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Significance of UNCITRAL Texts in the Asia-Pacific Region: CISG and UNCITRAL Texts on Arbitration Kap-You (Kevin) Kim 10 January 2012.

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Presentation on theme: "Significance of UNCITRAL Texts in the Asia-Pacific Region: CISG and UNCITRAL Texts on Arbitration Kap-You (Kevin) Kim 10 January 2012."— Presentation transcript:

1 Significance of UNCITRAL Texts in the Asia-Pacific Region: CISG and UNCITRAL Texts on Arbitration Kap-You (Kevin) Kim 10 January 2012

2 2 Table of Contents 1.United Nations Convention on Contracts for the International Sale of Goods (CISG) 2.UNCITRAL Model Law on International Commercial Arbitration (Arbitration Model Law) 3.Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) 4. UNCITRAL Arbitration Rules CISG and UNCITRAL Texts on Arbitration

3 3 CISG Status of CISG in Asia South Korea (2005) Singapore (1996) China (1988) Japan (2009)

4 4 CISG Scope of Application Direct Application Article 1(1)(a) – When the place of business of each party is in different Contracting States Indirect Application Article 1(1)(b) – When the rules of private international law lead to the application of the law of a Contracting State Declaration to Indirect Application China and Singapore have declared not to be bound by Article 1(1)(b)

5 5 CISG Scope of Application If parties designate Korean law as applicable law CISG supersedes Korean Civil Code and Korean Commercial Code Thus designation of Korean law as substantive law is construed as a designation to be bound by the CISG Accordingly, CISG will apply to the contract

6 6 CISG Movement toward Amendment to Korean Civil Code Commission on Amendment to Civil Code in Ministry of Justice Organized in 2009 to review and amend Korean Civil Code Currently under progress Some scholars urge that Korean Civil Code should assimilate the CISG

7 7 Arbitration Model Law Legislation Based on Model Law in Asia South Korea (1999) Singapore (2010) Japan (2003) Hong Kong (2011) Cambodia (2006) Thailand (2002) Philippines (2004) Malaysia (2005)

8 8 Arbitration Model Law Exception – Mainland China, Indonesia and North Korea China Indonesia North Korea

9 9 Arbitration Model Law Case Study – Arbitration Law of China Not in line with UNCITRAL Model Law Three Particulars are Required for Valid Arbitration Clause: expression of intention to apply for arbitration matters for arbitration a designated arbitral institution Arbitration under UNCITRAL Arbitration Rules not Available in China

10 10 Arbitration Model Law Case Study – Arbitration Law of China Arbitration Clause Above Found to be Invalid by PRC Supreme Peoples Court Because of no explicit designation of an arbitration institution Even Standard ICC Arbitration Clause May be Declared Null and Void Arbitration: ICC Rules, Shanghai, shall apply

11 11 New York Convention New York Convention – the Cornerstone South Korea (1973) Singapore (1986) Japan (1961) Cambodia (1960) Thailand (1960) Philippines (1967) Malaysia (1986) China (1987) Viet Nam (1995) Indonesia (1982)

12 12 New York Convention Rise of Asia-based International Arbitration Statistics of ICC Arbitration ( )

13 13 New York Convention Exception – North Korea North Korea

14 14 UNCITRAL Arbitration Rules Comprehensive Set of Procedural Rules for Arbitral Proceedings Cover all aspects of the arbitral process Provide a model arbitration clause Set out procedural rules regarding the appointment of arbitrators and the conduct of arbitral proceedings Establish rules in relation to the form, effect and interpretation of the award. Widely used in ad hoc arbitrations as well as administered arbitrations

15 15 UNCITRAL Arbitration Rules Korean Investment Treaties Incorporation of the Rules into FTAs Provided as an option under FTAs with ASEAN, Chile, India, Peru, Singapore, and the USA Out of 8 FTAs by Korea, 6 FTAs provide the option to arbitrate pursuant to the UNCITRAL Arbitration Rules. Incorporation of the Rules into BITs Many BITs by Korea (e.g., BITs with Japan, Hong Kong, Mexico, Argentina, etc.) provide the option to arbitrate pursuant to the UNCITRAL Arbitration Rules

16 16 UNCITRAL Arbitration Rules Commercial Dispute Resolution with North Korea Agreement on the Procedure of Commercial Dispute Resolution between Parties in South and North Korea (2000) Sets out arbitration as a commercial dispute resolution method Institutional arbitration through South and North Korean Commercial Arbitration Board to be constituted (not constituted yet) Detailed Procedural Rules Pending UNCITRAL Arbitration Rules can be main reference for procedural rules to be agreed between South and North Korea.

17 17 Effective Dispute Resolution South Korea and Effective Commercial Dispute Resolution Doing Business 2012 (World Bank Report) Study by World Bank ranked South Korea as 2 nd highest in Enforcing Contracts

18 18 Effective Dispute Resolution South Korea and Effective Commercial Dispute Resolution Doing Business 2012 (World Bank Report)

19 Thank you!


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