1.    The origins of the work on [factoring] date back to a decision taken on the basis of a Secretariat memorandum by the UNIDROIT Governing Council at its 53rd session, held in Rome in February 1974, to include in the Work Programme for the triennial period 1975 to 1977 the subject of the assignment of debts in general and more particularly that of factoring contracts. The Council also requested the Secretariat to prepare a preliminary study on such contracts which would permit the Council to take a decision on the order of priority to be accorded to the item with a view to the elaboration of uniform rules.

2.    The Governing Council was seized of a preliminary report submitted by the Secretariat at its 55th session, held in Rome in September 1976, on which occasion it authorised a wider distribution of the report and accompanying questionnaire, especially to practitioners; at its 56th session it decided to set up a restricted group of members of the Governing Council, assisted by one or more experts on factoring, to examine an analysis of the replies to the questionnaire. The detailed conclusions of the group were brought to the attention of the Governing Council at its 57th session, held in Rome in April 1973, and in accordance with the powers conferred upon him by the Council the President of UNIDROIT constituted a study group for the preparation of uniform rules on the factoring contract. The study group held three sessions in Rome, the first on 5 and 6 February 1979, the second from 27 to 29 April 1981 and the third from 19 to 21 April 1982.. At the conclusion of that session the study group adopted the preliminary draft uniform rules on certain aspects of international factoring.

3.    At its 62nd session, held in Rome in May 1983, the Governing Council approved the draft rules and decided to communicate the text of the preliminary draft, together with an explanatory report prepared by the Secretariat, to the Governments of the member States of UNIDROIT, with a request for observations. In the light of the observations received, the Governing Council decided at its 63rd session in May 1984 to set up a committee of governmental experts for the preparation of draft uniform rules on certain aspects of international factoring (hereinafter referred to as “the committee”).

4.    The text of the preliminary draft uniform rules was considered and revised at three sessions of the committee, held in Rome from 22 to 25 April 1985, from 21 to 23 April 1986 and from 22 to 24 April 1987 respectively. At its second and third sessions the committee also considered a set of draft final provisions prepared by the Secretariat. Mr Royston M. Goode chaired the committee throughout, as also the drafting committee which met on the occasion of each session to take account of the amendments made in plenary. In all, 33 member States of UNIDROIT, four non-member States, three intergovernmental organisations and two non-governmental international organisations, as well as three international and three national professional associations took part in the work of the committee.

5.    At the close of its third session, the committee completed its work with the adoption of the text of a draft Convention on international factoring which was now ready for submission to a diplomatic Conference for adoption. At the closing session of the third and final session of the UNIDROIT committee of governmental experts for the preparation of a draft Convention on international financial leasing, which was held immediately after the session of the committee of governmental experts for the preparation of a draft Convention on certain aspects of international factoring, the Canadian representative announced that his Government would host a diplomatic Conference for the adoption of the two draft Conventions.

(Excerpt from document UNIDROIT 1987 – Study LVIII – Doc. 33)

The draft Convention on International Factoring, together with its sister draft Convention on International Financial Leasing, was laid before a diplomatic Conference hosted by the Government of Canada and held in Ottawa from 9 to 28 May 1988.