Identifier
Created
Classification
Origin
09UNVIEVIENNA356
2009-07-24 15:06:00
UNCLASSIFIED
UNVIE
Cable title:  

UNCITRAL Adopts Insolvency Practice Guide At Commission

Tags:  ABUD AORC EAID EINV ETRD KCRM KUNR UNCITRAL AU UN 
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TO RUEHC/SECSTATE WASHDC PRIORITY 9875
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RUEHRN/USMISSION UN ROME 0060
INFO RUEHVI/AMEMBASSY VIENNA 1460
RUEHXX/GENEVA IO MISSIONS COLLECTIVE
RUEHSW/AMEMBASSY BERN 0209
RUEHBY/AMEMBASSY CANBERRA 0743
RUEHLO/AMEMBASSY LONDON 1267
RUEHOT/AMEMBASSY OTTAWA 0754
RUEHFR/AMEMBASSY PARIS 1125
UNCLAS SECTION 01 OF 03 UNVIE VIENNA 000356 

DEPT FOR IO/T, EB/IFT/ODF AND L/PIL
EMBASSIES FOR ECON/POL

SIPDIS

E.O. 12958: N/A
TAGS: ABUD AORC EAID EINV ETRD KCRM KUNR UNCITRAL AU UN
SUBJECT: UNCITRAL Adopts Insolvency Practice Guide At Commission
Session

REF: A) UNVIE VIEN 000347
B) UNVIE VIEN 129

UNCLAS SECTION 01 OF 03 UNVIE VIENNA 000356

DEPT FOR IO/T, EB/IFT/ODF AND L/PIL
EMBASSIES FOR ECON/POL

SIPDIS

E.O. 12958: N/A
TAGS: ABUD AORC EAID EINV ETRD KCRM KUNR UNCITRAL AU UN
SUBJECT: UNCITRAL Adopts Insolvency Practice Guide At Commission
Session

REF: A) UNVIE VIEN 000347
B) UNVIE VIEN 129


1. (U) Summary and Background. The United Nations Commission on
International Trade Law (UNCITRAL) held its forty-second session in
Vienna from June 29 to July 17, 2009. UNCITRAL is composed of 60
member states, including the United States. The session was also
attended by 26 observer states, and several observer organizations,
such as the FAO and the World Bank. The most significant
accomplishment during the session was the adoption of the UNCITRAL
Practice Guide on Cross-Border Insolvency. The Commission also
authorized continued work on revisions to the 1994 UNCITRAL Model
Law on Procurement and the 1976 UNCITRAL Arbitration Rules, as well
as finalization of a Supplement to the Legislative Guide on Secured
Transactions specific to security rights in intellectual property.
End summary.

--------------
Insolvency
--------------


2. (U) The Commission adopted a UN Practice Guide on the use of
cross-border "Protocols" between national courts and other
authorities as well as parties to cases and authorized the
Secretariat to transmit it to Governments with the request that it
be made available to relevant authorities so that it becomes widely
known and available. In insolvency proceedings where debtors have
assets or subsidiaries in more than one state, there is generally an
important need for cross-border cooperation in, and coordination of,
the supervision and administration of the assets, including as
applicable multiple parallel insolvency proceedings. The decision
adopting the Practice Guide noted that cooperation and coordination
in cross-border insolvency cases could help rescue financially
troubled individuals and enterprises, as well as avoiding
unnecessary delay and costs. The Commission previously adopted the
UNCITRAL Model Law on Cross-Border Insolvency that provides a
legislative framework for effective cross-border coordination and
cooperation, which has been enacted in the U.S. as part of the

federal Bankruptcy Code.

--------------
Procurement
--------------


3. (U) Per Ref A, the Commission began, but did not complete, a
second reading of a revised UNCITRAL Model Law on Procurement. For
the past several years, the Working Group on Procurement has been
engaged in an effort to update UNCITRAL's 1994 Model Law on Public
Procurement and its accompanying Guide to Enactment (widely used by
developing countries, the World Bank and others) to reflect new
practices and technological developments, in particular those
resulting from the use of electronic communications in public
procurement. New issues included coverage of military procurement
and use of socio-economic factors. The Committee of the Whole did
not complete the reading of the model law, and the Commission urged
the Working Group to complete its work as soon as possible in light
of the impact that the revised Model Law would have on ongoing
procurement law reforms at the local and regional levels, especially
in developing countries.

--------------
Arbitration and Conciliation
--------------


4. (U) The Commission reaffirmed that Working Group II (arbitration
and conciliation) should continue work on revision of the 1976
UNCITRAL Arbitration Rules, which are widely accepted
internationally, with the hope that the final review and adoption of
the revised rules would take place at the forty-third session of the
Commission in 2010. The Commission also decided that Working Group
II should take up work on transparency in treaty-based
investor-state disputes immediately after it completes it current
work on revising the Arbitration Rules. The Commission also decided
that the existing mechanism on designating and appointing
authorities under the 1976 UNCITRAL Arbitration Rules should not be
changed. In September 2008 Working Group II had discussed a
proposal whereby, if the parties were unable to agree on an
appointing authority, the Secretary General of the Permanent Court
of Arbitration (PCA) would act directly as the appointing authority.

UNVIE VIEN 00000356 002 OF 003


Under the existing Rules, the PCA Secretary-General is the default
designating authority, responsible for designating the appointing
authority.


5. (U) The Secretariat questioned the proposed expanded role for
the PCA under the Arbitration Rules, pointing out inter alia that
the PCA was neither a UN body, nor a body created to deal with
commercial, non-governmental disputes. The majority of delegations
that spoke, including the United States, supported the position of
the Secretariat.

--------------
Rotterdam Rules
--------------


6. (U) The Commission authorized the Secretariat to prepare a brief
introductory note explaining how the UN Convention on Contracts for
the International Carriage of Goods Wholly or Party by Sea
(Rotterdam Rules) came into being, along with an index to the
lengthy trauvaux preparatoires. Strong reservations were expressed
regarding the preparation of any explanatory note or commentary to
the Rotterdam Rules, as any interpretive document could delay
ratification. Therefore, the preparation of such a document was not
authorized. The Rotterdam Rules were adopted by the Commission at
the forty-first (2008) session, and endorsed by the UNGA. A special
signing ceremony will be held at The Hague in September 2009, and
the United States is expected to sign the Convention at that time.

--------------
E-Commerce
--------------


7. (U) The Commission requested that the Secretariat remain engaged
in the World Customs Organization-UNCITRAL Joint Legal Task Force on
Coordinated Border Management, which is considering the legal
aspects involved in implementing a cross-border "single window"
facility for trade facilitation. The Commission further requested
that the Secretariat convene a Working Group session should the
progress of the Task Force warrant it. The Commission also
requested that the Secretariat conduct studies and hold colloquiums,
resources permitting, on two proposals by the United States: (1)
the electronic transferability of rights to goods in transit, as
well as on electronic transportation of electronic documents for
bills of lading, letters of credit, insurance and other trade in and
transportation of goods; and (2) online dispute resolution in
cross-border electronic commerce transactions.

--------------
Secured Finance
--------------


8. (U) Working Group VI continues to work on a supplement to the
2007 Legislative Guide on Secured Transactions (already endorsed by
the UNGA) addressing the intersection of intellectual property (IP)
law and secured finance law. The Commission expects this work to be
ready for final adoption at its Plenary session in 2010.

--------------
Rules of Procedure and Methods of Work
--------------


9. (U) Little progress was made on the review of a Secretariat
reference document setting forth proposed guidelines for UNCITRAL's
chairpersons, delegates, and the Secretariat. There was contentious
debate on issues such as the definition of consensus, the treatment
of dissenting member states, and the role of voting during a two-day
informal session and during the formal Plenary session. The U.S.
again opposed changes that would impose more rigid rules and thereby
significantly curtail the productive work done in UNCITRAL over the
past decades. The text will be reviewed again at a future session
of the Commission.

--------------
Next Commission Session
--------------


10. (U) The Commission approved the holding of its forty-third
session from June 21 to July 9, 2010. The priorities for the next
Commission session will be determined after the fall 2009 sessions

UNVIE VIEN 00000356 003 OF 003


of the various working groups. The Commission in 2010 is also
expected to decide the future work program of the UNCITRAL for the
next several years.
PYATT