Interview by Amelia Chew & Ng Sock Cheng | Edited by Irene Ng

Interview with Luca Castellani, Secretary of the United Nations Commission on International Trade Law (UNCITRAL) Working Group IV (Electronic Commerce)1

The Emergence Conference 2018, jointly hosted by the UNCITRAL Regional Centre for Asia and the Pacific and the Asian Business Law Institute (ABLI), took place on 25 July 2018 in Singapore.

The conference took stock of emerging global and regional developments relating to the harmonization and convergence of international trade and commercial law, with a focus on their impact on regionalisation, especially for Asia. It provided a platform for experts and scholars to examine the impact of these developments and to consider various areas of political interest for UNCITRAL and ABLI from a regional perspective.

We sat down with for a chat with Luca Castellani, a legal officer in the Secretariat of the UNCITRAL, where he discharges the functions of secretary of UNCITRAL Working Group IV (Electronic Commerce) and promotes the adoption and uniform interpretation of UNCITRAL texts relating to sale of goods and electronic commerce.

What are your views on the discussions held at the Emergence Conference today?

This is the third such conference we’ve had and the first of its kind in Singapore. The goal of this conference is to elicit new views on different aspects of international trade law and international business transaction laws. I find it very interesting and particularly useful that many of the presentations are related to current developments in business and law. These presentations are welcome as they are not mere speculations and have practical application in the real world.

I hope that these discussions will continue and that the proceedings will be published. Ideally, topics which have been fervently researched and discussed will also be further developed and eventually morph into a proposal for UNCITRAL.

What do you think are some of the best practices in e-commerce law right now?

It is very difficult to define best practices. Currently, there may not yet be a consensus on which are the best practices in all fields. While some practices are good for those who choose to implement them, they may not be the best universally. We had very interesting presentations on the different approaches to e-commerce law in China and in the US, and if we were to put the European Union in the picture, you would have yet another position. Overall, one can see differences in practices as well in policy decisions based on different economic, social and political interests.

Image Credit: Asia Business Law Institute (ABLI)

What are the possible challenges in implementing UNCITRAL model laws in the Southeast Asian context?

ASEAN has huge potential and has already made some very wise decisions. For instance, there is a consensus to use UNCITRAL text on electronic commerce to enable the use of electronic transactions, signatures and the like. The challenge here is not only the enactment of UNCITRAL model laws and treaties, but also their implementation. All ASEAN member states, in one way or another, express their support for UNCITRAL texts on electronic commerce. But some of them enact and implement them in a manner which is closer to the original model, while others have made significant changes to that model.

Implementation of a uniform legal text is closely connected to its interpretation. In some cases, more attention is paid to interpreting the text in a uniform manner across jurisdictions. Most of the time, unfortunately, we don’t know how the text is interpreted, because we don’t have the required information, i.e. the case law.

Therefore, the real challenge is ensuring that each country has sufficient capacity to both pass and implement uniform legislation. This may require more attention and action, which would in turn call for better coordinating existing resources and for providing additional ones.

Given that ASEAN is quite a disparate region in terms of law and languages, would this contribute to the problem of implementation of the UNCITRAL laws?

Yes of course, for instance there are civil law systems, common law systems, and countries with and without case reporting. Thus, it is important for international business transactions to have a level of harmonization and convergence. There is always a need to accompany legal convergence in support of economic exchanges in a manner always mindful and respectful of diversity.

Does UNCITRAL’s stand in deep technological advances such as AI and blockchain factor into your consideration of how to make the model laws and recommendations to other countries?

We have recently started looking into some of these issues, in the conference we made a few references to our recent Model Law on Electronic Transferable Records, which is already compatible with the use of distributed ledgers.

There are many emerging issues which are particularly popular, such as artificial intelligence (AI), cross-border data flows, autonomous vehicles, etc. We received a mandate at the latest Commission session in New York to monitor these developments more closely. We promote events on these issues in order to gather input to present to the Commission, to suggest the possibility of future work. Some presentations at the Emergence Conference 2018 provide a good example of the discussions we are interested in.

One topic that is getting ripe for discussion is the topic of smart contracts, which are relevant in every step of the contract lifecycle: conclusion and execution, and especially performance management and monitoring. The Internet of things may provide current and detailed information on contract performance. I believe smart contracts coupled with the right technologies can reduce information costs and optimize contract management, which could be particularly beneficial.

Traditionally, we also give attention to dispute resolution. We heard this morning that it is difficult for small and medium sized enterprises to do conflict prevention, which is related to adequate contract drafting and management. This is often difficult since  they often don’t have the human capacity and access to legal knowledge. Smart contracts could provide specific guidance for conflict prevention, whether the enterprises require a specific solution and so on.

What is the role of a lawyer in the development of smart contracts? Does automating the contract make the lawyer redundant in parts of the contract management process?

There will always be a role for the lawyer. We use labels that are too generic, and no one really knows what a smart contract is. People may be thinking of basic automation, such as having the contract translate itself automatically, which would make it easier for parties from different jurisdictions to conclude contracts regardless of language barriers. Depending on the extent to which a contract can be automated, different levels of monitoring on the part of the lawyer are necessary.

We need to define our common framework so that there is a solid understanding of the issues we face. Then we can understand exactly what can be used to do what. I believe that as we are just beginning, there will be some terminological ambiguity. Hence, while some people may believe that they are discussing similar issues, they may actually be discussing very different levels of automation.

Finally, technology neutrality is very important for UNCITRAL. The underlying assumption is that the implementation of smart contracts will be technology neutral. While we may find certain technologies or methods more effective and reliable, I believe that future discussions should still take place in a technology neutral environment.

1 The views expressed herein are those of the author and do not necessarily reflect the views of the United Nations.

(Featured Image Credit: Asia Business Law Institute)