From 27 June to 15 July 2022, the 55th session of the UNCITRAL Commission (United Nations Commission on International Trade Law) is being held in New York (at the United Nations Headquarters).
Following the observations submitted by governments and international organisations at its 55th session, the Commission has decided to submit the draft Convention on the International Effects of Judicial Sales of Ships, prepared by Working Group VI (Judicial Sales of Ships), to the UN General Assembly for approval, which is likely to happen by the end of the year (previous work discussed here).
It has also been decided to name this text the “United Nations Convention on the International Effects of Judicial Sales of Ships” (or Beijing Convention), authorising the treaty’s signing ceremony to be held in Beijing in 2023 – following this delegation’s offer – at which point the Convention would be open for signature by States wishing to do so. The Convention was originally promoted by the International Maritime Committee (Athens Conference, 2008), with a first text adopted at its Beijing Conference in 2012.
Relevant within the EU States is Article 18.4 (disconnection clause), incorporated at the last moment by the EU, which establishes that the Convention will not affect the application of EU rules in relation to the transmission of a judicial sale notice between EU Member States (because of its possible collision with the Service Regulation2020/1784), or in relation to the jurisdictional rules applicable between Member States.
The final text, consisting of 23 articles and two annexes, is structured as follows:
– A first part dedicated to the purpose of the Convention (Art. 1), definitions (Art. 2) and scope of application of the Instrument (Art. 3).
– A second part is dedicated to procedural issues concerning the notice of the sale to the interested parties (and to the International Registry), in accordance with the procedural rules of the State where the sale takes place (Arts. 4 and 11).
– A third phase regulates the various matters relating to the rights of the buyer and international effects: (a) the certificate of sale (Arts. 5 and 11); (b) the cross-border rights and effects of the judicial sale (Arts. 6 to 8 and Art. 10); and (c) the jurisdiction to avoid and suspend the judicial sale (Art. 9).
The Instrument leaves the “strict” phase of the judicial sale, which is eminently procedural in nature, to the law of the State where the sale takes place by the competent court or authority.
It now remains only to hope that, following its approval by the General Assembly, as many countries as possible will ratify the Convention once it is open for signature. If this Convention finally gains general international acceptance, it will promote a fair balance between the rights of creditors, the ship buyer, the debtor-owner and the financial industry, and will put an end to the undesirable effects of non-recognition of the judicial sale in the subsequent jurisdictions where the ship calls.