Raising Confidence in eCommerce: the United Nations Convention on the Use of Electronic Communicatio

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Raising Confidence in e-Commerce the United
Nations Convention on the Use of Electronic
Communications in International Contracts
José Angelo Estrella Faria Senior Legal Officer
UNCITRAL Secretariat Vienna, Austria
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Legal Uncertainty in e-Contracting

• Applicable law uncertain
• Is there a valid contract?
• What are the terms of the contract?
• Choice of law clauses and the conflict between
  country-of-origin and country-of-destination
• Conflicts of jurisdiction
• Where can/should parties file suit?
• Which court can claim jurisdiction?

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UNCITRAL Approach to e-Commerce

• Establishing functional equivalence
• Analyze purposes and functions of paper-based
  requirements (writing, record, signature,
  original) and offer criteria necessary to
  replicate those functions and give electronic
  data the same level of recognition as information
  on paper
• Promoting media and technology neutrality
• Equal treatment of paper-based and electronic
  transactions and of different techniques (EDI,
  e-mail, Internet, telegram, telex, fax)
• Respecting freedom of contract
• Commercial parties free to agree on whether and
  how to use e-commerce techniques and to choose
  security level appropriate for their transactions

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The new UN e-Contracting Convention

• United Nations Convention on the Use of
  Electronic Communications in International
  Contracts
• Adopted by the UN General Assembly on 23
  November 2005 and opened for signature since 16
  January 2006
• Signatory States Central African Republic,
  China, Colombia,  Honduras,  Iran (Islamic
  Republic of), Lebanon, Madagascar,  Montenegro,
  Panama, Paraguay, Philippines, Republic of Korea,
  Russian Federation, Saudi Arabia, Senegal, Sierra
  Leone, Singapore, Sri Lanka.
• States having declared the intention to sign
  Mexico, Spain,United States, 
• (text available at http//www.uncitral.org/pdf/eng
  lish/texts/electcom/ch_X_18.pdf)

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Core provisions of the e-Contracting Convention
Article 1 (Scope of application) Article 2
(Exclusions) Article 6 (Location of the
parties) Article 8 (Legal recognition) Article 9
(Form requirements) Article 10 (Time and place of
dispatch and receipt) Article 11 (Invitations to
make offers) Article 12 (Use of automated message
systems) Article 14 (Error in electronic
communications) Article 20 (Other international
conventions)
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Core provisions of the e-Contracting Convention
Article 8 (Legal recognition) A contract shall
not be denied legal effect, validity or
enforceability solely because it is in the form
of an electronic communication. Article 9
(Form requirements) Legal requirement of written
form is met by an electronic communication if the
information contained therein is accessible so as
to be usable for subsequent reference.
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Core provisions of the e-Contracting Convention
Article 9 (Form requirements) An electronic
communication meets signature requirements
if (a) A method is used to identify the party
and to indicate its intention in respect of the
information and (b) The method is (i) As
reliable as appropriate for the purpose for which
the electronic communication was generated or
communicated, in the light of all the
circumstances, including any relevant agreement
or (ii) Proven in fact, by itself or together
with further evidence, to have identified the
party and indicated its intention in respect of
the information.
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Core provisions of the e-Contracting Convention
Article 9 (Form requirements) Where the law
requires that a communication or a contract
should be made available or retained in its
original form that requirement is met in relation
to an electronic communication if (a) There
exists a reliable assurance as to the integrity
of the information it contains from the time when
it was first generated in its final form, as an
electronic communication or otherwise and (b)
Where it is required that the information it
contains be made available, that information is
capable of being displayed to the person to whom
it is to be made available.
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Core provisions of the e-Contracting Convention

• Article 9 (Form requirements)
• The criteria for assessing integrity shall be
  whether the information has remained complete and
  unaltered, apart from the addition of any
  endorsement and any change that arises in the
  normal course of communication, storage and
  display.
• The standard of reliability required shall be
  assessed in the light of the purpose for which
  the information was generated and in the light of
  all the relevant circumstances.

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Core provisions of the e-Contracting Convention
Article 10 (Time and place of dispatch and
receipt) The time of dispatch of an electronic
communication is (a) when it leaves an
information system under the control of the
originator or of the party who sent it on behalf
of the originator or, (b) if the electronic
communication has not left an information system
under the control of the originator or of the
party who sent it on behalf of the originator,
the time when the electronic communication is
received.
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Core provisions of the e-Contracting Convention

• Article 10 (Time and place of dispatch and
  receipt)
• The time of receipt of an electronic
  communication is the time when it becomes capable
  of being retrieved by the addressee at an
  electronic address designated by the addressee.
• The time of receipt of an electronic
  communication at another electronic address of
  the addressee is the time when it becomes capable
  of being retrieved by the addressee at that
  address and the addressee becomes aware that the
  electronic communication has been sent to that
  address.
• An electronic communication is presumed to be
  capable of being retrieved by the addressee when
  it reaches the addressees electronic address.

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Core provisions of the e-Contracting Convention
Article 10 (Time and place of dispatch and
receipt) An electronic communication is deemed
to be dispatched at the place where the
originator has its place of business and is
deemed to be received at the place where the
addressee has its place of business. The receipt
rules apply notwithstanding that the place where
the information system supporting an electronic
address is located may be different from the
place where the electronic communication is
deemed to be received under the Convention.
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Core provisions of the e-Contracting Convention

• Article 20 (Other international conventions)
• International conventions expressly covered
• Convention on the Recognition and Enforcement of
  Foreign Arbitral Awards (New York, 10 June
  1958)Convention on the Limitation Period in the
  International Sale of Goods (New York, 14 June
  1974) and Protocol thereto (Vienna, 11 April
  1980)
• United Nations Convention on Contracts for the
  International Sale of Goods (Vienna, 11 April
  1980)
• United Nations Convention on the Liability of
  Operators of Transport Terminals in International
  Trade (Vienna, 19 April 1991)
• United Nations Convention on Independent
  Guarantees and Stand-by Letters of Credit (New
  York, 11 December 1995)
• United Nations Convention on the Assignment of
  Receivables in International Trade (New York, 12
  December 2001).

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Electronic Communications and Choice of Court
Council Regulation (EC) No 44/2001 of 22 December
2000 on jurisdiction and the recognition and
enforcement of judgments in civil and commercial
matters Article 23 an agreement conferring
jurisdiction shall be either (a) in writing or
evidenced in writing or (b) in a form which
accords with practices which the parties have
established between themselves or (c) in
international trade or commerce, in a form which
accords with a usage of which the parties are or
ought to have been aware and which in such trade
or commerce is widely known to, and regularly
observed by, parties to contracts of the type
involved in the particular trade or commerce
concerned. 2. Any communication by electronic
means which provides a durable record of the
agreement shall be equivalent to "writing".
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Electronic Communications and Arbitration
Recommendation regarding the interpretation of
article II, paragraph 2, and article VII,
paragraph 1, of the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards (New
York, 10 June 1958), adopted by UNCITRAL on 7
July 2006, at its 39th session. Recommends
that article II, paragraph 2, of the Convention
on the Recognition and Enforcement of Foreign
Arbitral Awards, done in New York, 10 June 1958,
be applied recognizing that the circumstances
described therein are not exhaustive
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