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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Table of ContentsTable 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

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CISGCISG

Status of CISG in Asia

South Korea (2005)

Singapore (1996)

China (1988)

Japan (2009)

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CISGCISG

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)

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CISGCISG

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

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CISGCISG

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

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Arbitration Model LawArbitration 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)

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Arbitration Model LawArbitration Model Law

Exception – Mainland China, Indonesia and North Korea

China

Indonesia

North Korea

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Arbitration Model LawArbitration 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

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Arbitration Model LawArbitration Model Law

Case Study – Arbitration Law of China

Arbitration Clause Above Found to be Invalid by PRC Supreme

People’s 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

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New York ConventionNew 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)

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New York ConventionNew York Convention

Rise of Asia-based International Arbitration

Statistics of ICC Arbitration (2004-2010)

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New York ConventionNew York Convention

Exception – North Korea

North Korea

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UNCITRAL Arbitration RulesUNCITRAL Arbitration Rules

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

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UNCITRAL Arbitration RulesUNCITRAL 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

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UNCITRAL Arbitration RulesUNCITRAL 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.

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Effective Dispute ResolutionEffective Dispute Resolution

South Korea and Effective Commercial Dispute Resolution

Doing Business 2012 (World Bank Report) Study by World Bank ranked South Korea as 2nd highest in “Enforcing

Contracts”

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Effective Dispute ResolutionEffective Dispute Resolution

South Korea and Effective Commercial Dispute Resolution

Doing Business 2012 (World Bank Report)

Thank you!