UNCITRAL’s Working Group III resumes deliberations at UN

UNCITRALÆs Working Group III resumes deliberations at UN    The role of third parties in ocean contracts was the topic of debate Tuesday at the United Nations in New York during a meeting of Working Group III of the UN Commission on International Trade Law (UNCITRAL), which is drafting a new international convention on the carriage of goods.
   The working group's spring session will continue at the UN through April 29, picking up on work done in Vienna in December. The latitude accorded third parties who expressly consent to contract with shippers and carriers split delegates almost evenly, so that the issue was given to a smaller cadre within the working group to formulate language more acceptable to a majority of delegates.
   'If a third party has agreed to enter a contract, why should we require that it must function under other rules' than the eventual convention, one delegate asked.
   Michael Sturley, a member of the U.S. delegation to the working group, said the absence of any mention of third-party contractual consent would leave third parties to fend as they could under the laws of individual nations.
   Later this week, the working group will discuss jurisdiction and arbitration, which have proven to be sensitive and controversial topics for many delegates. 'It is believed that (these) provisions could become an obstacle for wide ratification of the new convention,' the working group said in a memorandum. The dilemma is that rules on jurisdiction 'without corresponding rules on recognition and enforcement may create deadlock situations,' the group noted.
   'The convention as it now stands contains jurisdiction clauses that oblige the shipper or other cargo interests to institute an action in certain courts, thereby limiting the claimant's choice of forum. Usually assets will be in one of these places, but there is no such guarantee. Without a corresponding duty for other state parties to recognize and enforce the judgment made under the convention, it may be impossible for the claimant in practice to actually enforce the judgment,' the group warned.
   A majority of the delegates are said to feel that 'if rules on arbitration were to be included, they should be limited to a statement that such arrangements should be permitted and arbitrators be required to apply the rules of the instrument,' the working group advised. The convention could possibly validate the incorporation of charter party arbitration clauses into bills of lading, but that may be a step further than some participants will tolerate.
   The working group's timetable, assuming its tempo picks up in New York and that momentum carries over to Vienna next fall, calls for the carriage of goods convention to be completed late in 2006.