Update from UNCITRAL Working Group II (Dispute Settlement) 79th Session

In February 2024 the UNCITRAL Working Group II met at the United Nations Headquarters in New York to continue the discussion dedicated to technology-related dispute resolution and adjudication.

The discussion originated at the 52nd Session of the UNCITRAL Commission when a proposal was made by the Governments of Israel and Japan to initiate cooperation in the area of transactions related to new technology.

Having made proposals during previous Sessions, the Working Group moved to finalise model clauses and guidance texts in accordance with the deliberations of the 78th Session. Ciarb, within its rights as an UNCITRAL observer attended in person and actively contributed to the deliberations of the 79th Session. Its presence was supported by the members of Ciarb New York Branch, who also attended the Session.

The Group was tasked with finalising and approving the previously heavily scrutinised texts prepared for review by the UNCITRAL Secretariat. While almost universal support was expressed for certain texts, other provisions were discussed more extensively. Proposed new versions of these texts have been prepared and will be reviewed at a later date.

The texts reviewed by the delegates at the 79th Session were:

1) Model clause on highly expedited arbitration and draft annotations

2) Model clause on adjudication and draft annotations

3) Model clause on technical advisors (previously: experts accompanying the tribunal) and draft annotations

4) Model clause on confidentiality and draft annotations

5) Guidance text on confidentiality within the proceedings

6) Guidance text on evidence

7) Introductory text to UNCITRAL Model clauses and guidance texts

While most comments made by delegates and observers related to the clarity, wording and consistency of the documents, there were also substantive discussions, particularly on the interpretation of the meaning of certain clauses in different jurisdictions.

Model clause on highly expedited arbitration and draft annotations

It was highlighted that the text is detailed and comprehensive. However, there were multiple comments on grammar, language and consistency of wording. These specifically included that where clauses reference the UNCITRAL Arbitration Rules, the wording should be the same as in the rules.

It was also discussed, among other things, whether reference to the same wording used in the Rules is necessary. Some delegates pointed out that those who read the document are not always going to be lawyers and have knowledge of its background sources, therefore, it would be preferable to have a more comprehensive wording.

The draft annotations to the clause on the reasoning of the award were also discussed. Some delegates expressed scepticism about non-reasoned awards. However, it was pointed out that where the parties agree, absence of reasoning should affect enforceability. Some also suggested that where both a reasoned award and a speedy dispute resolution process are needed, the reasoning could be issued later (provided the award is issued within the specified timeframe).

Model clause on adjudication

An extensive discussion of the wording of the clause, with deliberation on the terms used. Several comments were made about the appropriateness of the word “adjudicator”, as in some languages this has different meanings.

Some delegates expressed the function and need for a preamble. It was suggested that a footnote with this text would be more suitable. This option was rejected by some delegates given the imperative that the parties understand their commitment, but accepted that the form could be varied.

Numerous comments raised issues of whether the scope for arbitration and adjudication should be specified and/or limited. Some delegates noted that scope is fundamental: The mechanism should not be limited as it will be offered for other industries, for general application, and for different legal systems. However, other delegate, flagged that in some jurisdictions invalidity, for example, is for the courts to decide.

Some jurisdiction-related concerns related to the efficiency and legitimacy of the current wording of paragraph 3 of the clause were also flagged. It was requested that they should be addressed to avoid to non-enforceability and/or annulment.

The concern was discussed in detail and new wording of the relevant part of the clause received general support from the group.

Model clause on technical advisors

Some delegates noted that the clause is intended not just for high-tech disputes, but also for arbitration more generally. As a result, the assertion was that this clause should be broader and include other types of disputes, instead of being limited to technology issues. In response, others asserted that the clause seems clear that it refers to all technical issues, not just technology.

Concerns were also expressed as to the extent of the duty of communication of the technical advisor. It was proposed that a clearer wording should be introduced.

With regard to the clause as a whole, some delegates also pointed out that it is important to make a clear distinction between technical advisors and experts.

More information about the deliberations that took place during the session can be found here.