Lloyd's Maritime and Commercial Law Quarterly
Electronic transport documents—a new dawn?
Thomas Krebs *
Bills of lading are still, in the third decade of the twenty-first century, issued in paper form and, to make things worse, are usually issued in sets of three. Sustainability is not the only reason why we need to move to electronic bills of lading: often the cargo will get to the port of discharge before the bill of lading does, causing unnecessary legal problems, practical difficulties and expense. It is therefore welcome that the Law Commission’s Electronic Trade Documents Bill has now been laid before Parliament. This short paper considers the Law Commission Report on which the Bill is based. It argues that the proposed reforms are well overdue and should be implemented as quickly as possible. While the Law Commission clearly anticipates that future electronic bills of lading will be based on blockchain/distributed ledger technology, the paper doubts that a notoriously conservative industry will be easily persuaded to go down this path. Fortunately, the proposals and provisions of the Bill are technology-neutral, so that more traditional and less complex registry-based bills of lading will also qualify under the proposed legislation. These have been around for some time but have suffered from the uncertainty surrounding their legal effectiveness. Any such uncertainty will be removed by the legislation; and it is to be hoped that, in the short to medium term, registry-based systems will enjoy a renaissance.
It has long been a matter of some concern, not to say puzzlement, that international trade still depends, to a considerable extent, on documentation in paper form. Several attempts have been made over the past few decades to bring the industry into the digital age, by way of either intergovernmental harmonisation proposals or industry initiatives. None of these has really come to anything, claims to the contrary on the websites of various operators notwithstanding. This presents not just an environmental problem.1 In commodities markets, where goods are often sold many times over in a string, the necessity of conveying (paper) bills of lading to the ultimate receiver of the goods in time for them to be presented at the port of discharge is often challenging, not to say impossible, particularly if banks are involved in financing the various sales and sub-sales in a string by way of documentary credit. The resulting problems are usually solved by way of release of the goods against an indemnity or by way of release of the (paper) documents by way of a trust receipt. Neither
* Fellow and Tutor in Law, Brasenose College Oxford.
1. The environmental impact of producing millions, if not billions, of transport documents annually, usually in triplicate, is significant and should not be understated.
ELECTRONIC TRANSPORT DOCUMENTS—A NEW DAWN?
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