CMI - SINGAPORE

The working group on E-Commerce was asked in mid-September to review the upcoming draft Outline Instrument to identify the provisions that could have an impact on the ability of the parties to use electronic transport documents. Despite the severe time constraint, it was decided that we would at least give to the national associations, some indications as to the issues upon which they may want to reflect prior to the Singapore meeting. We invite the national associations to indicate to us before January 15, 2001 any additional area of concern they may have.

?Before getting into specific comments, it is important to note that this Outline Instrument is a crucial step in securing a uniform legal framework for electronic transport documents. There is a need to clarify certain functional issues such as the right of control and the transfer of rights in the context of an electronic transaction. These sections should therefore be considered carefully to ensure that they meet their purpose.*

Section 1.8:

Holder means the person who is for the time being in possession of the negotiable transport document and entitled to transfer the rights embodied in such document.

Is the above wording suitable to define the Holder of an electronic transport document

N.B. There is also a more general issue that will need to be discussed. Is the concept of "transport document" in the context of an electronic transaction well understood and sufficiently defined to ensure that it can also encompass a document comprising more than one electronic messages?

Section 1.9:

First Holder means the person who is named as the shipper in, or is identifiable as such from, a negotiable transport document.

Is the expression "is identifiable as such from" suitable in the context of an electronic transaction?.

Section 1.13:

Negotiable transport document means a transport document, such as a bill of lading, that states that the goods are to be delivered to order, to bearer, or to order of any person named in the document, and is not prominently marked "nonnegotiable" or "not negotiable".

The term "prominently marked" may not be suitable since one cannot mark an electronic document.

Section 1.18:

In writing includes, unless otherwise agreed between the parties concerned, information generated, sent, received or stored by electronic, optical or similar means of communication, including, but not limited to, telegram, facsimile, telex, electronic mail or electronic data interchange (EDI), provided the information contained therein is accessible so as to be usable for subsequent reference.

The use of such a definition should be avoided. Ideally, there would be no reference at all to such term. For the moment, however, and until a better expression is found that will encompass the new means of communicating and transacting, it is believed that instead a separate provision (not in the definitions section ) could be added along the following lines:

Where anything in this instrument expressly or by implication requires information to be in writing, or provides for consequences if it is not, such requirement is satisfied, by the transmission, generation or storage of information by electronic, optical or similar means, provided the information contained therein is accessible so as to be usable for subsequent reference. The purpose of this section is to removed paper based obstacles to electronic transactions by adopting the relevant principles of the UNCITRAL Model Law on Electronic Commerce, 1996.

National associations will also wish to reflect upon the issue of "consent". Is consent to an electronic transmission to be presumed unless agreed otherwise or on the contrary, is consent to an electronic transmission to be sought prior to proceeding with such transmission?

Section 5.9.1:

The carrier shall be presumed to have delivered the goods according to their description in the transport document unless notice of loss of, or damage to or in connection of the goods, indicating the general nature of such loss or damage, shall have been given in writing to the carrier before or at the time of the delivery, or, if the loss or damage is not apparent, within three working days after the delivery of the goods. A written notice is not required in respect of loss or damage which is ascertained in a joint inspection of the goods by the carrier and the consignee.

Section 5.9.2:

No compensation shall be payable for economic loss resulting from delay in delivery unless written notice of such loss was given to the carrier within 21 consecutive days following delivery of the goods.

As indicated in the comment under section 1.18 , we should endeavour to find and use from now on another expression better adapted to all means of communications. The term "expressly" would not be suitable if what one seeks is to avoid is the use of verbal notices.

The same comment applies to sections 7.3.1 and 9.3.

Section 7.1.2: Shipper’s Entitlement to a Negotiable Transport Document

The contracting shipper and the contracting carrier may agree that the transport document will be non-negotiable. Such an agreement may be express or implied. In the absence of such an agreement, the [contracting shipper/consignor] is entitled to a negotiable bill of lading or other negotiable transport document.

"Nenegotiable transport document" is a term defined at section 1.13, it clearly includes a negotiable bill of lading. Because an electronic negotiable transport document must have the same value as a paper one, this reference may create an ambiguity. It should be deleted.

N.B. It will be important for the national associations to assess if there are obstacles to the use of electronic transport documents in their law and what additional provision, if any, in the Instrument could facilitate their use .

Section 7.2.1 – Required Contents of the Transport Document

If the carrier issues a transport document, the transport document must:-

(f) be signed by the contracting carrier

It may be advisable to have a separate section to clarify that in the context of an electronic transaction, transport documents may be signed using techniques appropriate to this mode of communication. A provision along the lines of article 7 of the UNCITRAL Model Law on Electronic Commerce could be suitable.

N.B. The final draft of UNCITRAL Model Law on Electronic Signatures will be reviewed and discussed further in the Discussion Paper.

Section 7.2.3 Omission of Required Contents from the Transport Document

(a)?The absence in the transport document of one or more of the particulars referred to in 7.2.1 , or the inaccuracy of one or more of those particulars, does not affect the legal character of the transport document. [The issuer of the transport document is liable to the shipper or other holder of the transport document for any damages that are proximately caused by its breach of 7.2.1.]

It should be made clear that this section does not create liability for omissions resulting from errors in transmission be it in the form of an illegible paper b/l or of a garbled electronic communication.

Section 7.4.2:

Ambiguous Signature on a Transport Document

This title should read "ambiguous identification" to better reflect the content of the proposed provision which does not deal with "signature" per se.

Section 10.1:

(b)?The person in possession of the right of control is entitled to transfer its right to another person. Unless a negotiable transport document is issued, the transferor shall give due notice to the contracting carrier of any such transfer.

This provision shall be carefully considered to determine if any special additional provision will be required to deal with electronic transport document.

Also, is the use of "in the possession of" restrictive, if so, can it be avoided?

Section 10.2:

(b)?When a negotiable transport document is issued , the holder of that document is the exclusive person entitled to exercise the right of control. On request of the carrier, he shall produce the negotiable document to the carrier. In the event that more than one original of the negotiable document is issued, all originals shall so be produced.

This section requires the production of the negotiable document. It clearly needs to be adapted for application to electronic transport documents.

Section 11.3: Transfer of rights

This section is important in the context of electronic transactions. The text to be adopted will need to include suitable wording to enable the endorsement or transfer of electronic transport documents. A provision along the lines of article 17 of the UNCITRAL Model Law ( slightly modified ) may suffice.

Where a right is to be granted to a person and no other person, if the law requires that, in order to effect this, the right or obligation must be conveyed to that person by the transfer or use of, a document in writing that requirement is met if the right or obligation is conveyed by using one or more electronic communications, provided that a method is used which gives assurance that the right or obligation has become that of the intended person and of no other.

Other provisions

It may also be appropriate to include a section to expressly provide that expressions such as "issue" "issuance" "statement" etc. do not imply that something has to be done in writing and should not preclude the use of electronic transport documents.

Finally, it would be useful to have a provision along the lines of article 17(5) of UNCITRAL Model Law on Electronic Commerce:

(…)

17. (5)?"Where one or more data messages are used to effect any action in subparagraphs (f) and (g) of article 16, no paper document used to effect any such action is valid unless the use of data messages has been terminated and replaced by the use of paper documents. A paper document issued in these circumstances shall contain a statement of such termination. The replacement of data messages by paper documents shall not affect the rights or obligations of the parties involved."

* The words or phrases that it is thought would require modification or should be deleted are printed in italics.






		Report of the E-Commerce Working Group The working group on E-Commerce was asked in mid-September to review the upcoming draft Outline Instrument to identify the provisions that could have an impact on the ability of the parties to use electronic transport documents. Despite the severe time constraint, it was decided that we would at least give to the national associations, some indications as to the issues upon which they may want to reflect prior to the Singapore meeting. We invite the national associations to indicate to us before January 15, 2001 any additional area of concern they may have. ?Before getting into specific comments, it is important to note that this Outline Instrument is a crucial step in securing a uniform legal framework for electronic transport documents. There is a need to clarify certain functional issues such as the right of control and the transfer of rights in the context of an electronic transaction. These sections should therefore be considered carefully to ensure that they meet their purpose.* Section 1.8: Holder means the person who is for the time being in possession of the negotiable transport document and entitled to transfer the rights embodied in such document. Is the above wording suitable to define the Holder of an electronic transport document N.B. There is also a more general issue that will need to be discussed. Is the concept of "transport document" in the context of an electronic transaction well understood and sufficiently defined to ensure that it can also encompass a document comprising more than one electronic messages? Section 1.9: First Holder *means the person who is named as the shipper in, or is identifiable as such from, a negotiable transport document.* Is the expression "is identifiable as such from" suitable in the context of an electronic transaction?. Section 1.13: Negotiable transport document means a transport document, such as a bill of lading, that states that the goods are to be delivered to order, to bearer, or to order of any person named in the document, and is not prominently marked "nonnegotiable" or "not negotiable". The term "prominently marked" may not be suitable since one cannot mark an electronic document. Section 1.18: In writing includes, unless otherwise agreed between the parties concerned, information generated, sent, received or stored by electronic, optical or similar means of communication, including, but not limited to, telegram, facsimile, telex, electronic mail or electronic data interchange (EDI), provided the information contained therein is accessible so as to be usable for subsequent reference. The use of such a definition should be avoided. Ideally, there would be no reference at all to such term. For the moment, however, and until a better expression is found that will encompass the new means of communicating and transacting, it is believed that instead a separate provision (not in the definitions section ) could be added along the following lines: Where anything in this instrument expressly or by implication requires information to be in writing, or provides for consequences if it is not, such requirement is satisfied, by the transmission, generation or storage of information by electronic, optical or similar means, provided the information contained therein is accessible so as to be usable for subsequent reference. The purpose of this section is to removed paper based obstacles to electronic transactions by adopting the relevant principles of the UNCITRAL Model Law on Electronic Commerce, 1996. National associations will also wish to reflect upon the issue of "consent". Is consent to an electronic transmission to be presumed unless agreed otherwise or on the contrary, is consent to an electronic transmission to be sought prior to proceeding with such transmission? Section 5.9.1: The carrier shall be presumed to have delivered the goods according to their description in the transport document unless notice of loss of, or damage to or in connection of the goods, indicating the general nature of such loss or damage, shall have been given in writing to the carrier before or at the time of the delivery, or, if the loss or damage is not apparent, within three working days after the delivery of the goods. A written notice is not required in respect of loss or damage which is ascertained in a joint inspection of the goods by the carrier and the consignee. Section 5.9.2: No compensation shall be payable for economic loss resulting from delay in delivery unless written notice of such loss was given to the carrier within 21 consecutive days following delivery of the goods. As indicated in the comment under section 1.18 , we should endeavour to find and use from now on another expression better adapted to all means of communications. The term "expressly" would not be suitable if what one seeks is to avoid is the use of verbal notices. The same comment applies to sections 7.3.1 and 9.3. Section 7.1.2: Shipper’s Entitlement to a Negotiable Transport Document The contracting shipper and the contracting carrier may agree that the transport document will be non-negotiable. Such an agreement may be express or implied. In the absence of such an agreement, the [contracting shipper/consignor] is entitled to a negotiable bill of lading or other negotiable transport document. "Nenegotiable transport document" is a term defined at section 1.13, it clearly includes a negotiable bill of lading. Because an electronic negotiable transport document must have the same value as a paper one, this reference may create an ambiguity. It should be deleted. N.B. It will be important for the national associations to assess if there are obstacles to the use of electronic transport documents in their law and what additional provision, if any, in the Instrument could facilitate their use . Section 7.2.1 – Required Contents of the Transport Document If the carrier issues a transport document, the transport document must:- (f) be signed by the contracting carrier It may be advisable to have a separate section to clarify that in the context of an electronic transaction, transport documents may be signed using techniques appropriate to this mode of communication. A provision along the lines of article 7 of the UNCITRAL Model Law on Electronic Commerce could be suitable. N.B. The final draft of UNCITRAL Model Law on Electronic Signatures will be reviewed and discussed further in the Discussion Paper. Section 7.2.3 Omission of Required Contents from the Transport Document (a)?The absence in the transport document of one or more of the particulars referred to in 7.2.1 , or the inaccuracy of one or more of those particulars, does not affect the legal character of the transport document. [The issuer of the transport document is liable to the shipper or other holder of the transport document for any damages that are proximately caused by its breach of 7.2.1.] It should be made clear that this section does not create liability for omissions resulting from errors in transmission be it in the form of an illegible paper b/l or of a garbled electronic communication. Section 7.4.2: *Ambiguous Signature* on a Transport Document This title should read "ambiguous identification" to better reflect the content of the proposed provision which does not deal with "signature" per se. Section 10.1:** (b)?The person in possession of the right of control is entitled to transfer its right to another person. Unless a negotiable transport document is issued, the transferor shall give due notice to the contracting carrier of any such transfer. This provision shall be carefully considered to determine if any special additional provision will be required to deal with electronic transport document. Also, is the use of "in the possession of" restrictive, if so, can it be avoided? Section 10.2: (b)?When a negotiable transport document is issued , the holder of that document is the exclusive person entitled to exercise the right of control. On request of the carrier, he shall produce the negotiable document to the carrier. In the event that more than one original of the negotiable document is issued, all originals shall so be produced. This section requires the production of the negotiable document. It clearly needs to be adapted for application to electronic transport documents. Section 11.3: Transfer of rights This section is important in the context of electronic transactions. The text to be adopted will need to include suitable wording to enable the endorsement or transfer of electronic transport documents. A provision along the lines of article 17 of the UNCITRAL Model Law ( slightly modified ) may suffice. Where a right is to be granted to a person and no other person, if the law requires that, in order to effect this, the right or obligation must be conveyed to that person by the transfer or use of, a document in writing that requirement is met if the right or obligation is conveyed by using one or more electronic communications, provided that a method is used which gives assurance that the right or obligation has become that of the intended person and of no other. Other provisions It may also be appropriate to include a section to expressly provide that expressions such as "issue" "issuance" "statement" etc. do not imply that something has to be done in writing and should not preclude the use of electronic transport documents. Finally, it would be useful to have a provision along the lines of article 17(5) of UNCITRAL Model Law on Electronic Commerce: (…) 17. (5)?"Where one or more data messages are used to effect any action in subparagraphs (f) and (g) of article 16, no paper document used to effect any such action is valid unless the use of data messages has been terminated and replaced by the use of paper documents. A paper document issued in these circumstances shall contain a statement of such termination. The replacement of data messages by paper documents shall not affect the rights or obligations of the parties involved." * The words or phrases that it is thought would require modification or should be deleted are printed in italics.