UNIDROIT - Report General Assambly 2018

EN GENERAL ASSEMBLY UNIDROIT 2018 77th session A.G. (77) 9

Rome, 6 December 2018 Original: English/French December 2018

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

Item No. 1: Opening of the session by the Secretary-General and the Chair of the General Assembly 2017-2018 2 Item No. 2: Appointment of the Chair of the General Assembly 2018-2019 2 Item No. 3: Adoption of the agenda (A.G. (77) 1 rev.) 3 Item No. 4: Election of Governing Council members for 2019-2023 (A.G. (77) 2) 3 Item No. 5: Statement regarding the Organisation’s activity in 2018 (A.G. (77) 3) 3 Item No. 6: Final modifications to the Budget and approval of the Accounts for the 2017 financial year (A.G. (77) 4) 5 Item No. 7: Adjustments to the Budget for the 2018 financial year (A.G. (77) 5) 8 Item No. 8: Arrears in contributions of Member States (A.G. (77) 6) 8 Item No. 9: Approval of the draft Budget for 2019 and fixing of the contributions of Member States for that financial year (A.G. (77) 7) 8 Item No. 10: Implementation of the new compensation and social security package offered to UNIDROIT staff (A.G. (77) 8) 10 Item No. 11: Any other business 11 Item No. 4: Election of Governing Council members for 2019-2023 (A.G. (77) 2) – Results 11

LIST OF PARTICIPANTS 13

APPENDIX II 22

Item No. 11: Any other business 11 Item No. 4: Election of Governing Council members for 2019-2023 (A.G. (77) 2) – Results 11

LIST OF PARTICIPANTS 13

APPENDIX II 22

APPENDIX III 232. UNIDROIT 2018 – A.G. (77) 9

Item No. 1: Opening of the session by the Secretary-General and the Chair of the General Assembly 2017-2018

1. The 77th session of the General Assembly of the International Institute for the Unification of Private Law (UNIDROIT) was held at the seat of UNIDROIT on 6 December 2018. A list of participants is included in Appendix I.

2. The Chair of the General Assembly 2017-2018, H.E. Ms Esti Andayani, the Ambassador of Indonesia in Italy, welcomed the participants and proceeded to open the session. She praised the efforts of the President, Secretary-General, Deputy Secretary-General, and the UNIDROIT Secretariat for the completion of another fruitful year at the Institute. She recognised that it was the first General Assembly session for the recently appointed Secretary -General, Professor Ignacio Tirado, whose appointment had been confirmed during the 97th Session of the Governing Council (Rome, 2-4 May 2018). She then invited the Secretary-General to take the floor.

3. The Secretary-General thanked the Chair of the General Assembly 2017-2018 and welcomed the participants to the session. He then expressed his gratitude to the outgoing Secretary-General, Mr José Angelo Estrella Faria, for the remarkable achievements under his tenure, and to the Deputy Secretary-General, Professor Anna Veneziano, who had very ably served as Secretary-General ad interim in the transitional period after the departure of Mr Faria. He also expressed his gratitude to the entire team at the UNIDROIT Secretariat for its work and achievements. He then relayed regards sent to

Secretary-General, Professor Anna Veneziano, who had very ably served as Secretary-General ad interim in the transitional period after the departure of Mr Faria. He also expressed his gratitude to the entire team at the UNIDROIT Secretariat for its work and achievements. He then relayed regards sent to the delegates by the President of UNIDROIT, Professor Alberto Mazzoni, who was unable to attend the session.

4. The Chair of the General Assembly 2017-2018 then thanked all those who were present at the session for the confidence that they had placed in her country in general and in her as an individual with the appointment to serve as Chair of the General Assembly. She further expressed her gratitude towards the Secretariat, and in particular the Deputy Secretary-General, for the work that UNIDROIT had undertaken over the past year. She recalled the progress which had been made on the draft Fourth Protocol to the Cape Town Convention on Matters Specific to Mining, Agricultur al and Construction Equipment (hereinafter MAC Protocol), which was scheduled to be adopted at a Diplomatic Conference in November 2019. She further noted the substantive progress which had been made over the past year towards the development of a future Legal Guide on Agricultural Land Investment Contracts, which was presently being consolidated into a draft text to be circulated in early 2019. She then recognised the positive progress made on institutional matters, including the adoption and implementation of reforms relating to the compensation and social security schemes offered to UNIDROIT staff and the ongoing efforts towards improving UNIDROIT’s Regulations and overall administration. She also recognised the global impact of UNIDROIT’s work, its economic significance and the importance of multilateralism, particularly to growing economies like that of Indonesia. She reiterated Indonesia’s interest to become party to more international instruments to promote further economic growth and to move towards greater economic stability. Lastly, she commended again the work done by UNIDROIT towards the development of international private law and noted the important task ahead of the General Assembly, specifically the election of UNIDROIT Governing Council members for the period 2019-2023.

to move towards greater economic stability. Lastly, she commended again the work done by UNIDROIT towards the development of international private law and noted the important task ahead of the General Assembly, specifically the election of UNIDROIT Governing Council members for the period 2019-2023.

Item No. 2: Appointment of the Chair of the General Assembly 2018-2019

5. The Chair of the General Assembly 2017-2018 invited nominations from the General Assembly for the role of Chair of the General Assembly for 2018-2019.

6. Pursuant to the Chair’s invitation of nominations, the Secretary-General recalled that it was customary within the General Assembly to rotate the position of Chair of the General Assembly among UNIDROIT’s four geographic regions and that, according to this practice, it was now the turn of the European group to nominate a new Chair for the period 2018-2019.UNIDROIT 2018 – A.G. (77) 9 3.

7. Upon nomination by the representative of Italy, the General Assembly, by acclamation, appointed H.E. Mr. Paul Duhr, Ambassador of Luxembourg in Italy, as the Chair of the General Assembly

2018-2019.

8. The Chair of the General Assembly 201 8-2019 thanked all of the representatives for their support and noted that he was honoured to serve in this role. He expressed his gratitude for the opportunity as Luxembourg had been an UNIDROIT Member State since 1951 and had not yet served as Chair of the Gene ral Assembly. He congratulated the Secretary -General for his appointment and thanked the Deputy Secretary-General for all of her work during the transitional period.

9. The Chair then noted that the General Assembly’s tasks at the session were threefold: (a) to look at the activities undertaken by UNIDROIT over the past calendar year; (b) to conduct the election of Governing Council members for 2019-2023; and (c) to review various financial and administrative matters. He added that the upcoming calendar year would be of great significance to UNIDROIT, with

look at the activities undertaken by UNIDROIT over the past calendar year; (b) to conduct the election of Governing Council members for 2019-2023; and (c) to review various financial and administrative matters. He added that the upcoming calendar year would be of great significance to UNIDROIT, with many important matters to be decided , including the finalisation and adoption of the MAC Protocol through a Diplomatic Conference , the circulation of the future Legal Guide on Agricultural Land Investment Contracts, and hopefully the entry into force of the Rail Protocol to the Cape Town Convention. He recalled that the latter was particularly significant to him, noting that the Rail Protocol had been adopted at a Diplomatic Conference held in Luxembourg. He further recalled that the Rail Preparatory Commission would begin its 8th session (Rome, 6 -7 December 2018) just after the conclusion of the General Assembly’s session. Item No. 3: Adoption of the agenda (A.G. (77) 1 rev.)

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

Item No. 4: Election of Governing Council members for 2019-2023 (A.G. (77) 2)

11. The Chair invited the Secretary-General to present the background and procedure for the election of Governing Council members for 2019-2023.

12. The Secretary-General emphasised the importance of the elections , noting the pivotal role played by the Governing Council in determining UNIDROIT’s Work Programme, amongst its many other responsibilities. He then briefly outlined the procedure for the election of members to the Governing Council, which was made up of the President, appointed by Italy as host country of the Institute, and 25 members elected by the General Assembly. The election procedure was set forth in Article 7 of the UNIDROIT Regulations and was described in the Note Verbale of 16 January 2018 that had been sent to Member States. All Member States that were not in arrears for more t han two years in paying their contributions were entitled to vote. The Representatives of Chile, Egypt, and Indonesia were designated

UNIDROIT Regulations and was described in the Note Verbale of 16 January 2018 that had been sent to Member States. All Member States that were not in arrears for more t han two years in paying their contributions were entitled to vote. The Representatives of Chile, Egypt, and Indonesia were designated to serve on the Ballot Committee to count the votes.

13. The Chair noted that once the votes were collected and were being cou nted, the General Assembly would proceed to consider the other items on its agenda.

Item No. 5: Statement regarding the Organisation’s activity in 2018 (A.G. (77) 3)

14. The Chair introduced the item and invited the S ecretary-General to present the statement regarding the Organisation’s activities in 2018.

15. The Secretary-General presented document A.G. (77) 3, noting that it comprised three main sections – (a) legislative activities, (b) implementation and promotion of UNIDROIT’s instruments, and

(c) non-legislative activities – as well as two Annexes.4. UNIDROIT 2018 – A.G. (77) 9

16. With respect to legislative activities, the Secretary-General noted that a detailed description of the amount of resources allocated to each activity could be found in the Annexes. For those activities, he highlighted four areas of legislative work that had seen considerable progress in 2018: (a) secured transactions; (b) capital markets; (c) private law and agricultural development; and (d) transnational civil procedure.

17. Firstly, regarding secured transactions, the Secretary-General drew attention to the work done on the draft MAC Protocol. Significant progress had been made towards the adoption of this instrument, such that the UNIDROIT Governing Council, at its 97th session (Rome, 2–4 May 2018), had approved the convening of a Diplomatic Conference to formally adopt the MAC Protocol. Following that approval, consultations were held with various States interested in hosting the Diplomatic Conference, and the Secretariat accepted an offer from the Republic of South Africa to hold the Diplomatic Conference in

convening of a Diplomatic Conference to formally adopt the MAC Protocol. Following that approval, consultations were held with various States interested in hosting the Diplomatic Conference, and the Secretariat accepted an offer from the Republic of South Africa to hold the Diplomatic Conference in Pretoria on 11–22 November 2019. Those dates were communicated to States in October 2018, with additional Note Verbales inviting States to participate at the Diplomatic Conference anticipated to be sent out in early 2019.

18. The Secretary-General encouraged all States to participate actively and be represented at the Diplomatic Conference, and to partake in the activities leading up to it , as this would result in the adoption of a final instrument with the greatest possible economic benefit. He added that the Secretariat had been assisting States in their consideration of the draft MAC Protocol and its anticipated legal and economic impact. For this purpose, the Secretariat organised a series of domestic, regional and international consultation events, including in Australia, Hungary, Indonesia, Japan, Mexico, Papua New Guinea, Paraguay, South Africa, Spain and the United Kingdom. The Secretary-General specifically noted the event held in Oxford on 11 September 2018, in partnership with the Commercial Law Centre of the University of Oxford’s Harris Manchester College, which related to the MAC Protocol’s scope and benefitted from the participation of 35 Governmental representatives and legal experts from 21 countries. He added that an independently conducted economic assessment of the MAC Protocol had been presented at the 7th Cape Town Convention Academic Project Conference, which was also held in September 2018 in Oxford. That assessment estimated that the MAC Protocol, over a ten-year period, could increase the stock of MAC equipment in developing countries by $90 billion and was predicted to have a positive impact of $23 billion in developing countries and $7 billion in developed countries, for a total annual impact on GDP for UNIDROIT Member States equivalent to $30 billion.

19. The Secretary -General additionally noted the important progress made in 2018 on the implementation of the Luxembourg Rail Protocol as well as the good work conducted concerning the

a total annual impact on GDP for UNIDROIT Member States equivalent to $30 billion.

19. The Secretary -General additionally noted the important progress made in 2018 on the implementation of the Luxembourg Rail Protocol as well as the good work conducted concerning the Space Protocol. For the former specifically, the Rail Preparatory Commission’s Ratification Task Force met several times in 2018, both thr ough teleconferences and in person, to coordinate strategy.

Moreover, Sweden had acceded to the Luxembourg Rail Protocol, and it was anticipated that several other ratifications would also be finalised in the near future. Lastly, the Rail Preparatory Commission’s 8th session (Rome, 6-7 December 2018) was to begin following the General Assembly’s session to strategise further on upcoming work relating to the instrument.

20. Secondly, regarding capital markets, the Secretary-General described the various steps taken by the Secretariat to promote the implementation of the UNIDROIT Legislative Guide on Intermediated Securities, which had been adopted at the Governing Council’s 96th session (Rome, 10-12 May 2017) and launched at the General Assembly’s session last year. Since then, the Secretariat made available supportive and promotional content on its webpage for the Guide and promoted the Guide at various events. Furthermore, the Secretariat was looking towards building on its expertise in this field and, based on a proposal received from the Czech Republic on artificial intelligence, was considering possible work in conjunction with UNCITRAL in the area of digital assets, including distributed ledger technologies and blockchain, which could be part of UNIDROIT’s new Work Programme.

21. Thirdly, regarding private law and agricultural development, the Secretary-General reported that significant progress had been made by the Working Group on Agricultural Land InvestmentUNIDROIT 2018 – A.G. (77) 9 5.

Contracts towards the preparation of a future Legal Guide on such contracts. To advance its work, the Working Group held two in-person meetings, as well as two videoconferences , which collectively

Contracts towards the preparation of a future Legal Guide on such contracts. To advance its work, the Working Group held two in-person meetings, as well as two videoconferences , which collectively resulted in drafts for all the chapters and issues identified in the Working Group’s outline of the future Legal Guide. Those drafts were presently in the process of being consolidated and streamlined by the Secretariat, and it was anticipated that a consolidated draft would be made public in early 2019 for consultations and stakeholder input. Additionally, the Secretariat participated in various events to raise awareness and promote the future Legal Guide, including at the Committee on World Food Security’s annual plenary session ( Rome, 15-19 October 2018), the World Bank’s conferences on Land and Poverty (Washington, 19-23 March 2018) and on Law, Justice and Development ( Washington, 5-9 November 2018), and the International Bar Association’s annual meeting (Rome, 7-12 October 2018).

22. Fourthly, regarding transnational civil procedure, the Secretary -General reported that substantial progress had been made on UNIDROIT’s joint project with the European Law Institute (ELI), specifically towards the development of European civ il procedure rules based on the American Law Institute–UNIDROIT Principles of Transnational Civil Procedure. Among st various developments, the Governing Council, at its 97th session (Rome, 2-4 May 2018), reviewed drafts provided by the Working Groups on Parties and on Judgments. Moreover, the Secretariat also deliberated further upon this project at various conferences, in particular at the ELI General Assembly’s meeting (Riga, 5 -7

September 2018) and at the joint ELI–UNIDROIT open conference held in coordination with the Academy of European Law (Trier, 26-27 November 2018). The Secretary-General added that the Secretariat had considered additional future work in this area, including a possible future project on enforcement, which would address efforts to streamline and improve matters relating to enforcement of the law and the development of standards in that regard.

of European Law (Trier, 26-27 November 2018). The Secretary-General added that the Secretariat had considered additional future work in this area, including a possible future project on enforcement, which would address efforts to streamline and improve matters relating to enforcement of the law and the development of standards in that regard.

23. The Secretary-General then reported on the work done for the implementation of UNIDROIT instruments and non-legislative activities. He noted that the Secretariat had continued to perform its functions as the depository for several instruments, as well as promoting the UNIDROIT Principles of International Commercial Contracts, the UNIDROIT-FAO-IFAD Legal Guide on Contract Farming, and the 1995 Convention on Stolen or Illegally Exported Cultural Objects. He also noted his intention to submit a proposal to develop further and transform the UNIDROIT Library into a cutting-edge research centre – without requiring any additional monetary resources from the budget – in order to allow UNIDROIT to further promote its brand through its researchers and to make the most out of the facilities presently available to the Institute.

24. For further detail, particularly relating to the allocation of resources to various projects, the Secretary-General drew attention to the document’s Annexes. He noted in particular that Annex II provided a report on extra-budgetary contributions in 2018, which had played an imp ortant role in UNIDROIT’s Research Scholarship Programme and the Library’s digitisation project.

25. The General Assembly took note of the Statement regarding the Organisation’s activity in 2018.

Item No. 6: Final modifications to the Budget and approval of the Accounts for the 2017 financial year (A.G. (77) 4)

26. The Chair noted that all matters under Items 6, 7, 8 and 9 of the agenda had been discussed during the Finance Committee ’s 84 th and 85 th sessions (Rome, 15 March and 4 October 2018 respectively), and he thereinafter invited the Chair of the Finance Committee, Mr Benito Jiménez

during the Finance Committee ’s 84 th and 85 th sessions (Rome, 15 March and 4 October 2018 respectively), and he thereinafter invited the Chair of the Finance Committee, Mr Benito Jiménez Sauma, a representative of Mexico, to report on the Finance Committee’s work.

27. The Chair of the Finance Committee recalled that the General Assembly, at its 76th Session (7

December 2017), had appointed the present members of the Finance Committee for a period of three years, and that the Finance Committee had meet twice in 2018. This year marked the first year of the implementation of the compensation and social security reforms applicable to UNIDROIT staff, which had also been approved at the General Assembly’s 76th session. He then reflected on document A.G. (77)6. UNIDROIT 2018 – A.G. (77) 9 4 relating to the Modifications to the Budget and Approval of the Accounts for the 2017 financial year, as well as document A.G. (77) 5 on the Adjustments to the Budget for 2018. He noted that the Finance Committee had reviewed all the comments relating to those modifications and adjustments and had recommended that the General Assembly approve those documents.

28. The Chair of the Finance Committee then drew the General Assembly’s attention to the surplus of roughly 83,000€ from the 2017 financial year. He recalled that, in accordance with Article 38(4) of the UNIDROIT Regulations, the Secretary-General had made proposals to the Finance Committee regarding the use of the surplus, including to support activities related to : (a) finalisation of key instruments; (b) preparation of the new Work Programme; (c) expansion of UNIDROIT’s membership; and (d) implementation of the compensation and social security reforms and possible next steps in this regard. He further recalled that the Finance Committee had reviewed his proposals and authorised the Secretariat to use the surplus for those activities, to the extent necessary and subject to ongoing reporting to the Finance Committee.

29. The Chair of the Finance Committee also noted that the Finance Committee had reviewed

regard. He further recalled that the Finance Committee had reviewed his proposals and authorised the Secretariat to use the surplus for those activities, to the extent necessary and subject to ongoing reporting to the Finance Committee.

29. The Chair of the Finance Committee also noted that the Finance Committee had reviewed documents relating to extra-budgetary contributions, as well as the status of arrears of various Member States. On the arrears in particular, he noted that it was hoped that Member States with more than two years of arrears would be encouraged both to resolve those arrears in order to be able to vote on matters such as the election of Governing Council members and, more generally, to be more active in the Institute’s activities, in particular in the new Work Programme’s formulation. In this regard, it was recommended that the Secretariat reach out to Member States.

30. With respect to the draft Budget for the 2019 financial year, the Chair of the Finance Committee welcomed the Secretariat’s proposal, as had been the case in the preceding years, of a zero-growth budget. It was additionally noted that, as the new UN scale of assessments for 2019-2021 was not yet available, the Finance Committee had recommended that the Budget be based on UNIDROIT’s current Contributions Chart for one more year, with UNIDROIT’s new Contributions Chart, which would be based on the UN scale of assessments for 2019-2021, coming into effect in 2020.

31. With respect to the compensation and social security reforms and the possible next steps in this regard, the Chair of the Finance Committee reported that the Secretariat had presented an update to the Finance Committee on this matter, which had been duly noted. Because a few reservations relating to the compensation reforms remained and the social security reforms were still being implemented, the Finance Committee would continue to monitor those reforms and would report to the General Assembly as necessary. With respect to future reforms, the Finance Committee recommended further development of job descriptions for UNIDROIT staff, as well as a review of the UNIDROIT

implemented, the Finance Committee would continue to monitor those reforms and would report to the General Assembly as necessary. With respect to future reforms, the Finance Committee recommended further development of job descriptions for UNIDROIT staff, as well as a review of the UNIDROIT Regulations. Lastly, he concluded by noting the Finance Committee’s important oversight role regarding financial matters and thanked all of his fellow colleagues on the Finance Committee for their efforts.

32. The Chair thanked the Chair of the Finance Committee and then invited the Secretary-General to comment on the final modifications to the Budget and Accounts for the 2017 financial year.

33. The Secretary-General thanked the Chair of the Finance Committee for providing an overview regarding all of the financial and budgetary items on the agenda. Regarding the final modifications for 2017 in particular, the Secretary-General noted that, as a matter of procedure, the Finance Committee had indeed reviewed the Accounts for 2017 during its 84th and 85th sessions respectively. Regarding the surplus of roughly 83,000€ from that year, he noted that it was due to two factors: (a) the highly cost-effective efforts of the Secretariat in carrying out its mandate; and (b) the savings which had resulted as a consequence of the vacancy of the post of Secretary-General for part of 2017. Regarding the use of the surplus, in line with Article 38(4) of the Regulations, he noted that the Secretariat had made several proposals to the Finance Committee, which were approved. Those proposals included:

(a) covering additional travel expenses relating to the promotion of UNIDROIT’s work, particularly for the MAC Protocol and for the evaluation of possible areas of future work for UNIDROIT; (b) supporting effortsUNIDROIT 2018 – A.G. (77) 9 7.

to expand UNIDROIT’s membership, in particular among States that had already benefited from UNIDROIT instruments or expressed an interest in UNIDROIT’s work, such as Peru and Singapore; and (c) providing additional funding as needed to finalise key instruments, specifically the draft MAC Protocol – including

to expand UNIDROIT’s membership, in particular among States that had already benefited from UNIDROIT instruments or expressed an interest in UNIDROIT’s work, such as Peru and Singapore; and (c) providing additional funding as needed to finalise key instruments, specifically the draft MAC Protocol – including possible costs related to the Diplomatic Conference, as well as to advance preparations through consultations and informal expert meetings in order to ensure a successful Conference – and the future Legal Guide on Agricultural Land I nvestment Contracts; and (d) supporting, if needed, the implementation of the new social security system and consideration of the possible next steps.

34. The representative of Canada thanked the Secretariat for its prudent management of allocated funds, which had resulted in an overall surplus, despite a shortfall in receipts. She noted that the Working Capital Fund’s balance was 369,506€ at the end of 2017 and inquired if the Fund’s balance remained the same. She further inquired whether that balance was up to the level required by Article 2 of the Rules Governing the Working Capital Fund in the UNIDROIT Regulations, which stipulated that the Fund had to be sufficient to cover two months of ordinary expenditure. She noted that the Rules Governing the Working Capital Fund had been adopted in 1991 and, keeping in mind the usual timing of Member States’ payment of their contributions and the status of arrears , asked whether the two-month requirement was still adequate to ensure continuation of the Institute’s activities. She then noted Canada’s support generally for the use of the surplus, though she recalled the concern that Canada had expressed during the Finance Committee ’s last session that any significant efforts to expand UNIDROIT’s membership should be counterbalanced with the costs associated to those efforts.

She further noted that efforts which did not equate to the financial contributions a new Member State would make should not necessarily be prioritised. She concluded by stating that Canada might not endorse a broad effort to expand UNIDROIT’s membership.

35. The Secretary-General thanked the representative of Canada for her remarks and noted that,

She further noted that efforts which did not equate to the financial contributions a new Member State would make should not necessarily be prioritised. She concluded by stating that Canada might not endorse a broad effort to expand UNIDROIT’s membership.

35. The Secretary-General thanked the representative of Canada for her remarks and noted that, regarding the Working Capital Fund, the Secretariat had conducted calculations based on expenditures and nominal shortfalls due to delays in receipt of contributions. Based on those calculations, the Secretariat found that, for the time being, there was no need to expand the Working Capital Fun d, which continued to offer some leeway in this regard. Regarding expansion of UNIDROIT’s membership, he stated that the purpose of expansion was also to promote UNIDROIT’s instruments, as new Member States were more likely to adopt UNIDROIT’s instruments. As such, the Secretariat agreed with Canada that it was necessary to weigh carefully the benefits of expansion together with the cost s. It was unreasonable, however, to assume that a zero-growth budget would continue to be sufficient in the