Statement by Mr. Muhammad Rafiuddin Shah, Counsellor Permanent Mission of Pakistan to the United Nations New York Agenda Item 79:The United Nations Commission on International Trade Law (12 October 2009)

Mr. Chairman,

I will take this opportunity to express my delegation’s appreciation for the report of the United Nations Commissions on international Trade Law (UNCITRAL) on its Forty-Second Session: document A/64/17.

Mr. Chairman,

In the backdrop of evolving international trade law practice, the imperative of cross- border cooperation in insolvency cases with debtors with assets in more than one State or business groups with assets in more than one State cannot be ignored. The “compilation of practical experience” with respect to negotiations and cross-border agreements could go a long way in assisting judges, practitioners and experts from the point of view of reference material and international best practices. In that regard, the adoption of the “Practical Guide on Cross-Border Insolvency Cooperation” is a step towards the right direction. The provisions in part III of the Guide on desire on the part of parties to get “court approval of an agreement” is noteworthy. However, the adoption of the Guide by the Commission should not affect compilation of the work on practical experiences with respect to cross-border negotiations and agreements.

Mr. Chairman,

We have noted that Working Group I on Procurement is recommending new provisions and amendments to the 1994 Model Procurement Law on the use of electronic communications in public procurement; electronic reverse auction; abnormally low submissions; and framework agreements.

Addition of new article 8 in place of existing article 9, with a view to providing functional equivalence between paper and non paper based communications is a big leap of faith in context of integrity of electronic communications. A comprehensive regime of safeguards addressing issues related to confidentiality, traceability and integrity must go hand in hand with the question of equivalence. We, however, are against restricting access to procurement on the basis of means of communication, especially when appropriately authenticated by parties.

The question of reverse auction, when the term is defined in the constraints of online live auctions, demands deep scrutiny. The concerns about the factors that could complicate the process and undermine transparency of reverse auctions are real. We fully support automatic re-evaluation of bids when those are revised during the auction and disclosure of sufficient information to all bidders during the auction to ensure that they know the status of their bids. We are looking forward to seeing the Commissions’ future work on the conditions for the use of electronic reverse auction and the relevant procedural rules.

The question of framework agreements or two stage agreements also needs to be dealt with carefully. The framework agreements were not added in the 1994 Model Procurement Law not only due to infrequent use of those agreements at that time but also due to the loopholes linked to the two types of “closed” framework agreements and “open” framework agreements. While the first type of “closed” agreements excluded competition at the second tier, the second type of “closed” framework agreement have difficulties in establishing the basic parameters and specifications. The “open” framework agreements which could be concluded with more than one supplier with the possibility to add even more, though have competition advantage at second stage but also have an inherent element of uncertainty for all parties to a contract. Therefore, we recommend that the conditions for the use of the framework agreements and the questions related to risk to effective competition, risk of collusion between suppliers and the difficulties involved in monitoring the operation of framework agreements must be addressed carefully.

Mr. Chairman,

We appreciate the progress made by the Working Group VI on the Annex to the UNCITRAL legislative guide on secured transactions and hope that solutions can be reached by the working group in its next session on the main issues of (i) interaction between the general security register and the specialized IP registries; (ii) the ordinary course of business exception and its application to IP licenses; and (iii) the choice of law rule for transactions creating a security interests over an IP right. We recognize the importance of the Annex in providing guidance to States as to the adjustments that might be required to avoid inconsistency between secured financing and intellectual property law, but feel it necessary to emphasize at this point that more needs to be done by the secretariat to increase awareness of the legislative guide itself amongst States and other interested parties in the field.

Mr. Chairman,

The objective of clarity and consistency in the international regulation of commerce is critical to establish a uniform commercial law regime and we appreciate the efforts of the Commission towards coordination of activities of international organizations in the field of international trade law.

I thank you Mr. Chairman.