UNCITRAL and International Commercial Arbitration

In one line

UNCITRAL is the General Assembly's law-making body for international trade law, and its Model Law on International Commercial Arbitration is a text States enact as their own, under which the courts stand back, the tribunal rules on its own jurisdiction, and the award may be set aside only on six narrow grounds.

The Commission

The United Nations Commission on International Trade Law was established by the General Assembly in 1966 as a subsidiary organ under article 22 of the Charter, so everything in [UNICEF] about the legal character of such a body applies to it: no constituent treaty, no membership of its own beyond the States the Assembly elects to it, and no power to bind anybody.

Its mandate is the progressive harmonisation and unification of the law of international trade, and it works through four kinds of instrument, which must be kept apart because they bind differently.

A convention. A treaty, binding on States that ratify. The Convention on Contracts for the International Sale of Goods, Vienna 1980, is the great example.

A model law. A text States are invited to enact as their own legislation, with or without modification. It binds nobody as international law; it becomes law only when a legislature passes it. The Model Law on International Commercial Arbitration is the leading instance, and the Model Law on Electronic Commerce another.

Rules. Procedural rules the parties adopt by contract, principally the UNCITRAL Arbitration Rules. These bind because the parties agreed to them, not because any State enacted them.

Legislative guides and notes, which are advice.

Why a model law and not a convention. A convention on arbitral procedure would have to be negotiated to the last comma and then ratified, and each State would enter reservations. A model law lets each legislature adopt the text in its own statutory language and its own drafting conventions, and produces convergence without the treaty machinery. The cost is that no two enactments are identical, so a lawyer must always read the enacting State's Act and not the Model Law alone.

The Model Law: scope

Article 1(1). The Law applies to international commercial arbitration, subject to any agreement in force between the enacting State and any other State.

Article 1(2), the territorial principle. The provisions apply only if the place of arbitration is in the territory of this State, except articles 8, 9, 17 H, 17 I, 17 J, 35 and 36. Those excepted articles concern referring parties to arbitration, court-ordered interim measures, and the recognition and enforcement of awards, and they must operate whatever the seat, because their whole purpose is to support an arbitration held elsewhere.

Article 1(3), when an arbitration is international. If the parties have their places of business in different States at the time the agreement was concluded; or if one of the following is outside the State in which the parties have their places of business, namely the place of arbitration as determined in or under the agreement, or any place where a substantial part of the obligations is to be performed or the place with which the subject-matter is most closely connected; or if the parties have expressly agreed that the subject matter relates to more than one country.