UNCITRAL Working Groups: An Introduction
The Commission has established six working groups to perform the substantive preparatory work on topics within the Commission’s program of work. The Commission meets once a year in July, alternatively in Vienna in New York, for a 2-3 week period. At that meeting it assigns new mandates, and reviews the progress on existing mandates through reports from each of the Working Groups. Each of the working groups is composed of all member States of the Commission.
‘Mandates’ or legal tasks are typically asigned by the Commission to one of the six Working Groups. Each Working Group is usually given one major mandate at any given time, although some mandates may give rise to several related texts, such as a Model Law and an associated Guide to Enactment.
Once a text is completed by a Working Group, meaning complete consensus on all of the terms of the text has been reached, it is then considered in detail by the Commission. Finalisation, meaning adoption, by the Commission gives the text its official status. This is not a formality, even though the Commission will have been involved in prior meetings considering the work on the text as it has been progressed. Certain texts, such as conventions, require approval by the UN General Assembly before they are finalised.
The present mandate of Working Group I is to reduce the legal obstacles that confront micro, small and medium enterprises (MSMEs) throughout their lifecycle. This work commenced in February 2014 and is ongoing. The latest meeting (the Working Group’s 30th session) took place between 12 and 16 March 2018 in New York.
Working Group I is currently focused on the formative stages of MSMEs including registration and incorporation. The objective is to review these matters in accordance with best practice and dealing with relevant legal issues in such a way as to create an enabling legal environment for MSMEs. A number of models and suggestions have been put to the Working Group indicative of the diverse range of approaches currently adopted by the countries actively contributing to the work of this group.
Registration of MSMEs
Processes reflective of good practice in business registration have been considered. While the precise format of the final documents has not been settled, the Working Group is moving toward the development of a legislative guide on key principles in business registration. The current draft of the legislative guide can be found here. The Secretariat’s documentation on key principles of business registration can be found here and here.
Incorporation of MSMEs
Working Group I is looking at the legal issues relevant to simplification of incorporation and the incorporated form of registered entity. At the 23rd session the Working Group began consideration of legal questions that would inform the Secretariat in drafting a text on a simplified entity with limited liability. There has been considerable debate over several meetings as to the form that the text should take. The Secretariat initially produced a draft model law around which to focus discussion of the legal issues surrounding simplification of incorporation. The initial draft model law was quite short containing only 39 Articles, but attracted debate as to whether it was still too complex to serve the needs of small simplified entities. The text of the draft model law is here.
Discussion of the draft model law at the 26th session concluded with a return to debate as to the form that the text should take. Three propositions were considered: a model law, a list of 10 key principles, and a legislative guide. The latter received widest support. The Secretariat has been requested to prepare a legislative guide that reflects the group’s policy discussion to date and the draft model law. The draft legislative guide is expected to be focus of the future meetings of this working group.
Australia does not presently send an official delegation to Working Group I, however past meetings of this working group have been attended by:
- Tim Castle, Barrister and Chair UNCCA
- Diane Chapman, Fellow UNCCA
- Anne Matthew, QUT School of Law
Working Group II has been mandated to commence work on the topic of enforcement of settlement agreements to identify relevant issues and develop possible solutions, including the possible preparation of a convention, model provisions or guidance textsconcerns developments in arbitration and conciliation and dispute settlement.
More recently, Working Group II has focused on drafting a Model Law on International Commercial Conciliation and a draft convention. Revisions and amendments to the Model Law and draft have been put forward for incorporation by the Secretariat at the Working Group’s 67th session in July 2017 in Vienna.
Having completed its work on the draft Model Law and convention (which currently awaits finalisation by UNCITRAL), the Working Group is now considering potential future work, including:
- Possible revision of the UNCITRAL Conciliation Rules (1980) and preparation of notes on mediation;
- The development of tools relevant to expedited arbitration procedure and adjudication; and
- The development of uniform principles on the quality and efficiency of arbitral proceedings.
Working Group III has been entrusted with a broad mandate to work on the possible reform of investor-State dispute settlement (ISDS). In doing so, Working Group III is currently undertaking efforts 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 reform was desirable, develop any relevant solutions to be recommended to the Commission.
The Group is currently operating the first of its three planned stages of action. At the moment, Working Group III is focusing on treaty-based ISDS. It will later consider the possibility of extending the results of its work to contract and investment law based ISDS.
In earlier meetings, Working Group III has considered concerns relevant to arbitration and the outcomes of the process, including (but not limited to):
- the duration and high costs of ISDS proceedings for investors and states, including the allocation of such costs;
- the lack of security for costs; and
- the issue of third-party funding in ISDS.
Transparency has also been identified as a key item for Working Group III’s attention. To that end, the Group’s discussions have focused on the UNCITRAL Transparency Rules and the Mauritius Convention, as both instruments have been impactful in shifting transparency in ISDS. More work has been considered in light of these instruments, namely: (i) the implementation and promotion of existing transparency standards, including by use of soft law instruments to encourage parties and tribunals to apply these standards; and (ii) possible steps to enhance public understanding of the transparency mechanisms already in place.
Working Group III will provide its next report to the Commission in New York in July 2018, at UNCITRAL’s 51st session.