of the system, as is suggested by some of the participating States. We will continue to work on this and hopefully also report and brief you as we go along on the progress of this working group.

Now, let me just stop for a little minute on the working group on electronic commerce. It is the one that has first set the foundations for the digital economy. The working group on electronic commerce started out with the electronic signature and with the dematerialization of documents for all the trade relations, but we have to bring it now to a much more accelerated and more innovative stage, in order to be always on top of the progress and the huge developments in the digital economy and ready to “corner the market”. This is why we are currently working on digital identity management and trust services, which is a basic right for all citizens, for all the people to be actors and participate in electronic commerce or the digital economy. It is necessary to first of all have a digital identity, which is really the base of what is needed in order to be able to engage in digital trade.

We also work on a number of very specialized instruments, for example we are bringing this year to the Commission a Checklist on Contractual Elements for Cloud Computing, and hope to hear more from you here, from your clients, from the companies that are active here, from the in-house counsel that are present in this room, what are the legal rules that are needed to enable you to actively participate in international and digital international trade and small contracts.

But let me move on, because as you can see I'm fairly passionate about all work that is done by UNCITRAL, which is easy, because I haven't contributed to any of it so far. Let me also highlight that there is also very good work going on in the area of insolvency law, and we are bringing to the Commission this year a Model Law on the recognition of cross border insolvency judgments in order to avoid insolvency procedures in two different countries can go parallel without possibility of recognition.

The work of Working Group VI on security interests is a major part of day to day operation of companies working in international trade. So, with this, and, for the sheer pleasure of showing you the smiling faces of those who contributed to the work on the mediated settlement convention let me show you a group photo of Working Group II.

Here is a list of the legal instruments we have that followed the New York Convention, and you will see, indeed, the UNCITRAL Arbitration Rules, that are the founding rules that are used around the world and also around the region for arbitration proceedings. We have a number of Model Laws. One of the most recent key features are the UN Convention on transparency in treaty-based investor-state arbitration. It is the work on the Mauritius Convention that brought to UNCITRAL the work on reform of ISDS.

So, what you will find in the UNCITRAL instruments is, first and foremost, greater harmony in international trade. They are available in six languages, and while this creates a constraint for our work, because we have to be accurate in all six official languages of the United Nations, it constitutes an incredible added value. What is important also is that our instruments have wide acceptance, that they foster consistent interpretation, because we follow them closely, and they are being used and developed by experts, scholars, government officials specializing in given areas.

Now, how do we promote the UNCITRAL Convention? Here I will go fairly quickly, because my colleague Minjung is going to explain more in detail what we do for the promotion of the New York Convention. But I just wanted to highlight to you why the General Assembly invites all states that have not yet done so to consider becoming parties to the Convention. We hope to convince the almost 30 countries that are not yet signatories to the New York Convention to adhere to it, firstly because it is a great signal of rule of law, the respect of rule of law, and it is recognized as such, for instance, by the World Bank, when it does its rating for doing business. One of the first instruments that is being checked is whether or not the country is a member of the New York Convention. So, yes, it helps boost trade and development. It provides good tools for countries seeking FDI (Foreign Direct Investment). As I mentioned, this is one of the indicators of “ease of doing business”. And it creates legal certainty and stability for stakeholders. Now, what we do will be explained in further detail by Minjung.

Approximately 80% of member states of United Nation have ratified the New York Convention, and we continue to assist actively and provide assistance to those member states who wish to ratify or to accede to the New York Convention. We brief ministries and legislators, give assistance to drafting, and help with translation. We hope some of the countries could join the ceremony for the 60th anniversary of the New York Convention in New York, to give it more prominence. We have so far reached 159 member countries, and we are still hoping for the 160th, which would be very auspicious for the 60th anniversary. So, please keep your fingers crossed for that 160th member.

The New York Convention Guide will be presented by my colleague Minjung. What we have, and I think this is important, and was also alluded to, is a very consistent and systematic database of application of cases to show and to support application and interpretation of the New York Convention. It has abstracts of the cases in all six official languages and the original decision of the case in the original language is available upon request from the secretary.

We also have a digest on the Model Law that again analyses and annotates case law that is summarized in this digest. And we are working towards, as I mentioned to you, greater membership in the New York Convention, basing it on the pride and the recommendations we are receiving.

Kofi Annan in 1998 mentioned the New York Convention as a landmark instrument that has many virtues, as follows: “Let me turn now to the subject of today's discussions, the New York Convention. This landmark instrument has many virtues. It has nourished respect for binding commitments, whether they have been entered into by private parties or governments. It has inspired confidence in the rule of law. And it has helped ensure fair treatment when disputes arise over contractual rights and obligations. As you know, international trade thrives on the rule of law: without it parties are often reluctant to enter into cross-border commercial transactions or make international investments”.

As of today, courts, in 159 jurisdictions of the world, apply the Convention’s provisions and recognize awards rendered abroad or rendered following the application of a foreign law. Such quasi-universal acceptance of the recognition and enforcement process brings legal certainty to the business community worldwide. It is also a demonstration of a strong commitment to the rule of law. The global acceptance of the NYC represents a step towards better access to justice for economic operators, in line with the 2030 Agenda for Sustainable Development.  

I'm showing here the accession rate, and you see that we are only short of the 160th. We have Sudan that joined in March 2018, Cabo Verde in March, a few days earlier, and Angola last year. We are waiting for Iraq where the Council of Ministers has passed the resolution and it is now with the Parliament. And so hopefully Iraq will the next on to access.  Somalia is also in line, as is PNG. So we have a status map which is at 159, hoping that we can move it to 160.

Any questions you might have regarding the New York Convention or any of the work we do at UNCITRAL, you can find it on our website. With that, I would like to thank you for your kind attention to a presentation that is more in the form of publicity for the institution I represent, but it's a great pleasure and honor for me to be here and highlight the work we do in Vienna and New York. Thank you very much.