MAC Protocol Event: A Summary Report by Mudit Bhandari

The recent MAC Protocol event, co-hosted and promoted by UNCCA in conjunction with UNIDROIT and the International Law Committee of the ACT Law Society, successfully concluded on 29 August.

A report prepared by Mudit Bhandari, UNCCA intern, usefully summarises the event and the key discussions that took place. Please see the report below.

 


 

The ACT Law Society International Lawyers Committee and UNCCA hosted the first Australian national consultation regarding the Mining, Agriculture and Construction (MAC) Protocol to the Cape Town Convention on August 29th, 2018. Three leading experts in the field provided detailed information and discussed potential benefits and costs regarding the implementation of the MAC Protocol in Australia. This report offers a brief overview of each presentation.

William Brydie Watson is a legal officer at the International Institute for the Unification of Private Law (UNIDROIT). Mr Watson specialises in secured transactions, with expertise in the 2001 Cape Town Convention on the International Interests in Mobile Assets. His responsibility is towards the fourth protocol on matters specific to mining, agriculture and construction equipment, in relation to the Cape Town Convention. His presentation looked at the overview of the Convention and its economic advantage.

The Cape Town Convention creates an International Registry system for certain categories of equipment. The Protocol/Convention has a two-tier structure which allows a common core set of rules which are flexibly adapted to that specific market or collateral. The Cape Town Convention and Protocols provide for both debtors and creditors. It creates an opportunity to create an autonomous international interest over the equipment-including security agreements, sale with retention of title and leasing. In this area, the first to file-rule applies as the registered international interest is given priority from time of registration, including against interest in national law, and is enforceable in contracting states.

Furthermore, the MAC Protocol provides for economic benefits. Mr Watson referred to an independent MAC economic assessment that was produced by experienced British economists-part of the preliminary report released at second session of Committee of Governmental Experts in October 2017, through a competitive closed tender process. The report states that the buyers will have more exposed access to credit and borrowing terms will be better. These claims are achieved through lower interest rates, longer loan durations or high loan-to-loan ratios.

Bruce Whittaker is a senior consultant in the Finance team at Ashurst. Mr Whittaker has also been closely involved in the development of the draft MAC Protocol to the Cape Town Convention. Mr Whittaker presented the possible issues that the Cape Town Convention might have with the existing Personal Property Securities Act 2009 (PPSA) that Australia already has. The presentation provides for a possible solution at the end.

The five possible tractions provided by Mr Whittaker are different in their own ways.

First traction, is in relation to how the issues regarding number registry by manufacturers will be handled. To which, a possible solution being that, whilst registering a MAC equipment, more detail be added about the registered equipment, to ensure uniqueness.

Secondly, the PPSA contains priority rules that are more sophisticated, in comparison to The Cape Town Convention, which are more straight forward. It must be considered how the Cape Town Convention priority rules will fit into Australia and its PPSA rules which are more in-depth compared to those in the Convention.

Thirdly, the issue arises, regarding the ‘taking-free rules’. Take-free rules, is where under the circumstances where a buyer of an asset can acquire the product, free of any security interest from the seller who has previous grant over the asset. Overall, the PPSA contains a similar but differing take on this compared to the MAC Protocol. Therefore, there is general friction between the PPSA and the Protocol, that Mr Whittaker points out, being the main concern to the implementation of the Protocol in Australia.

The last two possible areas of friction arise from the financing of inventory and the general complexity of how the MAC Protocol will run alongside the PPSA rules.

It is to be noted that, the UNCITRAL Model Law on Secured Transactions published by the United Nations (2016), which is yet to be adopted-discusses the same concerns that Mr Whittaker has taken into consideration in his presentation.

A partial solution to all these problems is to construct an entry point to the MAC Protocol. This solution will not cover everything, but it can bring about a middle point to solving some of the potential areas of friction.

Ashna Taneja has conducted research at UNCITRAL’s Regional Centre for Asia and the Pacific (UNCITRAL RCAP) in South Korea, as well as UNIDROIT in Rome. The presentation Ms Taneja provided, looked at the benefits that the MAC Sectors will experience in Australia and a glimpse of the costs of implementation that would result from the Protocol.

The MAC industries are relatively strong in Australia. These sectors of the economy have a significant impact on Australian growth itself, as they make up a significant amount of Australia’s output. From 2016-2017 for the Gross Value-Added figures show that-mining took up 6.3%, agriculture, forestry and fishing took up 3% and construction amounted to 7.9%. Amounting to a total of 16.9% of Australia’s Gross Value Added. These figures provide for a significant impact on the Australian economy.

One of the potential benefits is associated with the effective enforcement of securities. Financiers can enforce securities in the event of default or insolvency immediately without referencing domestic rules. This makes it easier and cheaper in terms of regulatory compliance, particularly, for multi-national financiers. Additionally, the MAC Protocol will also provide for lower cost and credit through easier enforcement capabilities for financiers. Consequently, with the adoption of the MAC Protocol, an increase in competition in the finance industry will come about, leading to a decrease in the cost for finance for importers. There will be a signalling effect to businesses in adopting the Convention. Conversely, if Australia does not ratify there are two benefits that will affect Australia. The MAC Protocol will lower costs of enforcement of securities for overseas MAC equipment and, secondly, it will provide for a spill-over effect, which over time will make MAC equipment cheaper to access.

The possible friction with the MAC Protocol and the PPSA will need to be considered as a possible issue at hand. However, overall, Ms Taneja further highlighted that it is essential that Australia promotes this Protocol to its trading partners to maximise economic benefits. For those involved in the MAC industries or financing MAC equipment, it will significantly increase profits for both sides.

Conclusion

The MAC Protocol will create an international electronic registry that will allow creditors to protect their legal interests over high value MAC equipment, regardless of its location. The MAC Protocol provides uniform rules governing the creation, registration and priority of legal interests in MAC equipment, as well as facilitating expeditious and efficient enforcement of remedies in the event of a default or insolvency. Furthermore, a Diplomatic Conference will be held in 2019 where the MAC Protocol will be finalised. UNIDROIT invites Australia to send a delegation to the Diplomatic Conference in 2019 and consider signing and ratifying the MAC Protocol.

ACICA Symposium in Perth, 23 October 2018

UNCCA is glad to promote the Australian Centre for International Commercial Arbitration’s (ACICA) upcoming symposium in Perth on 23 October.

The symposium will explore the key role of the New York Convention in the growth of international trade over the course of 60 years, its significance in terms of enforcement of arbitration agreements and arbitral awards and the important role of the Courts in this process, as well as more recent international developments with respect to the enforcement of settlement agreements.

The line-up of experienced speakers include:

  • Wayne Martin AC QC, former Chief Justice of the Supreme Court of Western Australia
  • Andrea Gleason, Director, Western Australia State Office, DFAT
  • Simon Davis, Barrister, Francis Burt Chambers
  • Elizabeth Macknay, Partner, Herbert Smith Freehills
  • Dr Sam Luttrell, Partner, Clifford Chance

Drinks and canapes will be served at the conclusion of proceedings.

Date: 23 October 2018
Time: 4:45pm for a 5pm start to 6:30pm following by networking drinks
Venue: Herbert Smith Freehills, Level 36, 250 St Georges Terrace, Perth WA

Registration: by 18 October 2018 – Click Here
For more information, see the invitation flyer or ACICA website.

 

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2018 UN Day Lecture: 60th Anniversary of the NY Convention

We are glad to announce the return of another year of UNCCA’s successful UN Day Lectures.

The following Australian cities will each simultaneously host their own UN Day Lecture this year on 24 October: Brisbane, Melbourne, Sydney, Canberra, Perth, Adelaide, Hobart, and Darwin.

Each lecture is scheduled for a 5pm start and a 6:15pm finish. Attendance is free however registration is required. Please register here: https://www.eventbrite.com.au/e/united-nations-day-lecture-2018-tickets-49461893856. 

Please see the following fliers for further details specific to your relevant city. Please utilise the “scroll pages” option (bottom left of PDF viewer) to arrive at relevant information for your respective city.

We look forward to greeting you at your city of choice.

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The MAC Protocol: Video

Following the conclusion of our first jointly-hosted event with UNIDROIT and the ACT Law Society, UNCCA is proud to release our recording of the seminar:

 

 

UNCITRAL Working Group III: Personal Experience by William Vu

In the unusually chilly 2018 spring of New York City, I attended Working Group III of the United Nations Commission on International Trade Law (‘UNCITRAL’), which focused on Investor-State Dispute Settlement Reform. This was an opportunity offered by the UNCITRAL Coordination Committee for Australia, and I attended as a delegate of LAWASIA, the Law Association for Asia and the Pacific. This report reflects my experience at the Working Group and what I have taken from my week at the UN.

The work of Working Group III

With over 3,000 treaties and billions of dollars of foreign investment flowing into countries, the current regime governing investor-state dispute settlement (‘ISDS’) between investors and countries is a crucial one for the global economy, mixing both domestic foreign investment laws, public international law and politics. Whilst the dispute settlement regime was developed to encourage foreign investment, the regime is up for reform with a long list of concerns from both investors and countries as to its current operation. Working Group III has been mandated to: (i) first, identify and consider concerns regarding ISDS; (ii) second, consider whether reform was desirable in light of any identified concerns; and (iii) third, if the Working Group were to conclude that reform was desirable, develop any relevant solutions to be recommended to the Commission. Working Group III in New York was at phase (i).

Deliberations during the week

With three knocks of a gavel, Working Group III kicked off in the UN Conference Building, with the countries making up UNCITRAL and dozens of observers like ourselves and countries not party to UNCITRAL. The meeting opened up with general remarks from each country, which seemed to be prepared statements from their respective capitals to put on the record their positions. Some were vocal and passionate on their positions, others were more open to debate.

The Working Group then moved to systematically allowing comments on the working paper that listed out the concerns with the ISDS regime. Whilst many delegations simply read out prepared statements which was overwhelmingly similar to other countries, what was particularly interesting and exciting was the interaction between countries as well as between countries and observer organisations. For instance, there was open disagreement between Mauritius and Mexico on the importance of treaty text interpretations, with Mexico calling out the Mauritius delegation on their poor comparison between domestic and international law. Another example was Mauritius’ criticism of an observer organisation’s veiled complaint in having to wait for their time to talk, arguing Working Group III ‘has always been, [and] will always be a government-led process’. The European Union (‘EU’) as an observer also received attention, with some nations questioning their influence on these meetings and whether they were talking on behalf of the EU entirely or particular nations in the EU.

Beyond the meetings

Particularly special and an unexpected benefit were the opportunities outside of the actual Working Group. I was able to attend multiple side events that touched on international investment and its regulatory scheme: an Oxford Union-style debate at New York University School of Law (where I met an Italian Supreme Court judge and connected with NYU Law students), a talk by the Australian Mission to the UN about sustainable development of small island nations, and a lunchtime talk hosted by law firm Foley Hoag and the International Chamber of Commerce discussing the EU’s Multilateral Investment Court Project. I was also able to meet and network with other organisations, ranging from Berkley professors, a Korean delegation and a lobbyist for American businesses.

I was also grateful for the support of Prishika Raj, the lead delegate for LAWASIA who I accompanied. She invited me to side events, introduced me to her colleagues in attendance, and made me feel welcome at a foreign and at times confusing affair.

Lessons from my experience

There is something truly exciting in being witness to the beginnings of reform of a regime so crucial to the participating nations and observer organisations. Attending Working Group III of UNCTIRAL allowed me to get an insider perspective on the workings of the UN and a greater appreciation of international law and international politics. In applying for this opportunity I did not pretend to be an expert on international trade law, but promised to bring curiosity and openness to new experiences – I believe I have exercised both in gaining the most from this ‘fly on the wall’ experience. I am deeply thankful to Dr Alan Davidson for organising this opportunity, Dr Jonathan Bonnitcha for his recommendation and providing research resources, and the UNCITRAL National Co-ordination Committee for Australia for allowing me this wonderful opportunity. I return to Australia with fond memories of my first time in New York City and hope to share this opportunity with other students interested in international trade law like myself.

 

 

William with former UNCCA Secretary, Prishika Raj

 

 

 

Call for Applicants: UNLAWS 2018 Program

UNCCA Law-Student Attendance Working-Group Scheme (UNLAWS)

The UNCITRAL National Coordination Committee for Australia (UNCCA) has established a scheme to allow Australian law students to attend UNCITRAL Working Group meetings as part of a delegation with Australian UNCCA Expert members. Expert members of UNCCA have been attending and contributing to the six Working Groups of UNCITRAL since 2013. Further information about the work of the Working Groups can be found on the UNCITRAL website www.uncitral.org.

The Groups

There are six UNCITRAL Working Groups that typically meet biannually, in New York and Vienna. This provides twelve opportunities per year – (however WG II is not meeting in Vienna this year).  To date more than 40 students have attended Working Group sessions with UNCCA delegates, including candidates from the following universities:

  • Curtin University
  • La Trobe University
  • University of Canberra
  • University of Newcastle
  • University of New South Wales
  • University of Queensland
  • University of Sydney
  • University of Wollongong
  • Victoria University

Invitation

UNCCA invites Australian Law Schools to nominate law students to participate in the Scheme for the upcoming Sessions at the UNCITRAL headquarters in Vienna.  The Convenor of the UNLAWS scheme is Dr Alan Davidson, Education Director of UNCCA. Dr Davidson may be contacted: a.davidson@law.uq.edu.au –  07 33652294

The dates for 2018 are:

  • Working Group I: Micro, Small and Medium-sized Enterprises: 8-12 October 2018, Vienna
  • Working Group II: Dispute Settlement – (Not meeting)
  • Working Group III: Investor-State Dispute Settlement Reform: 29 October-2 November 2018, Vienna
  • Working Group IV: Electronic Commerce: 19-23 November 2018 Vienna (Not available for 2018)
  • Working Group V: Insolvency Law: 10-14 December 2018, Vienna
  • Working Group VI: Security Interests: 17-21 December 2018, Vienna

The aim of the UNLAWS Scheme is to increase awareness of the work of UNCITRAL and to provide students with the unique opportunity to participate in the consideration and formulation of future harmonised legal texts in relation to international trade law.

Participation

Participation in the UNLAWS scheme will be limited to two students per session, based on merit selection.  Not all sessions will be offered.  Students must be self-funded, with individual law schools being encouraged to offer assistance to any students selected. No fee is payable to UNCCA.  UNCCA will arrange for observer status for successful students.

Participation in the Scheme is open to all students enrolled in a Bachelor of Laws (or associated dual program) Master of Laws or postgraduate law program at an Australian Law School.

Students offered participation in the Scheme must fund all private costs (including airfares, accommodation, meals, travel insurance and incidentals – no fee is payable to UNCCA).

 Application Procedure – 2018

Applications must be in writing to the Scheme Convenor, Dr Alan Davidson (by email).

Application Deadline for 2018 Vienna Working Groups: 31 August 2018.

Submission Materials:

  • Curriculum Vitae (1-5 pages).
  • Statement of Interest (2-4 pages). Please indicate any previous courses or experience which relate to the research area of the placement for which you are applying.
  • Academic Record.
  • Letter of recommendation from a permanent member of the Law School including other relevant details for consideration by UNCCA.

Students may indicate preferences for up to three Working Groups. Decisions and offers of participation will be made by the UNCCA Board.

Welfare and safety

The welfare and safety of students involved is the responsibility of the individual participants. The success of the Scheme will depend upon a high standard of behaviour and courtesy being exhibited by participants.

UNCCA assumes no liability for any costs, expenses or liabilities arising from participation in the Scheme or attendance at a Working Group meeting. Successful participants will be required to have all appropriate passport, visa and travel insurance in place before leaving Australia.

Students receiving a position should make independent inquiries about the risks involved in overseas travel. This should include visiting Smartraveller for current information about risks overseas and how to prepare for overseas travel. Students should register with Smartraveller and subscribe to relevant travel advisories before starting their Project (http://smartraveller.gov.au/).

Trade Law Forum – Incheon 2018

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The Trade Law Forum will be held in Incheon, Republic of Korea on 10-12 September 2018. The forum comprises the first Inter-sessional Regional Meeting on Investor-State Dispute Settlement (ISDS) reform and three workshops to discuss recent trends in international trade.

The Inter-sessional Meeting will consist of a one-day Conference on regional perspectives on ISDS reform on 10 September 2018, followed by a half-day Roundtable discussion on 11 September 2018. It will be an open forum for high-level government representatives as well as relevant stakeholders in the Asia-Pacific region to discuss issues being deliberated by Working Group III. We expect participation of high-level government officials responsible for investment policy and investment dispute settlement.

The second part of the Trade Law Forum will consist of three workshops that will provide a forum for discussing recent developments in norm making in the field of international trade law. UNCITRAL’s recent work in the fields of micro, small and medium-sized enterprises (MSMEs), electronic commerce, insolvency and secured transactions will be featured during the workshops.

The Trade Law Forum will provide an opportunity for participants to receive updates on recent developments at UNCITRAL on a number of different topics. Interested attendees should confirm participation by registering for the event at the Register RSVP link or here by no later than 31 August 2018.

All queries may be directed to UNCITRAL-RCAP by email at: uncitral.rcap@un.org or tlforum2018@gmail.com.

Internationalisation of Directors’ Duties (Melbourne, Victoria)

Seminar

The Commercial Bar Association (Insolvency Section) and the UNCITRAL Coordination Committee for Australia cordially invite interested parties to attend its upcoming CPD seminar in Melbourne on 30 July 2018, entitled “The Internationalisation of Directors’ Duties”.

Insolvency law experts Stewart Maiden QC and Dr Neil Hannan will be presenting on the day.

Interested attendants should RSVP by email to rsvp@vicbar.com.au. The event is scheduled to run from 5:15pm to 6:15pm on 30 July 2018 at Neil McPhee Room, Level 1, Owen Dixon Chambers East, Melbourne.

The MAC Protocol: a joint event by UNCCA, UNIDROIT, and the ACT Law Society

The MAC Protocol: Global Impact and Potential Benefits for Australia

MAC Protocol – Australia consultation – Canberra invitation (updated tracked)

 

UNCCA is proud to promote the upcoming MAC Protocol workshop – organised and carried out in partnership with the International Law Committee of the ACT Law Society and the International Institute for the Unification of Private Law (UNIDROIT).

The event is scheduled for Wednesday 29 August at 4:30pm to 6:30pm at the ACT Law Society, 1 Farrell Place, Canberra. The event presents the opportunity for attendees to participate in a consultation workshop on the Protocol to the Cape Town Convention on matters specific to Agricultural, Construction and Mining Equipment (the MAC Protocol).

The MAC Protocol is an international treaty currently under negotiation that will increase global productivity in the mining, agriculture and construction sectors. The treaty will provide an international legal framework for the financing of MAC equipment. Cheaper financing and access to modern MAC equipment will allow parties involved in the mining, agriculture and construction sectors to optimise their productivity and profitability.

This event will bring together representatives from UNIDROIT, domestic legal experts in secured transactions law, government, the private sector, civil society representatives and academia to discuss the legal and economic impact of the MAC Protocol and its potential benefits for Australia.

Interested parties may register directly with the ACT Law Society here. Registrations close Friday 24 August.

 

UNCCA Annual May Seminar – Presentation Videos

UNCCA is proud to share a series of recordings of presentations from its latest Annual May Seminar, which took place on May 24 at the University of Canberra this year.

These recordings are now being made available to the public in order to promote awareness on key topics relevant to the international law landscape. UNCCA further hopes these videos will prove beneficial in providing those that were unable to attend the Seminar with insight into the processes and quality of the annual event. We hope to see you at next year’s Annual May Seminar.

Opening Address by The Hon Justice Neil McKerracher

 

Keynote Address by the Hon Justice Sarah Derrington

 

Panel 1 – A Pre-Launch Discussion of the Joint UNCITRAL, UNIDROIT and HCHH Legal Guide on International Commercial Contracts

 

Panel 2 – Correlations Between the Electronic Commerce Convention, the CISG, and the TTP Agreement

 

Panel 3 – Current Developments in ISDS (with a Special Focus on Working Group III)

 

Panel 4 – Enforcement of International Mediated Settlement Agreements, with a Special Focus on Working Group II’s work on its Preparation of a new Convention and a Revised Model Law

 

Closing Address by Dr Dalma Demeter, Featuring Comments by Tim Castle and Bruce Whittaker