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Presented in "Celebrating Success: 25 Years United Nations Convention on Contracts for the International Sale of Goods" (Collation of Papers at UNCITRAL -- SIAC Conference 22-23 September 2005, Singapore), published and copyright by the Singapore International Arbitration Centre at 1-7. Reproduced with permission of the SIAC.

Singapore's Experience with the Work of UNCITRAL

Chan Sek Keong
Attorney-General, Singapore

Mr Goh Joon Seng, Chairman, SIAC, distinguished speakers, ladies and gentlemen:

Twenty-five years ago, the United Nations Convention on Contracts for the International Sale of Goods ('Sales Convention') was adopted. Twenty years ago, the UNCITRAL [1] Model Law on International Commercial Arbitration ('Arbitration Model Law') was issued. To commemorate both these milestone events, UNCITRAL has partnered a range of institutions around the world to host a series of conferences. Singapore is proud to be the venue for the conference in Asia.

UNCITRAL was established in 1966 to facilitate international trade through the use of common rules governing international trade. Differences and incompatibilities in national trade laws create unnecessary obstacles to the expansion of international trade. UNCITRAL set about its task by modernising and harmonising the rules governing international trade. This is no easy task, given the different legal norms, concepts and rules of the legal systems of the major trading nations. To its great credit, UNCITRAL has produced a large number of modern legal texts that are now found in international conventions,[2] [page 1] model laws,[3] legal guides,[4] legislative guides,[5] rules [6] and notes.[7] Many have become landmarks and guiding beacons in their fields of law in international trade, such as the Sales Convention,[8] the Arbitration Model Law,[9] the Arbitration Rules [10] and the Model Laws on Electronic Commerce [11] and on Cross-Border [page 2] Insolvency.[12] UNCITRAL model laws are a fusion of the best legal principles and rules of the world's major legal systems. As such, they enable all nations to conduct their trade with one another using common legal norms, concepts and rules. UNCITRAL acts as a surrogate mother, receiving the seminal inputs and the best genes from the bloodlines of the families, conceiving and giving birth to the model babies for adoption and nurture by nations.

Singapore's experience with UNCITRAL has been positive, even though she has only adopted a few UNCITRAL text laws, such as the Arbitration Model Law and the Sales Convention. However, we take pride being the first country in the world to have adopted the UNCITRAL E-Commerce Model Law. The success of this law is reflected in the impressive growth of online transactions in Singapore. By 2004, 39% of Singapore's 1.7 million individual internet users aged 15 and above were online banking customers and 55.5% were using online government related transactions and 29.9% were shopping online.[13] The overall usage of electronic commerce by businesses had increased to 42% in 2003. Companies using e-commerce as supplier increased to 26% in 2003, and those using e-commerce as customer increased to 35% in 2003.[14]

The Sales Convention is an extraordinary example of international legal cooperation spanning a period of more than 50 years in the construction of a codified lex mercatoria for transnational sales. Adopted in 1988 by 11 States, the Sales Convention is today the law in 63 nations, which collectively account [page 3] for over two-thirds of international trade in goods. According to Hans Corell, it has 'become a flagship of international trade unification'.[15] Singapore's major trading partners such as the United States, China, Australia and many European Union countries have ratified it. In ASEAN, Singapore led the way in adopting the Sales Convention side by side with the existing common-law based Sale of Goods Act. The trading community now has a choice of two legal regimes. I should add that the Committee that recommended Singapore ratify the CISG had also expressed the hope that 'if Singapore adopts the Convention, the other ASEAN countries may soon follow suit',[16] leading eventually to a uniform law of sales in ASEAN. It remains but a hope.

In 1986 Singapore acceded to the 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards, following upon the recommendation of a Working Committee, which I chaired in 1985 on legal services in Singapore.[17] In 1994 we adopted the Arbitration Model Law. Today, the SIAC counts itself as an important international arbitration centre in the region. By the end of 2004, SIAC had administered more than 819 cases. Last year, 81 cases were administered by SIAC of which 51 were international cases. These numbers appear small compared with other regional arbitration centres, but they refer only to SIAC-administered cases. There are many more ad hoc arbitration cases held in Singapore outside SIAC including arbitrations under the ICC which has its Asian centre in Singapore. Cases that now come before SIAC involve much higher sums than before. Over the last five years, the total amount of claims reached about US$1 billion per year.

Let me now say something about Singapore's work in UNCITRAL. Singapore was first elected to UNCITRAL in 1971 as a member of the Asian group and has remained as an active member since then. We offered ourselves for election because we felt that as a major trading nation with a developed legal system, we could contribute positively to the work of the Commission.

Singapore has indeed contributed to the work of UNCITRAL in many ways. Her first representative in UNCITRAL is retired Justice Warren Khoo. His work on the Sales Convention and the Arbitration Model Law are well known. [page 4] He was Chairman of UNCITRAL twice, at the 9th Session held in 1976 and at the 14th Session held in 1981, and chaired the Drafting Committee of the 1980 Vienna Diplomatic Conference on the Sales Convention. He also played a significant role in the drafting of the Arbitration Model Law.

Warren's role at UNCITRAL was taken up by other legal officers from my Chambers. Goh Phai Cheng was Vice-Chairman of the 13th Session in 1980 and Chairman of the 28th Session in 1995. There is a gap of 15 years when we were active only in the wings. Our current representative in UNCITRAL is Jeffrey Chan. He was elected Chairman of the 33rd Session in 2000 and was the Vice-Chairman of the recently concluded 38th Session. In July this year, he chaired the Commission's deliberations on the draft Convention on the Use of Electronic Communications in International Contracts.[18] Fresh from successfully steering the Working Group towards adoption of the text of the preliminary draft Convention,[19] Jeffrey followed through by steering the Commission to the adoption of the draft Convention. Other Singapore delegates were also quietly but actively working behind the scenes in the drafting committees and helping to forge consensus in the corridors of the United Nations.

Singapore has also shared her expertise and experiences in UNCITRAL's work with her regional trade partners. In 1992, one of my senior officers accompanied former Secretary of UNCITRAL, Dr Gerold Herrmann, and the incumbent Secretary, Dr Jernej Sekolec, to Bangkok, Jakarta and Surabaya to promote awareness of UNCITRAL's work. This broke new ground as it was the first time that UNCITRAL had ventured to this part of the world to promote its work. Both these Secretaries realised that promoting the global use of UNCITRAL texts was just as important as, if not more than, creating them. In November 2000, another officer from my Chambers joined the UNCITRAL Training Team that provided training in Beijing, China. In 2002, senior officers from my Chambers, together with Ms Jenny Clift, senior legal officer of the Secretariat, conducted seminars in Phnom Penn, Cambodia, and Jakarta, Indonesia, on the UNCITRAL Arbitration and Conciliation Rules and the Sales Convention.[20] Additionally, Singapore has given other kinds of support to UNCITRAL's work, such as contributing regularly to its trust fund to enable disadvantaged members of UNCITRAL to attend meetings, seminars, conferences and workshops. We also have an established mechanism for the sharing of jurisprudential case developments through the Case Law on UNCITRAL Texts ('CLOUT'),[21] and have appointed national correspondents to CLOUT for the Arbitration Model Law and the Sales Convention. [page 5]

Let me conclude by going 'back to the future' and to the basics. In September 1993, I spoke at the regional meeting of the Pacific Economic Council on 'Harmonising International Law to Benefit Trade, Business and Investment in the Pacific Basin'. My speech focused on the advantages of harmonising the trade laws of the Pacific Basin countries. A very distinguished international lawyer, Professor Dr Mochtar Kusuma-Atmadja [22] spoke on the problem of political aversion to UNCITRAL texts in countries strongly rooted in the notion that national sovereignty could be prejudiced by the acceptance of UNCITRAL laws. He suggested that all Pacific Basin law schools should teach UNCITRAL law courses so that law graduates who might eventually become political leaders would have no difficulty in accepting UNCITRAL texts.

It was an excellent suggestion but it will not bear fruit unless the law schools have the financial and manpower resources to teach these subjects. For state-funded law schools, it is a question of prioritising state resources for national legal needs. Singapore is fortunate in having the resources. Our law school offers to its LL B and LL M degree candidates various modules on international trade law involving UNCITRAL model laws. It should encourage graduate students from the ASEAN countries to take these courses. It may also wish to consider whether there is any first-mover advantage in establishing itself as the centre for studies in UNCITRAL texts in the region, and at the same time build up a community of ASEAN legal scholars. These developments are beneficial to ASEAN in the long term, not least in ensuring that their policy makers are able to discuss harmonisation using a common platform. I can see a role for the Commission in assisting our Law Faculty in whatever way it can to promote the adoption of UNCITRAL model laws in the region.

There is reason to be optimistic about the prospects for harmonisation of ASEAN trade laws through the work of UNCITRAL. The 4th Workshop of the ASEAN-Australia Development Cooperation Programme E-Commerce [page 6] Project was held recently in Kuala Lumpur from 28 to 30 July 2005. The consultants to the project recommended that ASEAN countries adopt legislation essentially modeled after the UNCITRAL Model Law on E-Commerce and the Model Law on E-Signatures. I understand that several ASEAN countries are in the process of drafting electronic commerce legislation. The Workshop also considered the relevance and impact of the recently adopted UNCITRAL E-Contracts Convention as a possible new international standard. I understand that some delegates at the KL workshop suggested that Singapore might consider providing in-depth training on the Convention in view of our involvement in the formulation of the Convention. Speaking for my Chambers, we are certainly willing to provide such training assistance.

Let me conclude by declaring that we are happy that we have been able to make many positive contributions to the work of the Commission in the last 38 years. We hope that we can continue to do so for as long as possible. I wish the Commission continuing success in its work and I wish you all a successful conference.

Thank you. [page 7]


FOOTNOTES

1. United Nations Commission on International Trade Law.

2. The three main UNCITRAL Conventions which have entered into force are

(1) the United Nations Convention on Contracts for the International Sale of Goods (1 January 1988);
(2) the Convention on the Limitation Period in the International Sale of Goods (1 August 1988); and
(3) the United Nations Convention on the Carriage of Goods by Sea (1 November 1992).

The following three UNCITRAL draft Conventions have been adopted but have not entered into force yet:

(1) the United Nations Convention on International Bills of Exchange and International Promissory Notes (1988);
(2) the United Nations Convention on the Liability of Operators of Transport Terminals in International Trade (1991); and
(3) the United Nations Convention on Independent Guarantees and Stand-by Letters of Credit (1995).

The United Nations Convention on the Assignment of Receivables in International Trade, a draft Convention with the objective of promoting the movement of goods and services across national borders by facilitating increased access to lower-cost credit, was completed by UNCITRAL in 2001. UNCITRAL should also be credited for promoting the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Although prepared by the United Nations prior to its own existence, this forms an integral part of UNCITRAL's programme of work.

3. UNCITRAL Model Laws are texts for States to incorporate into their respective domestic laws. These Model Laws are inherently flexible in nature and can be modified, although modification would result in less harmonisation. Several notable Model Laws were adopted by the Commission, including

(1) the UNCITRAL Model Law on International Commercial Arbitration (1985);
(2) the UNCITRAL Model Law on International Credit Transfers (1992);
(3) the UNCITRAL Model Law on Procurement of Goods and Construction (1993);
(4) the UNCITRAL Model Law on Procurement of Goods, Construction and Services (1994);
(5) the UNCITRAL Model Law on Electronic Commerce (1996);
(6) the UNCITRAL Model Law on Cross-Border Insolvency (1997); and
(7) the UNCITRAL Model Law on Electronic Signatures (2001).

4. The three Legal Guides that have been published are:

(1) the UNCITRAL Legal Guide on Electronic Funds Transfers (1987);
(2) the UNCITRAL Legal Guide on Drawing up International Contracts for the Construction of Industrial Works (1988); and
(3) the UNCITRAL Legal Guide on International Countertrade Transactions (1992).

5. The most prominent UNCITRAL Legislative Guide is the one on Privately Financed Infrastructure Projects (2001).

6. These include the UNCITRAL Arbitration Rules adopted in 1976, the UNCITRAL Conciliation Rules (1980) and Uniform Rules on Contract Clauses for an Agreed Sum Due upon Failure of Performance (1983).

7. The UNCITRAL Notes on Organising Arbitral Proceedings (1996), for example, are designed to assist arbitration practitioners by providing an annotated list of matters on which the arbitral tribunal may wish to formulate decisions during the course of arbitral proceedings.

8. The United Nations Convention on Contracts for the International Sale of Goods entered into force on 1 January 1988.

9. Adopted by UNCITRAL in 1985, the UNCITRAL Model Law on International Commercial Arbitration is designed to assist States in reforming and modernising their laws on arbitral procedure so as to take into account the particular features and needs of international commercial arbitration. It has been enacted into law by a large number of jurisdictions from both developed and developing countries. Legislation based on the Model Law has been enacted in Australia, Bahrain, Bermuda, Bulgaria, Canada, Cyprus, Egypt, Germany, Guatemala, Hong Kong Special Administrative Region of China, Hungary, India, Iran, Ireland, Kenya, Lithuania, Macau Special Administrative Region of China, Malta, Mexico, New Zealand, Nigeria, Oman, Peru, Russian Federation, Singapore, Sri Lanka, Tunisia, Ukraine, within the United Kingdom of Great Britain and Northern Ireland, within the United States of America (California, Connecticut, Oregon and Texas) and Zimbabwe.

10. Adopted in 1976, the UNCITRAL Arbitration Rules provide a comprehensive set of procedural rules upon which parties may agree for the conduct of arbitral proceedings arising out of their commercial relationship. The Rules are widely used in ad hoc arbitrations as well as administered arbitrations.

11. The Model Law on Electronic Commerce, adopted in 1996, is intended to facilitate the use of modern means of communications and storage of information, such as electronic data interchange ('EDI'), electronic mail and telecopy, with or without the use of such support as the Internet. It is based on the establishment of a functional equivalent for paper-based concepts such as 'writing', 'signature' and 'original'. By providing standards by which the legal value of electronic messages can be assessed, the Model Law should play a significant role in enhancing the use of paperless communication. In addition to general norms, the Model Law also contains rules for electronic commerce in specific areas, such as carriage of goods. With a view to assisting executive branches of governments, legislative bodies and courts in enacting and interpreting the Model Law, the Commission has produced a Guide to Enactment of the UNCITRAL Model Law on Electronic Commerce. Legislation based on the UNCITRAL Model Law on Electronic Commerce has been adopted in Australia, Bermuda, Colombia, France, Hong Kong Special Administrative Region of China, Republic of Korea, Singapore and, within the United States of America, Illinois. Uniform legislation influenced by the Model Law and the principles on which it is based has been prepared in Canada (Uniform Electronic Commerce Act, adopted in 1999 by the Uniform Law Conference of Canada) and in the United States (Uniform Electronic Transactions Act, adopted in 1999 by the National Conference of Commissioners on Uniform State Law) and enacted as law by a number of jurisdictions in those countries.

12. The purpose of the Model Law on Cross-border Insolvency, adopted in 1997, is to promote modern and fair legislation for cases where the insolvent debtor has assets in more than one State. The text deals with conditions under which the person administering a foreign insolvency proceeding has access to the courts of the State that has enacted the Model Law, determines conditions for recognition of a foreign insolvency proceeding and for granting relief to the representative of such foreign proceeding, permits courts and insolvency administrators from different countries to co-operate more effectively, and contains provisions on co-ordination of insolvency proceedings that take place concurrently in different States. A Guide to Enactment was published with a view to assisting governments in preparing legislation based on the Model Law. Legislation based on the Model Law has been adopted in Eritrea and Mexico.

13. Annual Survey on Infocomm Usage in Households and by Individuals for 2004 at www.ida.gov.sg.

14. Survey on Infocomm Usage in Businesses for 2003 at www.ida.gov.sg.

15. Hans Corell, Under-Secretary-General for Legal Affairs, The Legal Counsel, at his Opening Speech at UNCITRAL's 33rd Session in New York on 12 June 2000.

16. Report of the Sub-Committee on Commercial Law, Law Reform Committee, Singapore Academy of Law, entitled 'United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980): Should Singapore Ratify?' (10 August 1994).

17. See 'If Singapore aims to be an international arbitration centre, it must adopt a world view of international arbitration.' (Sub-Committee of the Law Reform Committee of Singapore, 1991).

18. The 38th Session of the Commission was held in Vienna from 4-15 July 2005.

19. The UNCITRAL Working Group IV on Electronic Commerce completed its deliberations and adopted the text of the preliminary draft Convention on the Use of Electronic Communications in International Contracts at its 44th Session in October 2004.

20. These training sessions were conducted in Phnom Penn, Cambodia from 2-5 April 2002 and in Jakarta, Indonesia from 8-10 April 2002.

21. CLOUT or Case Law on UNCITRAL Texts, currently covers, inter alia, the Convention on the Limitation Period in the International Sale of Goods (NY, 1974), as amended by the Protocol of 1980, the United Nations Convention on CISG (Vienna, 1980), UNCITRAL Model Law on International Commercial Arbitration (1985) and the Hamburg Rules.

22. Former Foreign Minister of Indonesia, and Member of the Law Commission of the United Nations.


Pace Law School Institute of International Commercial Law - Last updated May 31, 2006
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