UNIDROIT - Report General Assambly 2016

EN GENERAL ASSEMBLY UNIDROIT 2016 75th session A.G. (75) 8

Rome, 1 December 2016 Original: English/French December 2016

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 Chairman of the General Assembly 2015-2016 2

Appointment of the Chairman of the General Assembly 2016-2017 2

Adoption of the agenda 3

Statement regarding the Organisation’s activity in 2016 3

Adoption of the Organisation’s Work Programme for the 2017 – 2019 triennium 5

Final modifications to the Budget and approval of the Accounts for the 2015 financial year 8

Adjustments to the Budget for the 2016 financial year 8

Arrears in contributions of member States 9

Approval of the draft Budget for 2017 and fixing of the contributions of member States for that financial year 9

Any other business 10

APPENDIX I: List of participants 11

APPENDIX II: Agenda 172. U NIDROIT 2016 – A.G. (75) 8

Item No. 1: Opening of the session by the Chairman of the General Assembly 2015-2016

1. The 75th session of the General Assembly of the International Institute for the Unification of Private Law (UNIDROIT) was held at the seat of UNIDROIT on 1 December 2016 and was attended by the diplomatic representatives in Italy of 45 member States (cf. the list of participants in Appendix I).

2. The Chairman of the General Assembly 2015-2016, H.E. Mr Amr Mostafa Kamar Helmy, Ambassador of the Arab Republic of Egypt in Italy welcomed participants and proceeded to open the session.

2. The Chairman of the General Assembly 2015-2016, H.E. Mr Amr Mostafa Kamar Helmy, Ambassador of the Arab Republic of Egypt in Italy welcomed participants and proceeded to open the session.

Item No. 2: Appointment of the Chairman of the General Assembly 2016-2017

3. The Chairman of the General Assembly 2015-2016 noted that the end of 2016 signified the closing of an eventful year celebrating the Institute’s 90th anniversary. The Chairman noted that on 20

April 2016, he had the pleasure of chairing a special session of the UNIDROIT General Assembly held at Palazzo Altieri in Rome celebrating the Institute’s 90th anniversary, at which the Chairman shared the podium with high dignitaries from the host country and the Secretary of State of the Holy See. He noted that delegates from more than 60 countries, including both UNIDROIT member States and nonmember States, as well as representatives from various Intergovernmental Organisations attended the event.

4. He noted that many UNIDROIT member States made statements at the event acknowledging the significant contribution that UNIDROIT had made to harmonise and modernise international contract law, and gave concrete examples of how the Institute could contribute to the 2030 Agenda for Sustainable Development, with particular reference to Goal 16 and the promotion of the rule of law. The Chairman reflected on how UNIDROIT had aided the harmonisation and modernisation of private and in particular commercial law between states by formulating instruments, principles and rules. He noted that this work was of particular importance to developing countries where UNIDROIT instruments promoted economic development, supported national industrialisation programs and foreign direct investment.

5. The Chairman noted that UNIDROIT’s work had also contributed to the development of international instruments adopted under the auspices of other international organisations. The Chairman stated that UNIDROIT member States could be proud of the achievements of the Institute. The Chairman thanked UNIDROIT member States for having elected Egypt Chair of the General Assembly for

international instruments adopted under the auspices of other international organisations. The Chairman stated that UNIDROIT member States could be proud of the achievements of the Institute. The Chairman thanked UNIDROIT member States for having elected Egypt Chair of the General Assembly for 2015-2016.

6. The Chairman concluded his intervention by recalling 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 Americas group to nominate the new Chair for the period 2016-2017.

7. Upon nomination by the representative of Canada, the General Assembly, by acclamation, appointed H.E. Mr Antonio de Aguiar Patriota, Ambassador of Brazil in Italy, as Chairman for the period

2016-2017.

8. Upon being appointed, the Chairman expressed his gratitude to the members of the General Assembly for his appointment to the Chairmanship of the General Assembly. The Chairman thanked the former Chairman for his efforts over the period 2015-2016, and affirmed his support for the 2030

Agenda and the focus on Goal 16 and the commitment to the rule of law and access to justice domestically and internationally.UNIDROIT 2016 – A.G. (75) 8 3. Item No. 3: Adoption of the agenda (A.G. (75) 1)

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

Item No. 4: Statement regarding the Organisation’s activity in 2016 (A.G. (75) 2)

10. The Chairman gave the floor to the Secretary-General to present the Statement regarding the Organisation’s activity in 2016.

11. The Secretary-General noted that document A.G. (75) 2 followed the practice, introduced by the Secretariat in 2009, of providing an overview of the activities of the Secretariat in a way that linked those activities with the triennial Work Programme 2014-2016 and provided the expenditure associated with each activity.

the Secretariat in 2009, of providing an overview of the activities of the Secretariat in a way that linked those activities with the triennial Work Programme 2014-2016 and provided the expenditure associated with each activity.

12. The Secretary-General pointed out to the General Assembly that the Institute had organised several events during 2016 to celebrate UNIDROIT’s 90th anniversary. The celebration series was opened on 15 April 2016 with an event entitled “Practicing international law at the United Nations” held at the Seat of UNIDROIT. Hosted in cooperation with the Italian Society for International Organisation (SIOI), over 80 participants representing UNIDROIT member States, Rome-based UN agencies, private practices and academic institutions attended the event which featured a keynote lecture delivered by Mr Miguel de Serpa Soares, Under-Secretary-General for Legal Affairs and United Nations Legal Counsel. The Secretary-General noted that the Lectio Magistralis was introduced by Professor Alberto Mazzoni

(President of UNIDROIT) and Mr Franco Frattini (President of SIOI), and was followed by a round table composed of distinguished experts: Judge Fausto Pocar, of the International Criminal Tribunals for the former Yugoslavia and for Rwanda, Professor Sergio Carbone, of the University of Genoa, and Professor Piero Bernardini, President of the Italian Arbitration Association (AIA).

13. The Secretary-General noted that the second event held on 19 April 2016, which was the eve of the special session of the General Assembly, addressed the legacy of the League of Nations and explored its relationship with UNIDROIT. He noted the significance of the event, given UNIDROIT’s history as an auxiliary organ to the League of Nations. He explained that the event was an occasion to celebrate the publication of the volume “Commentaire du Pacte de la Société des Nations” edited by Professor Robert Kolb of the University of Geneva.

14. The Secretary-General further reflected upon the success of the 20 April 2016 special session of the General Assembly, with particular reference to the presence of his Eminence Cardinal Pietro

Robert Kolb of the University of Geneva.

14. The Secretary-General further reflected upon the success of the 20 April 2016 special session of the General Assembly, with particular reference to the presence of his Eminence Cardinal Pietro Parolin (Secretary of State of the Holy See), who at the meeting conveyed to the General Assembly the greetings of His Holiness Pope Francis and paid tribute to all the work accomplished by UNIDROIT.

15. The Secretary-General also noted that on 27 April 2016 UNIDROIT had hosted an international conference entitled “creating a favourable legal environment for contract farming”. The conference was organised in collaboration with the Food and Agricultural Organization of the United nations (FAO) and the International Fund for Agricultural Development (IFAD). The Secretary-General reported that during the meeting various member States had explained that the UNIDROIT/FAO/IFAD Legal Guide on Contract Farming had already been used to assist domestic law reform to promote contract farming as a model for inclusive agricultural development. The Secretary-General noted that while the Legal Guide was only adopted in 2015, it had already been used in the Philippines as part of their recent domestic agricultural law reform.

16. The Secretary-General highlighted one final event, held immediately after the Governing Council meeting on 20 May 2016. He explained that UNIDROIT hosted a contract law conference on the relationship between the United Nations Convention on Contracts for the International Sale of Goods4. U NIDROIT 2016 – A.G. (75) 8

(CISG) and the UNIDROIT Principles of International Commercial Contracts. He noted that the conference had over 60 attendees, and that the papers presented at the Conference would be published in an upcoming special edition of the Uniform Law Review.

17. In relation to activities under the Work Programme, the Secretary-General reported on the fourth meeting of the Study Group which had been working to prepare a preliminary draft of a fourth Protocol to the Cape Town Convention on International Interests in Mobile Equipment on Matters specific to Agricultural, Construction and Mining Equipment (the MAC Protocol). He noted that the Study

fourth meeting of the Study Group which had been working to prepare a preliminary draft of a fourth Protocol to the Cape Town Convention on International Interests in Mobile Equipment on Matters specific to Agricultural, Construction and Mining Equipment (the MAC Protocol). He noted that the Study Group had been successful in preparing a preliminary draft text which had then been approved by the Governing Council at its 95th session (Rome, May 2016) for transmission to a Committee of Governmental Experts for further consideration. He further provided that the first session of the Committee of Governmental Experts would be held in Rome in March 2017.

18. In regards to the project in the area of transnational civil procedure, the Secretary-General reported on the progress made under the joint European Law Institute (ELI)/UNIDROIT project for the development of regional rules of European civil procedure. In particular, he highlighted a meeting of the Steering Committee for the project which took place between 21-22 April 2016 in Rome.

19. Transitioning to the work regarding transactions on transnational and connected capital markets, the Secretary-General noted that the development of the UNIDROIT Legislative Guide on Intermediated Securities was progressing well under the guidance of the informal group of experts. He reported that the informal group had held a second meeting in May 2016 and had continued to work out of session and via videoconference to refine the draft Legislative Guide. He noted that the informal group would meet in Rome between 12-13 December 2016 to further revise the draft. He also noted that a fourth meeting of the Committee on Emerging Markets would be convened in the People’s Republic of China in March 2017, at which the adoption of the Legislative Guide would be discussed and hopefully finalised.

20. In relation to the financial implications of these meetings and the other activities undertaken by the Secretariat set out in Annex I of document A.G. (75) 2, the Secretary-General noted that the financial figures were based upon the estimates presented to the Finance Committee at its most recent meeting in September 2016. The Secretary-General then directed the General Assembly’s attention to

by the Secretariat set out in Annex I of document A.G. (75) 2, the Secretary-General noted that the financial figures were based upon the estimates presented to the Finance Committee at its most recent meeting in September 2016. The Secretary-General then directed the General Assembly’s attention to Annex II of the document which provided information on extra budgetary contributions to the Institute. He noted that Institute had carried over approximately 95,000 euros from previous years and had received an additional 36,000 in extra budgetary contributions in 2016. He further stated that extra budgetary contributions had never made up more than 5% of the Institute’s overall budget throughout its history and affirmed that extra budgetary contributions were not spent on legislative activities.

21. The Chairman thanked the Secretary-General for his detailed report on the document and then opened the floor for discussion and questions.

22. A representative of Indonesia congratulated the Chairman for his election, and noted that the Chairman’s experience and leadership would lead to fruitful discussions regarding the Institute’s work.

He then thanked the Secretary-General for the explanation regarding UNIDROIT’s activity in 2016. He noted that Indonesia became a member State of UNIDROIT in 2008. He noted that Indonesia was pleased with the proposed amendments to the UNIDROIT Principles on International Commercial Contracts regarding issues related to long term contracts, and noted that as a party to the Cape Town Convention on International Interests in Mobile Assets, Indonesia had been following the developments regarding the Luxembourg Rail Protocol and future MAC Protocol and had met with the Secretariat regarding Indonesia becoming a party to those Protocols. He congratulated UNIDROIT for the success of the Legal Guide on Contract Farming, and provided that Indonesia had participated in the development of the Legal Guide and had also utilised the final product by distributing it to relevant domestic stakeholders.UNIDROIT 2016 – A.G. (75) 8 5. He reaffirmed Indonesia’s appreciation for the work of the Secretariat, and concluded that the future work by the Institute would bring further benefits to member States.

Legal Guide and had also utilised the final product by distributing it to relevant domestic stakeholders.UNIDROIT 2016 – A.G. (75) 8 5. He reaffirmed Indonesia’s appreciation for the work of the Secretariat, and concluded that the future work by the Institute would bring further benefits to member States.

23. The General Assembly took note, with appreciation, of the Statement regarding the Organisation’s activity in 2016.

Item No. 5: Adoption of the Organisation’s Work Programme for the 2017 – 2019 triennium (A.G. (75) 3 corr.)

24. The Chairman invited the Secretary-General, to present the Organisation’s draft Work Programme for the 2017 – 2019, which was submitted by the Governing Council at the conclusion of its 95th session (Rome, 18-20 May 2016).

25. The Secretary-General explained the rationale and anticipated working methods for the projects contained in the draft Work Programme. The Secretary-General noted that international private law reform projects often took longer than three years, which could make it necessary to carry existing incomplete projects over from one triennial Work Programme to the next. He further noted that while several projects from the 2014-2016 Work Programme were indeed proposed to be continued in the draft 2017-2019 Work Programme, he anticipated that most of those projects would be completed in the next three years and would not need to be transferred to a future Work Programme.

26. The Secretary-General introduced the first item on the draft Work Programme, the implementation of the Luxembourg Rail and Space Protocols to the Cape Town Convention. He noted that the implementation of the Protocols had been a continuous high priority project for the Secretariat which was required to ensure the entry into force of the two instruments. He explained that the instruments had operational mechanisms, being the Supervisory Authority and the Registrar that required establishment following the conclusion of the treaties, which the Secretariat continued to work towards. He concluded that the arrangements for the establishment of the operational mechanisms

which was required to ensure the entry into force of the two instruments. He explained that the instruments had operational mechanisms, being the Supervisory Authority and the Registrar that required establishment following the conclusion of the treaties, which the Secretariat continued to work towards. He concluded that the arrangements for the establishment of the operational mechanisms were much more advanced for the Luxembourg Rail Protocol as compared to the Space Protocol, but that the Secretariat continued to work toward both goals.

27. The Secretary-General then turned to the preparation of additional Protocols of the Cape Town Convention. He reaffirmed that the first session of the Committee of Governmental Experts for the preparation of a draft MAC Protocol would be held in Rome between 20-24 March 2017, and that the documents had already been circulated for that meeting. He noted that additional documents for the project, including an economic analysis for the MAC Protocol, would be circulated in the near future.

He explained that it was anticipated that a Diplomatic Conference to adopt the MAC Protocol could be convened in 2018 after two or three meetings of the Committee of Governmental Experts.

28. The Secretary-General noted the preparation of two additional Protocols to the Cape Town Convention on (i) Ships and maritime transport equipment and (ii) Renewable energy equipment, but had been assigned low priority. In relation to the Maritime Protocol, he noted that there had been some support for the idea, however certain elements of the shipping industry remained opposed to the Protocol. He noted that UNIDROIT would continue consultations in relation to the project. In relation to the Renewable Energy Equipment Protocol, he noted that the project had originated from a proposal from Germany regarding the financing of wind power generation equipment. He noted that additional research by the Secretariat had indicated that such a proposal was too narrow to be economically viable, whereas a potential future Protocol covering high-value renewable energy equipment would be likely to have more success.

29. The Secretary-General explained that under the proposed draft Work Programme the project to formulate European regional rules for transnational civil procedure would be completed as a high

viable, whereas a potential future Protocol covering high-value renewable energy equipment would be likely to have more success.

29. The Secretary-General explained that under the proposed draft Work Programme the project to formulate European regional rules for transnational civil procedure would be completed as a high priority. He noted that the project was being conducted in partnership with the European Law Institute6. U NIDROIT 2016 – A.G. (75) 8

(ELI) and that the project was particularly important given the significant transaction costs and higher credit costs associated with inefficient civil procedure regimes. He noted that he expected the draft rules to be ready for consideration by the Governing Council for adoption in 2018.

30. Turning to new proposals in the draft Work Programme, the Secretary-General introduced the proposal for the preparation of an international guidance document on agricultural land investment contracts as a high priority project. He explained that the proposed project built upon the considerable success of the Legal Guide on Contract Farming, as developed in collaboration with FAO and IFAD. He noted that one consultation meeting for the project had already been completed and that the next step would be to set up a Working Group involving relevant stakeholders to prepare the guidance document.

He anticipated that the Working Group would require four or five meetings and that the project should be able to be completed within the 2017-2019 work cycle.

31. In the field of transnational civil procedure, the Secretary-General noted that following the completion of the European regional rules in 2018, a new proposal regarding principles of effective enforcement had been proposed for the draft Work Programme. The Secretary-General explained that many countries lacked adequate civil enforcement procedures, which meant that in some jurisdictions contract enforcement could take between seven and ten years, which imposed a significant cost on conducting business. He noted that the proposed project would produce best practice principles for effective enforcement.

32. The Secretary-General noted that the draft Work Programme also contained a proposal in relation to reinsurance contracts, which had been submitted by a group of academics from the Universities of Frankfurt, Vienna and Zurich. He noted that the Governing Council had been very

effective enforcement.

32. The Secretary-General noted that the draft Work Programme also contained a proposal in relation to reinsurance contracts, which had been submitted by a group of academics from the Universities of Frankfurt, Vienna and Zurich. He noted that the Governing Council had been very supportive of the project, as the topic of reinsurance contracts was highly technical but of significant economic importance. He explained that the three Universities would fund the project and that UNIDROIT would be a key assisting partner. He noted that a third workshop to develop the principles would be held in March 2017 in Frankfurt which he would attend personally, having already attended the first two workshops. He concluded that the Working Group developing the principles was well balanced and internationally focused, which would contribution to the production of a useful final product.

33. The Secretary-General then explained that the United Nations Commission for International Trade Law (UNCITRAL) had proposed a cooperation project jointly with the Hague Conference on Private International Law (HCCH) and UNIDROIT to prepare a guidance document on existing texts in the area of international contract law and sales law. He noted that the project would not produce a new normative instrument but would prepare further guidance on the existing instruments of the three organisations. He noted that the organisations were currently discussing the working methods for the project, however it was not anticipated that a specific working group of experts would be needed.

34. Finally, the Secretary-General introduced a proposal made by Mexico for UNIDROIT to conduct additional work on private art collections. He explained that the proposal built upon UNIDROIT’s successful work in the cultural property field. He noted that UNIDROIT was continuing to consider the project to identify the private law aspects that fall within the mandate of UNIDROIT.

35. The Secretary-General explained that the other activities of the Institute as noted in the draft Work Programme related to the implementation and promotion of existing instruments or were nonlegislative activities, such as the operation of the library and internship and scholarship programme.

He also highlighted the Depositary function of the Secretariat, which at times required a lot of work

Work Programme related to the implementation and promotion of existing instruments or were nonlegislative activities, such as the operation of the library and internship and scholarship programme. He also highlighted the Depositary function of the Secretariat, which at times required a lot of work due to the complex and technical declarations mechanisms contained in several UNIDROIT treaties.

36. The Secretary-General concluded that the document did not provide cost estimates for the various projects because of the sheer number of projects, however it was expected that all projects would be able to be undertaken within existing resources.UNIDROIT 2016 – A.G. (75) 8 7.

37. The Chairman thanked the Secretary-General for his detailed explanation of the draft Work Programme for the 2017-2019 triennium and then opened the floor for discussion and questions.

38. The representative of Canada congratulated the Secretary-General and the Secretariat for the quality of the work completed in 2016 and for the strong draft Work Programme proposed for the triennium 2017-2019. He noted that the achievements of the Institute were particularly impressive when considering the small size of the Institute. He noted that Canada supported UNIDROIT’s continued activities in the areas of private law and agricultural development, in particular the project to develop guidelines on agricultural investment contracts. He further noted that the draft Legislative Guide on Intermediated Securities was well advanced and it appeared to be ready for finalisation and adoption in the near future. He noted Canada’s interest in the progression of the MAC Protocol project, and emphasised that the private sector should continue to be closely involved in the development of the draft Protocol. The representative of Canada noted that the draft Work Programme included several regional activities. He stated that while regional activities were often more amenable to harmonisation, it was important to balance regional activities with international activities that would be in the interest of all member States. He noted that the draft Work Programme appeared to strike that balance correctly, and Canada was willing to support it on such a basis. The representative of Canada concluded that through collaborative projects and the identification of new areas of activity, UNIDROIT had managed

of all member States. He noted that the draft Work Programme appeared to strike that balance correctly, and Canada was willing to support it on such a basis. The representative of Canada concluded that through collaborative projects and the identification of new areas of activity, UNIDROIT had managed to remain a relevant and dynamic organisation in a changing international climate where many international organisations were facing significant challenges.

39. The representative of Sweden congratulated the Chairman on his appointment, and thanked the previous Chairman for his work in 2016. She thanked the Secretary-General and the Secretariat for their excellent work in 2016, and noted Sweden’s support for the draft Work Programme. She suggested that due to the existing resource constraints, the transnational civil procedure projects could be progressed as a low priority.

40. A representative of the United States congratulated the Chairman on his election. She thanked the Secretariat for its exemplary management of resources and preparation of comprehensive materials for the General Assembly meeting. She noted that the United States strongly endorsed the draft Work Programme, and in particular applauded UNIDROIT’s continued focus of agricultural private law. She noted that the United States was pleased that the Committee of Governmental Experts would commence consideration of the preliminary draft MAC Protocol in March 2017. She stated that the United States believed that the project would have a significant economic impact in developing countries by providing access to vital equipment in the agricultural, construction and mining fields. She encouraged all UNIDROIT member States to attend the March meeting. She noted that due to the significant resources devoted to the MAC Protocol project as well as the implementation of the Luxembourg Rail Protocol and Space Protocol, she suggested that the Maritime Protocol be removed from the draft Work Programme, as domestic stakeholder consultations had not demonstrated any support for the project. She noted the United States’ support for the land investment project which had been assigned a high priority in the draft Work Programme, and that the instrument produced should include model contract provisions that could be used by corporate counsel in organisations that regularly entered into land investment contracts. She suggested that the instrument should also address the development of community trust funds and the recognition of customary land and resource

been assigned a high priority in the draft Work Programme, and that the instrument produced should include model contract provisions that could be used by corporate counsel in organisations that regularly entered into land investment contracts. She suggested that the instrument should also address the development of community trust funds and the recognition of customary land and resource rights. She noted that the Legislative Guide on Intermediated Securities should remain consistent with existing instruments such as the UNIDROIT Principles on the Operation of Close-Out Netting Provisions and the Geneva Securities Convention and hoped that the Committee on Emerging Markets could finalise the Legislative Guide in 2017. In relation to Reinsurance Contracts, she noted that the United States did not believe that any outcomes from the project should be included in the Principles on International Commercial Contracts. She concluded that as promotional efforts in recent years had focused on UNIDROIT’s Cultural Property work, promotion efforts in 2017 should focus on the Legal Guide on Contract Farming.8. U NIDROIT 2016 – A.G. (75) 8

41. The Secretary-General reassured the representative of the United States that the Secretariat was well aware