INTRODUCTION TO
UNCITRAL
MODULE 1
BASIC TERMS
• International economic laws: those rules of
international law which directly concern economic
exchange between subjects of international law.
• International trade law: body of rules dealing
with economic activities of buying and selling
where the transaction crosses a border.
BASIC TERMS
• International commercial laws: a body of legal
rules, conventions, treaties, domestic laws and
customs that governs international commercial
transactions.
DIFFERENCE BETWEEN INTERNATIONAL COMMERCIAL
LAWS AND INTERNATIONAL TRADE LAWS
International
commercial law International trade law
• Body of law dealing • Body of law dealing
with private individuals. with sovereign states.
• Business. • Economics.
• Focuses on transaction. • Focuses on trade.
• Choice of law. • International law.
• Rule oriented. • Power oriented.
• Agencies like • Agencies like WTO,
UNCITRAL, ICC, GATT,ITO are involved.
UNIDROIT are involved.
DEVELOPMENT OF COMMERCIAL LAWS
• Three primary stages of development
i. Lex mercatoria
ii. Incorporation of law of merchant to domestic
laws
iii. Modern law of international commercial
transaction
FEATURES OF MODERN COMMERCIAL
LAWS
1. Rules of commercial laws exhibit similarity in all
domestic jurisdictions:
Reason-
i. Principle of autonomy of parties.
ii. Pacta sunt servanda.
iii. Arbitration as dispute resolution.
2. Their application in various jurisdictions is
provided for by authority of national sovereign.
3. Their formulation is brought about by international
agencies created by governments or non-
governmental bodies.
SOURCES OF COMMERCIAL LAWS
A. International legislation- is an expression of a deliberate
normative regulation which is devised internationally and then
introduced into municipal laws by national legislation.
• There are two ways of creating international legislation: by state
drafting and by model laws.
• International legislation is of three types:
1. Convention providing for rules governing the conflict of laws
that might arise in international transaction;
2. Convention decreeing uniform law for international transaction,
and
3. Conventions containing draft of uniform law that can be enacted
for municipal purposes.
Disadvantages :
1. Rigidity 2. reservations by state parties.
SOURCES OF COMMERCIAL LAWS
B. International trade customs- is interpreted to
mean the standard forms of contract and general
conditions formulated by various international
agencies, such as the International Chamber of
Commerce, the United Nations Economic
Commission for Europe, the Comite` Maritime
International and International Law Association.
Other trade customs which are not so formulated
are referred to as trade usages and practices.
SOURCES OF COMMERCIAL LAWS
C. Decisions of arbitral tribunals-
All commercial agreements contain arbitration
clause.
Arbitration tribunals are of two types: permanent
and ad hoc.
ORIGIN OF UNCITRAL
• UNCITRAL stands for the United Nations
Commission on International Trade Law.
• It is a subsidiary body ( in accordance with article
22 of U.N Charter) of General Assembly of United
Nations which was established by
Resolution 2205(XXI) of 17 December 1966.
• objective : progressive harmonization and
unification of laws of international trade.
ESTABLISHMENT
• On the twenty-first session of General Assembly –
• Hungary took initiative in 1965- GA having a responsibility to
progressive development of international law and codification.
• General Assembly requested Secretary- General to submit a
report.
• Report submitted after a year under leadership of Dr. Clive M.
Schmitthoff- considered by Sixth Committee- UNCITRAL was
created.
• After considering the due report, it was found international
trade is a key technique to increase world peace and security.
• Hindrances to world trade must be removed.
• Enforce the outcome of UNCTAD (United Nations Conference
on Trade and Development, 1964 )
COMPOSITION
• Smaller groups for deliberations.
• UNCITRAL was originally composed of 29 states.
• It’s membership was expanded in 1973 to 36 states by
General Assembly resolution 3108.
• Currently consists of 60 members (2002).
• Membership is structures so as to be representative of
various geographical regions:
• 14 members are African States,
14 are Asian States,
08 are East European states,
10 are Latin American states and
14 are Western European other States.
STRUCTURE
i. Commission- members, observers, IGOs and
NGOs.
ii. Working Groups-
a. E-commerce
b. Arbitration and Conciliation
c. Insolvency Laws.
d. Micro-small, medium enterprises.
e. Security interests.
f. Online dispute resolution.
iii. Secretariat
FUNCTIONS
• Co-ordinating with various organizations for
uniform laws.
• Promoting wider participation.
• Adoption of new model laws.
• Uniform interpretation of laws.
• Collecting information on new development and
case laws.
• Collaborate with UNCTAD.
CONTRIBUTION OF UNO IN DEVELOPING
PRIVATE INTERNATIONAL TRADE LAW
• 6th committee of United Nations deals with legal
affairs.
• Resolution 2102 of General Assembly- conflicts
and divergence constitutes an obstacle to
development of world trade.
• Two methods are used-
i. choice of law rules within framework of private
international laws (clinical method).
ii. Harmonization and unification of substantive
rules (preventive method)
CONTRIBUTION OF UNO IN DEVELOPING
PRIVATE INTERNATIONAL TRADE LAW
