UNIDROIT - Report General Assambly 2014

EN GENERAL ASSEMBLY UNIDROIT 2014 73rd session A.G. (73) 9

Rome, 11 December 2014 Original: English/French December 2014

REPORT

(prepared by the UNIDROIT Secretariat)

Summary For the information of the members of the General Assembly Action to be taken None Related documents None Contents

Opening of the session by the President of the Institute and the Chairman of the General Assembly 2013 – 2014 2

Appointment of the Chairman of the General Assembly 2014 – 2015 2

Adoption of the agenda 2

Statement regarding the Organisation’s activity in 2014 2

Report of the Finance Committee on its 76th session and reappointment of the members of the Finance Committee 7

Final modifications to the budget and approval of the accounts for the 2013 financial year 8

Adjustments to the budget for the 2014 financial year 9

Arrears in contributions of member States 9

Approval of the draft budget for 2015 and fixing of the contributions of member States for that financial year 10

Appointment of the members of the Administrative Tribunal 11

Appointment of the Auditor 11

Any other business 11

APPENDIX I: List of participants 12

APPENDIX II: Agenda 17

APPENDIX III: Work Programme for the triennial period 2014-2016 182. UNIDROIT 2014 – A.G. (73) 9

Item No. 1 on the Agenda: Opening of the session by the President of the Institute and the Chairman of the General Assembly 2013-2014

1. The 73rd session of the General Assembly of the International Institute for the Unification of Private Law (UNIDROIT) was held at the seat of UNIDROIT on 11 December 2014 and was attended by

Chairman of the General Assembly 2013-2014

1. The 73rd session of the General Assembly of the International Institute for the Unification of Private Law (UNIDROIT) was held at the seat of UNIDROIT on 11 December 2014 and was attended by the diplomatic representatives in Italy of 46 member States and one observer (cf. the list of participants in Appendix I).

2. The Secretary-General of UNIDROIT welcomed the participants on behalf of the President of UNIDROIT, Professor Alberto Mazzoni, and the Chairman of the General Assembly for 2013 -2014, Mr Hideo Fukushima, Minister, Embassy of Japan in Italy, and proceeded to open the session.

Item No. 2 on the Agenda: Appointment of the Chairman of the General Assembly 2014-2015

3. The Secretary-General recalled that the Chairmanship of the General Assembly had traditionally rotated among the four geographic groups of UNIDROIT. According to that practice, he noted that it was now the turn of the European group to nominate the new Chair for the period 20142015.

4. Upon nomination by the representative of Italy, the General Assembly, by acclamation, appointed H.E. Mr Giancarlo Kessler, Ambassador of Switzerland in Italy, as Chairman for the period

2014-2015.

5. Upon being appointed, the Chairman expressed his gratitude to the members of the General Assembly for the nomination of his country to the Chairmanship of the General Assembly. In noting the remarkable work carried out by UNIDROIT in the preceding years, he accepted with pleasure the appointment for the coming year. He also thanked the outgoing Chairman on everyone’s behalf for the excellent work produced throughout the previous year. He stated that this year had been marked by the election of new members to the Governing Council and the adoption of the Work Programme for 2014-2016 triennium and that the General Assembly was about to hear the first results of work completed under this new configuration.

the excellent work produced throughout the previous year. He stated that this year had been marked by the election of new members to the Governing Council and the adoption of the Work Programme for 2014-2016 triennium and that the General Assembly was about to hear the first results of work completed under this new configuration. Item No. 3 on the Agenda: Adoption of the agenda (A.G. (73) 1 rev. 2)

6. The General Assembly adopted the agenda as proposed (see Appendix II).

Item No. 4 on the Agenda: Statement regarding the Organisation’s activity in 2014 (A.G. (73) 2)

7. The Chairman transitioned to the next item on the agenda and gave the floor to the Secretary-General to present the Statement regarding the Organisation’s activity in 2014, document A.G. (73) 2.

8. The Secretary-General stated that the document followed the practice, first used by the Secretariat in 2008, of providing an overview of the activities of the Secretariat in a way that linked those activities to the expenditures so that they could be assessed together. He further stated that the document also included information on voluntary contributions received by UNIDROIT in response to requests from member States for transparency on such contributions.

9. He discussed the work on international commercial contracts and noted that it was one of the flagships of UNIDROIT. He stated that the UNIDROIT Principles of International Commercial Contracts were hi ghly influential in not just commercial arbitration, but also in court proceedings and legislation, such as the new draft of the civil code of Spain and the civil codes of the Netherlands, Oman, and the Russian Federation. He then noted that a meeting of the Working Group on issuesUNIDROIT 2014 – A.G. (73) 9 3. related long-term contracts would be held in January 2015 and that considerable work had been done by the Secretariat in preparation for that meeting.

10. The Secretary-General then discussed, in the area of secured transactions, t he work on the

related long-term contracts would be held in January 2015 and that considerable work had been done by the Secretariat in preparation for that meeting.

10. The Secretary-General then discussed, in the area of secured transactions, t he work on the implementation of the Space and Rail Protocols to the Cape Town Convention. As a general matter, he noted that those activities had a high level of prio rity for two reasons: (1) the Cape Town Convention was the most successful convention pro duced by UNIDROIT in terms of number of ratifications and one of the most successf ul private law conventions ever ; and (2) the Cape Town Convention, together with the Aircraft Protocol, had a very significant economic impact and generated sizeable savings for the aviation industry. Regarding the Space Protocol, he stated that two sessions of the Space Preparatory Commission had been held and were very useful for preparing the regulations for the International Registry and for advancing consideration of the procedure for awarding the Registry contract. Regarding the Rail Protocol, he stated that the UNIDROIT Secretariat had substantially completed its work in this area, announced that the R egistry contract had been signed, and noted that a session of the Rail Preparatory Commission would be held later that day to consider and approve the revised draft regulations for the International Registry. He also noted that the European Council had decided to approve the Rail Protocol and that this approval would provide a significant boost.

11. He then discussed the work that the Secretariat had completed on the possible fourth protocol to the Cape Town Convention for Mining, Agricultural and Construction (MAC) Equipment. He noted that the first meeting of the Study Group on the proposed MAC Protocol w ould be held the following week.

12. Transitioning to the work on transactions on transnational and connected capital markets, he described that, for purely technical and administrative staffing reasons, the Secretariat had not been able to undertake significant work in this area until the arrival of new staff during the fall. He then noted that a first draft of the Legislative Guide on Principles and Rules capable of enhancing trading

described that, for purely technical and administrative staffing reasons, the Secretariat had not been able to undertake significant work in this area until the arrival of new staff during the fall. He then noted that a first draft of the Legislative Guide on Principles and Rules capable of enhancing trading in securities in emerging markets had been commissioned from an outside expert , with a view to convening a meeting of the Emerging Markets Committee in 2015 to discuss and review the draft.

13. Shifting to private law and development, the Secretary-General briefly discussed the work on contract farming, the first joint project between UNIDROIT, the Food and Agriculture Organization

(FAO), and the International Fund for Agricultural Development (IFAD), all Rome-based international organisations. He discussed the large amount of work completed by the Secretariat in 2014 , including: (1) a third session of the Working Group in March; (2) consultation events in Buenos Aires, Bangkok, and Addis Ababa to gather and consider feedback from various stakeholders in those areas; (3) a consultation event in Rome to gather and consider private sector feedback; and, (4) a fourth session of the Working Group in November, at which feedback from those consultation events was taken into account and addressed in the draft of the Legal Guide on Contract Farming. He then indicated that the Secretariat was revising the draft, which would be sent to the experts early next year with a view to adoption of the Legal Guide by the UNIDROIT Governing Council at its next session in May 2015. He noted the excellent level of cooperation with FAO and IFAD and stated that the Secretariat was looking forward to working on further topics arising out of that cooperation and was hopeful to have concrete proposals for such work in the next year.

14. Regarding the project in the area of transnational civil procedure, the Secretary-General cited it as an another example of cooperation between UNIDROIT and other organisations, as the ALI/UNIDROIT Principles of Transnational Civil Procedure had originally been developed in cooperation between UNIDROIT and the American Law Institute. He described how UNIDROIT was currently working

it as an another example of cooperation between UNIDROIT and other organisations, as the ALI/UNIDROIT Principles of Transnational Civil Procedure had originally been developed in cooperation between UNIDROIT and the American Law Institute. He described how UNIDROIT was currently working in cooperation with the European Law Institute to develop model rules for implementation of those principles in the European context and that those rules were on track for completion by 2017. He concluded by saying that the project had added immensely to the visibility of UNIDROIT throughout the4. UNIDROIT 2014 – A.G. (73) 9

world as other regional organisations had shown interest in developing similar cooperation projects with UNIDROIT, including in Latin America, the Middle East, and Asia.

15. The Secretary-General then remarked that the other activities , including the work of the Library, the Scholarship Programme, and the Publications Programme, had continued as usual . He noted that full details regarding those aspects of UNIDROIT’s work would be given in the Annual Report to be submitted to the Governing Council.

16. Lastly, the Secretary-General drew the Assembly’s attention to Annex II of the document, which contained information on extra-budgetary contributions. He noted that, in 2014, there was a higher level of such contributions, amounting to more than 10% of the regular budget. He pointed out that the largest extra-budgetary contribution was that made by IFAD fo r the work on contract farming.

17. The Chairman thanked the Secretary-General for his useful explanations on the document and then opened the floor for discussion and questions.

18. The representative of Germany clarified that, regarding paragraph 5 of the document, Germany had also signed the Space Protocol, raising the total number of signatures to four.

19. A representative of the United States expressed appreciation for the opportunity to comment on and ask questions about the Work Programme and for the wo rk done throughout the year. He enquired about the long-term contracts project and the requested elevation of its priority from low to

19. A representative of the United States expressed appreciation for the opportunity to comment on and ask questions about the Work Programme and for the wo rk done throughout the year. He enquired about the long-term contracts project and the requested elevation of its priority from low to medium. He noted that a meeting was scheduled for this project in January and expressed hope that the meeting would be productive. He further noted, however, that the project had been approved on the expectation that it could be completed in one meeting with the final product being presented to the Governing Council in May 2015. He then said that, given all of the other projects, many of which were and should be of higher priority, the United States sought assurances that such elevation would not result in a diversion of resources from other areas of work and that the project would be substantially completed by the Governing Council ’s meeting in May. Lastly, with respect to the collaboration with FAO and IFAD, he noted that the possible future work on agricultural development could be very useful, in particular work on land investment contracts.

20. The Secretary-General, in response, noted that he had not highlighted the two recommendations made by the Governing Council for changing the level of priority and had wanted first to report on the activities and the n on the use of resources. In reaching the is sue of those recommendations, he stated that it was more of a question of presentation than one of substance and that the Governing Council was only concerned that, because international contract law is such an impor tant area of UNIDROIT’s work, this project should not be kept at a low level. He then confirmed that, based on his understanding, the Governing Council was expecting the work to be substantially completed in one meeting, even if it would not be ready for adoption by the time of the Governing Council’s next meeting in May, and that no more time and resources should be devoted to the project.

21. The representative of Pakistan began by congratulating the Chairman on his appointment and ensuring him Pakistan’s full support in the work of this session. He thanked the Secretariat for the

Governing Council’s next meeting in May, and that no more time and resources should be devoted to the project.

21. The representative of Pakistan began by congratulating the Chairman on his appointment and ensuring him Pakistan’s full support in the work of this session. He thanked the Secretariat for the productive year and congratulated UNIDROIT on being granted the status of Observer by the UN General Assembly. In recognising UNIDROIT’s significant work over the previous year, h e noted in particular the following developments: (1) regarding the Space Protocol, the draft regulations for the International Registry had been finalised by the Space Preparatory Commission; (2) regarding the Rail Protocol, a seminar had been held in Berl in for governmental authorities and professional experts; (3) regarding the preparation of other protocols, work on examining the scope and benefits of the possible MAC Protocol was underway and there were two potential studies under considerationUNIDROIT 2014 – A.G. (73) 9 5. by the G overning Council on ships and maritime transport equipment and off -shore wind power generation equipment; (4) regarding the Legislative Guide on Principles and Rules capable of enhancing trading in securities in emerging markets, the Secretariat had hired the services of an expert to prepare an initial draft; and (5) regarding the Legal Guide on Contract Farming, multiple consultation events on the Guide had been held with stakeholders in several countries and the fourth session of the Working Group had exa mined draft chapters of the Guide . As agriculture was a mainstay of Pakistan’s economy, he stated that the subject of contract farming was of great significance to Pakistan and expressed that additional consultation events should be held in countries with large agricultural sectors, such as Pakistan.

22. The Secretary-General thanked the representative of Pakistan for his positive comments on the Work Programme and acknowledged the interest of Pakistan in hosting or organising a meeting on contract farming. He said that the Secretariat would notify its partners, FAO and IFAD, of this interest, that the Secretariat was planning future promotional activities with them, and that the

the Work Programme and acknowledged the interest of Pakistan in hosting or organising a meeting on contract farming. He said that the Secretariat would notify its partners, FAO and IFAD, of this interest, that the Secretariat was planning future promotional activities with them, and that the possibility of hosting a promotional event in Pakistan would be taken into consideration.

23. The representative of South Africa congratulated the Chairman on his appointm ent and thanked the Secretariat for the usual excellent arrangements for the General Assembly. He expressed support for the raising of the priority on the long -term contracts and transnational civil procedure projects and thanked the Secretary-General for the clarification that he had provided in response to the enquiry from the representative of the United States. He then informed the General Assembly that an agreement had been concluded between UNIDROIT and the Research Centre for Private International Law in Emerging Countries at the University of Johannesburg’s Faculty of Law. Lastly, he congratulated UNIDROIT on obtaining the status of Observer at the United Nations.

24. The representative of Sweden expressed gratitude to Secretary-General for the explanations provided and to the Secretariat for the work done during the year. Regarding the raising of priorities, he supported the enquiry made by the representative of the United States and sought more information regarding the implications raising those priorities would have for other activities. He then clarified that his question related not only to the work on international commercial contracts, but also to the work on transnational civil procedure. He stated that Sweden would prefer to keep the Work Programme and related priorities as adopted by the General Assembly last year, but was open to hearing more about the implications the raising of priorities would have on other more important projects.

25. The Secretary-General, in response, stated that raising the priority of the work on long-term contracts would have no financial implications for the other projects. He emphasised that it would be cost-neutral because: (1) the delay experienced in some of the projects due to staffing shortages had created some space in the budget allowing for coverage of the costs of the January 2015 meeting of

contracts would have no financial implications for the other projects. He emphasised that it would be cost-neutral because: (1) the delay experienced in some of the projects due to staffing shortages had created some space in the budget allowing for coverage of the costs of the January 2015 meeting of the Working Grou p on long -term contracts under the 2014 budget; and (2) even though it was unclear whether a second meeting of that Working Group would be necessary, a European comparative law institute had already offered to cover the costs of such a potential meeting. Regarding raising the priority of the work on transnational civil procedure, he noted that a working assumption had been established with the European Law Institute regarding a € 20,000 contribution by UNIDROIT per year for hosting a meeting and that all other costs would have to be borne by the European Law Institute. He stated that € 88,000 was available in UNIDROIT’s 2015 budget for hosting meetings and that UNIDROIT’s contribution for the transnational civil procedure project was less than one-fourth of that amount and that the remaining amount was more than sufficient to host the other meetings anticipated in 2015. He further stated that, even if UNIDROIT’s contribution for the transnational civil procedure project were lessened, it would not enable UNIDROIT to hold additional meetings on the other projects because only a certain number of meetings were feasible for those projects the following year. He concluded by saying that a change in priorities at that point in time would not negatively affect any of the other projects.6. UNIDROIT 2014 – A.G. (73) 9

26. A representative of Italy emphasised Italy’s continuing excellent relationship with UNIDROIT.

Noting that Italy held the rotating EU Presidency for the second half of 2014, she said that there were important mutual interests, in particular the Space Protocol and the need to find a suitable International Registry, and the UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects and work to broaden its membership. She then noted the amendment to the Headquarters

important mutual interests, in particular the Space Protocol and the need to find a suitable International Registry, and the UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects and work to broaden its membership. She then noted the amendment to the Headquarters Agreement, which made the Italian contribution mandatory and equivalent to Category I of the UNIDROIT Contributions Chart, as well as permitting additional voluntary contributions. She stated that this was an important element for guaranteeing the stability of Italian contributions. She further stated that it was a sign of the concrete support provided by Italy, despite evident financial difficulties, and appreciation for the excellent work done by the Secretary -General and the Secretariat.

27. The representative of Canada stated that, regarding the work on contract farming, Canada supported the identification of food security and agricultural development as important priorities for UNIDROIT’s work. He welcomed the objective of the Legal Guide on Contract Farming, which was to provide a legal analysis of the type of arrangements upon which the contract farming relationship is based, as well as information and advice on good contract practices with a view to promoting the legal empowerment of agricultural producers during the negotiation and forming of contracts. He noted that the Legal Guide could also serve as an add itional tool available to international organisations and bilateral cooperation agencies engaged in strategies and capacity -building programmes in support of contract farming, especially in developing countries. He further noted that Canada had submitted detailed comments as part of the public consultation on the project and that, overall, Canada was of the view that the Legal Guide could be a useful tool in assisting farmers in their contract negotiations, in particular when dealing with large agribusiness . He stated that a number of Canada’s comment s were aimed at making the Legal Guide more practical and useroriented and that Canada looked forward to the revised versions of the various chapters.

28. The Secretary-General expressed gratitude to Italy for the excellent cooperation and for the efforts made in the resolution of the long-standing issue of the stability of the Italian contribution. He also thanked Italy for having taken the initiative to present the draft resolution at the UN General

28. The Secretary-General expressed gratitude to Italy for the excellent cooperation and for the efforts made in the resolution of the long-standing issue of the stability of the Italian contribution. He also thanked Italy for having taken the initiative to present the draft resolution at the UN General Assembly for granting the status of Observer to UNIDROIT as an intergovernmental organisation, which had given UNIDROIT standing in all UN meetings and an automatic right to receive invitations without having to negotiate each time with the various UN Secretariats. Re garding the comments made by the representative of Canada, he noted that the Working Group on contract farming had made extensive use of Canada’s comments on the draft text and believed that those comments would greatly improve the final version of the Legal Guide.

29. The Chairman, noting that there were no further requests for the floor, proposed that the Assembly adopt the document as presented by the Secretariat, which included the request for the elevation of priorities for two subjects. In doing so, he also noted that the Secretary -General had explained, in response to the enquiries regarding the request for elevation of priorities, that such elevation would not have budgetary implications.

30. The General Assembly adopted as presented the S tatement regarding the Organisation’s activity in 2014 and elevated the priorities assigned to two subjects.

Item No. 5 on the Agenda: Report of the Finance Committee on its 76 th session (F.C. (76) 8) and reappointment of the members of the Finance Committee

31. The Chairman invited the representative of Romania, the Chair of the Finance Committee, to present the Report.UNIDROIT 2014 – A.G. (73) 9 7.

32. The representative of Romania, in presenting the Report, briefly referred to each topic that was on the Finance Committee’s agenda for its meeting on 25 September 2014. Regarding final modifications to the budget and accounts for the 2013 financial year, s he noted that it had been agreed that the actual balance in UNIDROIT’s cash account, € 89,390.42 at the time of the meeting,

modifications to the budget and accounts for the 2013 financial year, s he noted that it had been agreed that the actual balance in UNIDROIT’s cash account, € 89,390.42 at the time of the meeting, could be used for urgent repairs to UNIDROIT premises, the installation of air conditioning, the replacement of a switchboard, and replacement of old office furniture and equipment.

33. Regarding adjustments to the budget for the 2014 financial year, she stated that the Finance Committee had been informed that the Secretariat anticipated a shortfall in ordinary receipts of € 37,123.45 in 2014, primarily due to incomplete or late contribution payments, but did not intend to request supplementary funding from member States. She then no ted the amendment of the Headquarters Agreement between Italy and UNIDROIT, which had been announced at the meeting .

She reported the Finance Committee’ s recommendation that the adjustments to the budget and accounts for the 2014 financial year be approved, as well as the final modifications to the budget and the accounts for the 2013 financial year.

34. Regarding arrears in contributions of member States, she stated that the Committee had been informed that, aside from the particular situation of one member State, no member States were in arrears in their contributions by more than one year, which was a significant improvement over previous years. She further stated that the Committee had been informed that the Secretary-General was comfortable with member States being up to one year in arrears, as that situation could arise from differing accounting practices of member States. She then reported that the Finance Committee had taken note of the information concerning arrears and invited any member States wishin g to provide additional information regarding arrears to submit such information for consideration by the General Assembly at this session.

35. She stated next that the Committee had discussed the d raft budget for 2015, which was adopted as prepared by the S ecretariat. She noted that the Committee had also considered the review of the compensation and social security package offered to UNIDROIT staff and recommended

General Assembly at this session.

35. She stated next that the Committee had discussed the d raft budget for 2015, which was adopted as prepared by the S ecretariat. She noted that the Committee had also considered the review of the compensation and social security package offered to UNIDROIT staff and recommended the establishment of an informal working group to further review the compensation and social security at UNIDROIT in order to find a cost -neutral, transparent, and equitable solution for UNIDROIT staff.

36. Lastly, she reported that the Finance Committee had considered the issue of classification of member States in the UNIDROIT Contributions Chart and the desirability of reviewing the methodology used for that purpose, as requested by the General Assembly. She noted that the Finance Committee had recommended that the classification of member States be reviewed and, as appropriate, revised once every six years, with the next reclassification pro cess being deferred until 2017. She then thanked those representatives on the Finance Committee for their collaboration.

37. The Chairman thanked the representative of Romania for presenting the Report. He recalled that, in addition to taking note of the Report, the General Assembly was also responsible at this session for renewing the composition of the Finance Committee. He further recalled that the current members were appointed by the General Assembly at its 69 th session and were due for renewal at this session for three years commencing on 1 January 2015. He noted that the Finance Committee had many important functions, in particular an important advisory role relative to the preparation and modification of the budget, the determination of contributions of member States, and the management of the goods and assets of UNIDROIT. He further noted that the current composition included the following countries: Austria, Brazil, Canada, China, France, Germany, India, the Islamic Republic of Iran, Italy, Japan, Mexico, the Republic of Korea, Romania, the Russian Federation, Spain, Switzerland, the United Kingdom, and the United States of America. He then