The advantages of using electronic equivalents of traditional paper-based documents, particularly marine bills of lading, received special attention during the COVID-19 pandemic, when traders experienced legal problems due to delays in the transmission and presentation of physical documents. Unlike other transport documents, the marine negotiable bill of lading is universally recognised as a ‘document of title’, which provides the holder of the document with ‘constructive’ possession of the goods and the exclusive right to demand their delivery from the carrier in exchange for the original document. As such, it provides traders and banks with independent documentary security and can be traded along a chain of contracts (string sales), enabling the sale of goods in transit. Although global carriers have committed to increasing the use of electronic equivalents over coming years, in most jurisdictions these do not yet benefit form full legal recognition as accorded to traditional paper-based documents. To address this issue, a draft Electronic Trade Documents Bill is currently under consideration in the United Kingdom which is expected to provide an important boost to the use of electronic bills of lading.
At the international level, UNCITRAL is developing a new legal instrument on ‘Negotiable Multimodal Transport Documents’. If, as intended, the new legal instrument would ensure full legal recognition of electronic multimodal transport documents as negotiable documents of title, these could be traded and used for the sale of goods in transit under a string of contracts, similar to negotiable bills of lading, with the buyer bearing the risk of loss of or damage to the goods in transit. Given that no international mandatory liability regime is in force for multimodal transport, it will be important to ensure that a final consignee in any cargo claim would be protected by mandatory minimum standards of carrier liability. This is already the case for claims under negotiable bills of lading that are covered by mandatory cargo liability conventions. However, at present, liability issues are not as part of the UNCITRAL instrument. To help ensure the effectiveness and acceptance of the new legal instrument, all stakeholders are encouraged to actively engage in the ongoing work.
Source: FIATA FOCUS