I. Brief Introduction of UNIDROIT
The international Institute for the Unification of Private Law, also known as UNIDROIT, set up in 1926 as an auxiliary organ of the League of Nations; the Institute was, following the demise of the League, re-established in 1940 on the basis of a multilateral agreement, the UNIDROIT Statute. Its seat is in Rome, Italy.
UNIDROIT is an independent intergovernmental organization. Its purpose is to study needs and methods for modernizing, harmonizing, and coordinating private international law and in particular commercial law between states, and to draft international Conventions to address the needs. Moreover, UNIDROIT has to prepare gradually for the adoption by the various states of Uniform rules of private law such as preparing draft of law and conventions with the object of establishing uniform internal law, preparing draft of agreement with a view of facilitating international relations in the field of private law, undertaking studies in comparative private law, taking an interest in project already undertaken in any of these fields by other institution with which it may maintain relations as necessary, organizing conferences and publishing works which the institute considers worthy of wide circulation.
What is the organizational structure of Unidroit like? What is the legislative policy of Unidroit? What are the achievements of Unidroit? Does Unidroit play important role in International law?
II. Membership of UNIDROIT
Unidroit member States are drawn from the five continents and represent a variety of different legal, economic and political systems as well as different cultural backgrounds. In order to be a Unidroit member, states have to accede to the Unidroit Statute.
Moreover, the obligation of member states is to pay the premise to support the yearly expenditure relating to the operation and maintenance of the Institute. In particular, the ordinary basic contribution of the Italian Government, the promoter of the Institute, as approved by the Italian Parliament, which that Government declares to be set, as from 1985, at 300 million Italian lire per annum, a figure which may be revised at the end of each period of three years by the law approving the budget of the Italian State, as well as the ordinary annual contributions of the other participating Governments.
Nowadays, there are 61 member states such as Argentina, Austria, Australia, Belgium, Bolivia, Bulgaria, Brazil, Canada, Chile, China, Columbia, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Holy See, Hungary, India, Iran, Iraq, Ireland, Israel, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, Mexico, The Netherlands, Nicaragua, Nigeria, Norway, Pakistan, Paraguay, Poland, Portugal, Republic of Korea, Republic of Serbia, Romania, Russian Federation, San Marino, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Tunisia, Turkey, United Kingdom of Great Britain and Northern Ireland, The United States of America, Uruguay and Venezuela.
III. Organizational Structure of UNIDROIT
Unidroit structured is categorized into six organs, a General Assembly, A president, a Governing Council, a Permanent Committee, an Administrative Tribunal, and a Secretariat. However, the main three-tier organs that play mighty crucial role in UNIDROIT operation are a Secretariat, a Governing Council and a General Assembly.
1. General Assembly
The General Assembly is the ultimate decision making organ of Unidroit. The General Assembly consists of one representative from each of the participating government. The diplomatic representative or persons deputed by the participating member shall accredit to the Italian Government.
The Assembly should be convened in Rome by the president at least once a year to approve the annual accounts of income and expenditure and the budget in ordinary session. The general Assembly has to approve the work program of the Institute on the basis of a proposal by the Governing Council and, in appropriate cases pursuant to paragraph 4 of Article 16, revise by a majority of two thirds of the Members present and voting the resolutions adopted in accordance with paragraph 3 of the said Article 16.
The member of Unidroit is classified into different categories base on the yearly contribution of each country. The classification will be determined by a resolution through 2/3 vote of General Assembly. Also, the classification is concerning with the national income of the country.
Nonetheless, the classification of the member will be revised every 3 years by further resolution. The resolution of the General Assembly adopted in accordance with the classification shall be notified to each participating government by the Italian government.
During a period of one year following the notification, each participating Government may put forward objections against resolutions concerning its classification for consideration at the next session of the General Assembly. The Assembly shall give its decision by means of a resolution, adopted by a majority of two thirds of the Members present and voting, which shall be notified by the Italian Government to the participating Government concerned. The Latter Government shall, however, have the option of withdrawing from membership of the Institute.
The participating government that is arrear in payment the premise more than 2 years, will lose the right to vote in the General Assembly owing to the premise is very important financial support and necessary to operate the work within the organization.
Institute establish a Working Capital Fund in purpose of which is to meet current expenditure, pending the receipt of the contribution payable by the participating government, and to meet unforeseen expenditure. Furthermore, it must deem with Unidroit regulation, and adopted by 2/3 majority vote by the general assembly.
2. Governing Council
The Governing Council supervises all policy aspects of the means by which the Institute’s statutory objectives are to be attained and in particular the Secretariat’s carrying out of the Work Program, the drawing up of which is its responsibility. It is made up of one ex officio member, the President of the Institute, and 25 elected members, typically eminent judges, practitioners, academics and civil servants.
The 25 members are elected, and some may be appointed by the General Assembly, and one other member is chosen from among the judges in office of the International Court of Justice. The president and members of the Governing Council shall hold office for a term of five years which shall be renewable. The president of Governing Council is appointed by the Italian Government In case there is a replacement of membership, a member of Governing Council shall hold office for the remainder of the term of his or her predecessor. The Governing Council shall be convened by the President whenever he or she considers it expedient and in any case at least once a year.
The Governing Council may invite representatives of international institutions or organizations to take part in its meetings, in a consultative capacity, whenever the work of the institute deals with subjects which are the concern of those institutions or organizations.
Any participating Government, as well as any international institutions of an official nature, is entitled to set before the Governing Council proposals for the study of questions relating to the unification, harmonization or coordination of private law. Therefore the Governing Council shall decide any action to be taken on proposals and suggestions made in this way. The Governing Council may refer the study of particular questions to commissions of jurists who have specialized knowledge of those questions. The commissions shall, as far as possible, be presided over by members of the Governing Council. Following the completion of the study of questions in which it has engaged, the Governing Council has to approve any preliminary drafts to be submitted to Governments if appropriate. It shall communicate such drafts to the participating Governments or the institutions or associations which have made proposals or suggestions to it, asking them for their opinion on the expediency and the substance of the provisions. In the light of the answers received, the Governing Council, if appropriate, approves final drafts. It communicates these to the Governments and to the institutions or associations which have made proposals or suggestions to it. The Governing Council shall then consider the steps to be taken to convene a diplomatic Conference to examine the drafts.
3. The Secretariat
The Secretariat is the executive organ of UNIDROIT responsible for the day-to-day carrying out of its Work Program. It is run by a Secretary-General, who is appointed by the Governing Council on the nomination of the President of the Institute. The Secretary-General is assisted by a staff of international civil servants and various ancillary staff.
The Secretariat consists of a Secretary-General appointed by the Governing Council on the nomination of the President, two Deputy Secretaries-General of different nationalities also appointed by the Governing Council, and the officers and employees provided for in the rules governing the administration of the Institute and its internal operations. The Secretary-General and the Deputy Secretaries-General are appointed for a period which shall not exceed five years. They shall be eligible for reappointment. The Secretary-General of the Institute shall be ex officio Secretary of the General Assembly.
The Secretariat welcomes qualified staff from Member States to work or intern who are either required to carry out an internship with an international organization or as part of their university studies or wish to acquire experience within an organization such as UNIDROIT
The official languages are Italian, English, French, German and Spanish.
4. The President
The President is a representative of the institution. Usually, the president is elected by the General Assembly in other international organization, and also the president of Unidroit. The president has no executive power, but the Governing Council. The president has 5 years term.
5. A Permanent Committee
The Permanent Committee shall consist of the President and five members appointed by the Governing Council from among its own members. Members of the Permanent Committee shall hold office for five years and shall be eligible for re-election. The Permanent Committee shall be convened by the President whenever he or she considers it expedient and in any case at least once a year.
6. An Administrative Tribunal
The Administrative Tribunal has jurisdiction to deal with any dispute between the Institute and its officers or employees, or those entitled to claim through them, with particular regard to the interpretation or application of the Staff Regulations. Any dispute arising from contractual relations between the Institute and third parties shall be submitted to the Tribunal, provided that its jurisdiction is expressly recognized by the parties in the contract giving rise to the dispute.
The Tribunal consists of three full members and one substitute, chosen from outside the Institute and preferably of different nationalities. They shall be elected for five years by the General Assembly. Any vacancy on the Tribunal is filled by cooption.
The Tribunal arrives at its decisions, which shall be without appeal, by applying the provisions of the Statute and of the Regulations as well as the general principles of law. It may also decide ex aequo et bono when such power has been given to it by an agreement between the parties. The President of the Tribunal considers that a dispute between the Institute and one of its officers or employees is of very limited importance, he or she may decide it or may entrust the decision to a single judge of the Tribunal by adopting its own rules of procedure.
IV. Legislative Policies
1. Nature of instruments drawn up by UNIDROIT
Unidroit’s basic statutory objective is to prepare modern and where appropriate harmonized uniform rules of private law understood in a broad sense. However, experience has demonstrated the necessity of permitting occasional incursions into public law, especially in areas of law where hard and fast lines of demarcation are difficult to draw or where transactional law and regulatory law are intertwined. Uniform rules prepared by UNIDROIT are concerned with substantive law rules; they will only include uniform conflict of law rules incidentally.
2. Technical approach to harmonization or unification favored by UNIDROIT
Unidroit’s independent status amongst intergovernmental Organizations has enabled it to pursue working methods which have made it a particularly suitable forum for tackling more technical and correspondingly less political issues.
3. Factors determining eligibility of subjects for treatment
New technologies, commercial practices etc. call for new solutions and, where transactions tend to be transnational by their very nature, these should be harmonized, widely acceptable solutions. Generally speaking, the eligibility of a subject for harmonization or even unification will to a large extent be conditional on the perception of States being willing to accept change to their municipal law rules in favor of a new international solution on that subject. Legal and other arguments in favor of harmonization on a subject have accordingly to be weighed carefully against these considerations. Similar considerations will also determine the most appropriate sphere of application to be given to such rules that are whether they should be restricted to truly cross-border situations or relations or extended to cover also purely internal situations or relations.
4. Factors determining choice of instrument to be prepared
The uniform rules drawn up by UNIDROIT have, in keeping with its intergovernmental structure, traditionally tended to take the form of international Conventions, designed to apply automatically in preference to a State’s municipal law upon completion of all the formal requirements of that State’s domestic law for their entry into force. However, the low priority which tends to be accorded by Governments to the implementation of such Conventions and the time it therefore tends to take for them to enter into force have led to the increasing popularity of alternative forms of unification in areas where a binding instrument is not felt to be essential. Such alternatives include model laws which States may take into consideration when drafting domestic legislation on the subject covered or general principles addressed directly to judges, arbitrators and contracting parties who are however left free to decide whether to use them or not. Where the subject is not judged ripe for the drawing up of uniform rules, another alternative consists in the preparation of legal guides, typically on new business techniques, types of transaction or on the framework for the organization of markets both at the domestic and the international level. Generally speaking “hard law” solutions (i.e. Conventions) are needed where rules’ scope transcends the bi-polar relationship underlying ordinary contract law and where third parties’ or public interests are at stake as is the case in the law of property.
V. Working Method
1. Preliminary stage: use of study groups
Once a subject has been entered on Unidroit’s Work Program, the Secretariat, where necessary assisted by experts in the field, will draw up a feasibility study and/or a preliminary comparative law report designed to ascertain the desirability and feasibility of law reform. Where necessary and provided funding is available, an economic impact assessment study is carried out. The report, sometimes including a first rough draft of principles or such uniform rules, will then be laid before the Governing Council which, if satisfied that a case has been made out for taking action, will typically ask the Secretariat to convene a study group, traditionally chaired by a member of the Council, for the preparation of a preliminary draft Convention or one of the alternatives mentioned above. The membership of such study groups, made up of experts sitting in their personal capacity, is a matter for the Secretariat, which seeks to ensure as balanced a representation as possible of the world’s different legal and economic systems and geographic regions.
2. Intergovernmental negotiation stage
A preliminary draft instrument established by a study group will be laid before the Governing Council for approval, and advice as to the most appropriate further steps to be taken. Typically, in the case of a preliminary draft Convention, these will consist in its asking the Secretariat to convene a committee of governmental experts for the finalization of a draft Convention capable of submission for adoption to a diplomatic Conference. In the case of one of the alternatives to a preliminary draft Convention not suitable by virtue of its nature for transmission to a committee of governmental experts, the Council will be called upon to authorize its publication and dissemination by UNIDROIT in the circles for which it has been prepared.
Full participation in UNIDROIT committees of governmental experts is open to representatives of all UNIDROIT member States. The Secretariat may in addition invite such other States as it deems appropriate, notably in view of the subject-matter concerned, and the relevant international Organizations and professional associations to participate as observers. A draft Convention finalized by a committee of governmental experts will then be laid before the Governing Council for approval and advice as to the most appropriate further steps to be taken. Typically, where it judges that the draft Convention reflects a consensus as between the States which have participated in the committee of governmental experts and that it accordingly stands a good chance of adoption at a diplomatic Conference, these steps will consist in its authorization of the draft Convention’s transmission to a diplomatic Conference for adoption as an international Convention. Such a Conference will be convened by one of Unidroit’s member States.
3. Co-operation with other international Organizations
UNIDROIT maintains close ties of co-operation with its sister international Organizations, both intergovernmental and non-governmental, which in many cases take the form of co-operation agreements concluded at inter-Secretariat level.
By reason of its expertise in the international unification of law, UNIDROIT is moreover at times commissioned by such other Organizations to prepare comparative law studies and/or draft Conventions designed to serve as the basis for the preparation and/or finalization of international instruments in those Organizations.
4. Network of correspondents
Unidroit’s ability to obtain up-to-date information on the state of the law in all the various countries is essential to the pursuit of its statutory objectives. This information is sometimes difficult to obtain and UNIDROIT therefore maintains a network of correspondents in both member and non-member States, who are appointed by the Governing Council amongst academic and practicing lawyers.
VI. UNIDROIT Achievements
UNIDROIT has over the years prepared over seventy studies and drafts. Many of these have resulted in international instruments, including the following international Conventions and Model Laws, drawn up by Unidroit and – in the case of Conventions – adopted by a diplomatic Conferences convened by member States of UNIDROIT:
1. 1964 Convention relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods (The Hague);
2. 1964 Convention relating to a Uniform Law on the International Sale of Goods (The Hague);
3. 1970 International Convention on the Travel Contract (Brussels);
4. 1973 Convention providing a Uniform Law on the Form of an International Will (Washington);
5. 1983 Convention on Agency in the International Sale of Goods (Geneva);
6. 1988 UNIDROIT Convention on International Financial Leasing (Ottawa);
7. 1988 UNIDROIT Convention on International Factoring (Ottawa);
8. 1995 UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects (Rome);
9. 2001 Convention on International Interests in Mobile Equipment (Cape Town);
10. 2001 Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment (Cape Town);
11. 2007 Luxembourg Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Railway Rolling Stock (Luxembourg).
UNIDROIT has prepared:
1. Model Franchise Disclosure Law (2002);
2. Principles of International Commercial Contracts (1994; enlarged edition 2004);
3. Principles of Transnational Civil Procedure (in co-operation with ALI) (2004)
Moreover, UNIDROIT has published:
1. Guide to International Master Franchise Arrangements (1998).
Unidroit’s work has also served as the basis for a number of international instruments adopted under the auspices of other international organizations which are already in force. These include:
1. 1954 Convention for the Protection of Cultural Property in Case of War (adopted under the auspices of UNESCO);
2. 1955 European Convention on Establishment (Council of Europe);
3. 1955 Benelux Treaty on Compulsory Insurance against Civil Liability in respect of Motor Vehicles (Council of Europe);
4. 1956 Convention on the Contract for the International Carriage of Goods by Road (CMR) (UN/ECE);
5. 1958 Convention concerning the recognition and enforcement of decisions relating to maintenance obligations towards children (Hague Conference on Private International Law);
6. 1959 European Convention on Compulsory Insurance against Civil Liability in respect of Motor Vehicles (Council of Europe);
7. 1962 European Convention on the Liability of Hotel-keepers concerning the Property of their Guests (Council of Europe);
8. Protocol No. 1 concerning rights in rem in Inland Navigation Vessels and Protocol No. 2 on Attachment and Forced Sale of Inland Navigation Vessels annexed to the 1965 Convention on the Registration of Inland Navigation Vessels (UN/ECE);
9. 1980 United Nations Convention on Contracts for the International Sale of Goods (UNCITRAL);
VII. Conclusion Remark
In conclusion, Unidroit is a unique intergovernmental organization that responsible to prepare draft of law or international convention. Therefore it plays very important role in private international law because it studies the needs and methods to modernize and harmonize the international private sectors, especially international trade. The conventions, protocols and guides serve as a crucial instrument in legal practice. More importantly, the achievements of Unidroit are the wonderful contribution that this organization involves in helping private persons, private companies to settle their disputes. Also, it is a mechanism to boost the progress and development of international trade and commerce prosperously and peacefully. However, Unidroit can only prepare the draft of law or convention, but it has no execution power to enact the law on their own.