Embracing new waves of change: Singapore’s new laws on electronic bills of lading, and a Spanish and UK comparison
This article was co-authored by Yu Qing Tan, Trainee Solicitor, Singapore.
On 1 February 2020, the Singapore government passed the Electronic Transactions (Amendment) Bill in Parliament (the Bill), amending the Electronic Transactions Act (ETA), Bills of Lading Act and Contracts (Rights of Third Parties) Act.
By passing the Bill, Singapore became one of the first countries to enact a legislative framework for Electronic Transferable Records (ETRs) based on the Model Law on Electronic Transferable Records (MLETR) thereby strengthening its status as a maritime and trade hub.
Changes as a result of the Bill
The enactment of the Bill means that:
1 The ETA - which previously specifically excluded application to bills of lading (B/Ls) - will now cover B/Ls.
The Bill legally recognises the creation and use of an electronic bill of lading (eBL), provided that it contains the information that must be contained in a paper B/L, and a reliable method is used to (i) identify it as the authoritative electronic record constituting the ETR, (ii) allow it to be subject to control from its creation until it ceases to have any effect or validity and (iii) retain its integrity.
2 An eBL cannot be denied legal effect, validity or enforceability simply because of its electronic nature or because it was issued or used outside Singapore. It will be legally effective to parties and third parties to the contract.
3 An eBL may be converted into a paper B/L and vice versa without affecting parties’ rights and obligations, where there is a reliable method for the change of medium. To convert a paper B/L into an eBL, the eBL must accurately reproduce all the information contained in the paper B/L and include a statement indicating a change of medium. Once the eBL is issued, the paper B/L will not have any effect or validity, and must be made inoperative.
4 An eBL will be regarded as being:
- In writing, if the information contained in it is accessible so as to be usable for subsequent reference
- Signed, if a reliable method is used to identify the person whose signature is required and indicate that person’s intention in respect of information contained in the eBL.
5 A person may prove possession of an eBL or transfer of possession of an eBL to them if a reliable method is used to (i) establish their exclusive control of the eBL and (ii) identify them as the person in control.
The approach taken by Singapore is similar to that adopted by Spain in 2014, giving effect to eBLs.
In Spain, the Maritime Navigation Act 14/2014, provides that:
- A bill of lading may be issued on an electronic medium when the shipper and carrier have so agreed in writing before loading the goods on board.
- The agreement between shipper and carrier shall determine (i) the system of issue and circulation of the bill; (ii) the system to guarantee the security of the medium and the intangibility of the content; (iii) the means to authenticate the holder of the bill; (iv) the means to record the delivery of the goods; and (v) the means to evidence loss of validity or effectiveness of the bill.
- A bill of lading in paper format may be replaced and nullified by another on a computer medium, with prior written agreement between the legitimate holder of the bill and the carrier.
- An electronic bill of lading shall be subject to the same regime and have the same effects as the conventional bill in paper format.
The position in England and Wales
Without express contractual provisions, English law does not at present either under statute or case law recognise eBLs as a negotiable document of title, having the same legal status as paper B/Ls. Therefore holders cannot rely on The Carriage of Goods by Sea Act 1992 to pursue claims against the carrier unless they use one of the eBL systems approved by the International Group (the IG), which have proven to be effective in transferring rights within a bilateral or multilateral contractual arrangement.
Since 2010 the IG have approved six eBL providers, including Bolero and essDOCS, and more recently added a new generation of providers that rely on blockchain technology to ensure that the eBLs created on their systems are able to perform as a receipt, document of title, and contract of carriage in the same way as the traditional paper form.
Despite a low initial uptake, the use of eBLs in the shipping industry is on the rise as confidence in the platforms continues to grow, and as more countries start to adopt the MLETR as part of their domestic law and there is greater international harmonization of laws, the use of eBLs is likely to grow.
The benefits of eBLs were brought into sharp focus during the COVID-19 pandemic when delays occasioned by difficulties in presenting paper B/Ls have arisen. Utilisation of eBLs is expected to result in:
- Faster transactions
- Reduction of the costs of transportation, trade financing, cargo holding and document processing
- Greater trust among businesses, as fraud risks will be reduced through digital authentication technologies.
As a sign of growing confidence in eBLs, the IG are already providing equal marine liability cover in relation to carriage of cargo under paper B/Ls as for carriage under certain eBL systems. However, the eBL market will need to reassure shipowners and operators that it is ready to mitigate the challenges presented by the continued growth of the associated cyber risks to the industry.