Independent Guarantees and Stand-by Letters of Credit - Working Group Interim Report 2008

Part 2

Interpretation

1.  (1) The following definitions apply in this Act.

“Convention” means the United Nations Convention on Independent Guarantees and Stand-by Letters of Credit set out in the schedule. (Convention)

Comment: This is a standard provision in uniform acts implementing international conventions. For previous examples, reference may be made to subsection 1(2) of the Uniform International Commercial Arbitration Act and subsection 1(2) of the Settlement of International Investments Disputes Act.

“declaration” means a declaration made by Canada under the Convention with respect to (name of province or territory). (déclaration)

Comment: Article 25 of the Convention provides for the deposit of declarations by contracting States:

Article 25 is a standard provision in private law conventions.  It allows federal States to identify by declaration the territorial units to which the convention is to extend.    Canada will make declarations pursuant to Article 25 upon the request of provinces and territories that adopt implementing legislation.

(2) Unless a contrary intention appears, words and expressions used in this Part have the same meaning as in the Convention.

(3) In interpreting this Part and the Convention, recourse may be had to

  • (a) the commentary prepared by the United Nations Commission on International Trade Law with respect to the Convention; and
  • (b) the Report of the United Nations Commission on International Trade Law on its twenty-eighth session, 2-26 May, 1995, General Assembly Official Records, Fiftieth session, Supplement No. 17 (A/50/17).

Comment: The supplementary interpretive sources listed in paragraph (3) conform to the interpretive sources sanctioned by Article 32 of the Vienna Convention on the Law of Treaties, Can. T.S. 1980 No. 37.  The object of permitting judicial recourse to these sources is reflected in the observation of Justice La Forest in Thomson v. Thomson, [1994] 3 S.C.R. 551, at pp. 577-578, that “It would be odd if in construing an international treaty to which the legislature has attempted to give effect, the treaty were not interpreted in the manner in which the state parties to the treaty must have intended.  Not surprisingly, then, the parties made frequent references to this supplementary means of interpreting the Convention, and I shall also do so.  I note that this Court has recently taken this approach to the interpretation of an international treaty in Canada (Attorney General) v. Ward, [1993] 2 S.C.R. 689.”

For an example of a similar provision, reference may be made to subsections 14(1) and (2) of the Uniform International Commercial Arbitration Act.

To facilitate ease of access to the sources referred to in paragraph (3), enacting jurisdictions may wish to include reference to the UNCITRAL web address (http://www.un.org/) from which they may be downloaded in their Gazettes or other appropriate governmental organ.

The list in paragraph (3) is not intended to be exhaustive.  It merely indicates the principal sources to be used in interpreting the Convention.  It is expected that over time other helpful resources will emerge.  In particular, over time UNCITRAL’s Case Law on UNCITRAL Texts (CLOUT) will provide a useful source of the evolving jurisprudence on the Convention from the courts in all Contracting States.

Purpose

2. The purpose of this Part is to implement the Convention.

Publication

3. A notice shall be published in (name of publication) of the day on which the Convention comes into force, or a declaration or withdrawal of a declaration takes effect, in (name of province or territory).

Force of law

4. Subject to any declaration that is in force, the Convention has the force of law during the period that it is, by its terms, in force in (name of province or territory).

Comment: Under this Part, the Convention is given the force of law domestically only from the date the Convention comes into force at the international level for Canada in the jurisdictions declared pursuant to Article 25.  That date is (i) the first day of the month following the expiration of one year after the date of deposit of Canada's instrument of accession, pursuant to Article 28(2); or (ii) in the case of a jurisdiction adopting implementing legislation after accession by Canada, the first day of the month following the expiration of six months after the date the declaration extending the application of the Convention to that jurisdiction is received by the depositary, in accordance with Article 25(3).

The ULCC Uniform International Interests in Mobile Equipment Act (Aircraft Equipment) excluded specific (final) provisions from having the force of law.  However, the preferred approach has been to give the force of law to all the provisions of a Convention. This approach eliminates the risk of inadvertently overlooking provisions or omitting substantive provisions.  To the extent that the final provisions of the Convention are not substantive but are binding as to States on an international level, they would produce no legal effect in provinces or territories in any event.

Inconsistent laws

5. If a provision of this Part, or a provision of the Convention that is given the force of law by section 6, is inconsistent with any other Act, the provision prevails over the other Act to the extent of the inconsistency.

Comment: This Part and Convention need to prevail over inconsistent provisions in other Acts to ensure that Canada is in conformity with its international obligations. To avoid internal conflict, enacting jurisdictions should ensure that if  an equivalent provision appears in other Acts with which this Part or the Convention might potentially be inconsistent, those other Acts should be amended to give precedence to this Part and the Convention.

Coming into force

6. This Act comes into force on (__________).

OR

6. The provisions of this Act come into force on a day or days to be fixed by (__________).

Comment: There is a need to co-ordinate the entry into force of the Convention at the international level, the coming into force of domestic implementing legislation, and giving the Convention force of law.  A provision in the implementing legislation stating that the Act comes into force when the Convention enters into force for enacting jurisdictions is not recommended since the actual date is not transparent on the face of the legislation.  Accordingly, it is recommended that the legislation implementing the Convention state that it comes into force on Royal Assent or similar means.  Enacting jurisdictions will need to communicate with Justice Canada officials to coordinate dates.

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