Today international trade is still a both difficult and complex matter. One does not even have to be a businessperson anymore to realize that. In this age everyone can browse the internet and with just a few clicks have almost everything delivered right to one’s doorstep from all around the world. Due to this simplicity it is often overlooked that ordering goods from the other side of the globe or even just a few steps beyond the closest border involves many differences and problems that need to be taken care of. But while a small order from a private person causes enough trouble, still far more legal issues arise from trade from businesses to business (B2B) contracts over borders. The reason for this is that every state has its own laws, rules and customs and it needs to be clarified which is to be prioritized and obeyed. As the cross-border trade has grown dramatically during the last decades, it therefore has become essential that organizations fight for unifying the laws and regulations for international trade against. One of the most famous and most important institutions is the International Institute for the Unification of Private Law or UNIDROIT. Its main tasks consist of harmonizing and coordinating international private law. Currently (July 8, 2007) the organization has 61 members, including the majority of the leading industrial nations like the United States, Germany, India and China.
In the following paper I am going to analyze and explain the UNIDROIT and its achievements in detail. Therefore I am going to start with a brief summary of its history and evolvement since its foundation. After this I will concentrate on the goals and objectives the organization has been founded upon. Then I will concentrate on the structure and working principles of it, followed by UNIDROITS certainly most important achievements concerning what they say and what importance they have. Before ending with a brief conclusion of what has been discussed, I will also come to setbacks in the organizations history and structure.
Table of Contents
1. Introduction
2. History
3. Objectives
4. Organization
5. Important Achievements
a. UNIDROIT Principles of International Commercial Contracts
b. Convention on International Interests in Mobile Equipment
6. Criticism and Setbacks
7. Conclusion
8. Sources
Objectives and Topics
This paper aims to analyze the role and contributions of the International Institute for the Unification of Private Law (UNIDROIT) to the harmonization of international trade laws. It examines the organization's history, its functional structure, and its most significant achievements in creating standardized legal instruments.
- Historical evolution and foundational objectives of UNIDROIT.
- Organizational structure and decision-making processes.
- Deep analysis of the UNIDROIT Principles of International Commercial Contracts.
- Evaluation of the Convention on International Interests in Mobile Equipment (Cape Town Treaty).
- Critical assessment of the organization's current challenges and limitations.
Excerpt from the Book
b. Convention on International Interests in Mobile Equipment
The leasing and financing of aircrafts, helicopters and also aircraft engines has always been not only difficult, but also extremely risky as soon as it involved crossing a border. There have been many complaints and initiatives, but they all got stuck at some point. Therefore borrowers had to bear high risks and lessees had to pay high interest rates. But since the Convention on International Interests in Mobile Equipment or Cape Town Treaty as it is commonly called, it is all supposed to change. It all started in 1988 in Canada, when a convention was drafted up concerning all “movable assets” of high value. They did not just concentrate on the equipment the Cape Town Treaty now did, but also referred to ships, satellites and railways. Maybe because of the enormous rage they did not succeed completely, but the initiative was strong enough to get the UNIDROIT involved. Still they failed in the beginning, as not all demands of everyone participating could be satisfied. (Sutton, 2001) (Cape Town Treaty, 2007)
But it all changed in 1996. Both the American Boeing Commercial Airplanes, part of The Boeing Company, and the European Airbus S.A.S, which is a subsidy of the European Aeronautic Defense and Space Company in charge of civilian aircraft manufacturing, got involved. They contacted the International Air Transport Association (IATA), to end this blockade. Surprisingly, the IATA really managed to speed the initiative up again by suggesting using several conventions tailored for the needs of the specific industries. Although the International Civil Aviation Organization, which belongs to the United Nations, tried to hinder this suggestion initially, before trying to make it its own, the movement could not be stopped anymore, as UNIDROIT had the sure and complete support from the two major aircraft manufacturers. (Sutton, 2001)
Summary of Chapters
1. Introduction: Outlines the increasing complexity of cross-border B2B trade and introduces UNIDROIT as a leading institution for legal harmonization.
2. History: Details the origin of UNIDROIT in 1926 under the League of Nations and its transition into an independent international organization.
3. Objectives: Explains the vision of a unified international private law system and the minor objectives used to approach this long-term goal.
4. Organization: Describes the three main organs of UNIDROIT—Secretariat, Governing Council, and General Assembly—and their respective roles in the working process.
5. Important Achievements: Provides an in-depth analysis of the UNIDROIT Principles of International Commercial Contracts and the Cape Town Treaty.
6. Criticism and Setbacks: Addresses the voluntary nature of the rules, the low number of ratifying states, and the limited executive power of the organization.
7. Conclusion: Summarizes the organization's significant contribution to international trade despite the slow pace of legal harmonization.
8. Sources: Lists the academic and institutional references used throughout the paper.
Keywords
UNIDROIT, International Private Law, Trade Harmonization, Commercial Contracts, Cape Town Treaty, Mobile Equipment, Arbitration, Lex Fori, Lex Causae, Globalization, Aviation Working Group, Legal Standardization, Cross-border Trade, International Registry, Intergovernmental Negotiation.
Frequently Asked Questions
What is the primary focus of this paper?
The paper examines how UNIDROIT functions as an international institution dedicated to harmonizing and coordinating private law to facilitate global business.
What are the core areas covered by UNIDROIT?
The core areas include the creation of international conventions and principles that address cross-border B2B contract issues and the financing of high-value mobile assets.
What is the main goal of UNIDROIT?
The overarching goal is to minimize legal differences between nations, eventually working toward a single, universally accepted international private law system.
Which scientific method is utilized in this study?
The paper employs a descriptive and analytical approach, summarizing the organization's structure, objectives, and specific case studies like the Cape Town Treaty.
What topics are discussed in the main part of the work?
The main body focuses on the organizational structure, the specific applications of the UNIDROIT Principles in arbitration, and the development history of the Cape Town Treaty.
Which keywords define this work?
Key terms include UNIDROIT, international trade, legal harmonization, commercial contracts, arbitration, and the Cape Town Treaty.
How does the Cape Town Treaty affect international financing?
It creates a comprehensive framework for rules and laws that protect contract partners in insolvency cases and reduces transaction costs, making aircraft financing less risky.
What is the primary criticism directed at UNIDROIT?
The main criticism is the lack of binding power of its instruments, as they are voluntary, and the relatively slow pace of ratification by member states.
- Quote paper
- Andreas Giese (Author), 2007, UNIDROIT, Munich, GRIN Verlag, https://www.grin.com/document/83080
