The computerized system currently developed for trading purposes is electronic data interchange (EDI). Shipping industry needs badly swift communication between all parties of the transportation process, therefore marine transport is believed to benefit substantially from adoption of EDI. The replacement of traditional bills of lading with the electronic equivalent has slowed down due to a number of legal and technical problems. In attempting to solve them the legal essence of bill of lading must be explored. In this respect, bill of lading is known to serve:
1) as a receipt for the cargo by the carrier;
2) as the contract of carriage itself (This issue is debatable. The other point of view regards bill of lading merely an evidence of the contract of carriage.)
3) as document of title to the goods which enables the holder to exercise the number of rights, including delivery of the bill of lading (In Russian federation the bill of lading is given a legal status of securities).
Most jurisdictions contain provisions imposing or implying the requirement for bill of lading to be a written and signed document. Hague-Visbi and Hamburg Rules are also based on presumption of paper document. Presently there are two basic ways to solve this problem.
1. Russian legislation extends the definition “document” to cover certain kinds of electronic messages. According to the Russian law “On information, informatization and information protection” information, being stored, processed and transmitted by means of computer systems is given a legal force of a “document”. Such a document, though, is to be certified with a digital signature. The Civil Code of Russian Federation provides that the parties are entitled to conclude the contract by means of exchanging the documents by the electronic or any other type of communication, which makes it possible to establish for certain that the document comes from the party of the contract.
Counting the above-mentioned definition of a “document” electronic bill of lading (stipulating it is issued, certified and transmitted properly) can replace its paper analogue.
2. Another approach, known as “functional equivalence approach” is introduced by United Nations Commission on International Trade Law (UNCITRAL) which adopted the Model Law on Legal Aspects of Electronic Data Interchange (EDI) and Related Means of Communication. The Model Law is intended to serve as a model to countries in order to create uniform law and has no legal force of its own. Ocean bills of lading are reckoned as key issues within the scope of the Model law; therefore it includes provisions, addressed specifically to carriage of goods.
The Model Law is based on the recognition that EDI itself cannot be regarded as a document, both in nature and legal aspects. The UNCITRAL Working Group on Electronic Commerce noted that attempts to introduce such concepts as “electronic bill of lading” or “electronic document” would be flowed( See J. Clift “Electronic commerce: The UNCITRAL Model law and Electronic Equivalents to traditional bills of lading/ International Business Lawyer Vol 27 (1999), p 313). The approach, proposed by Model law involves analysing the purposes and functions of traditional paper documents and providing that EDI, though different in nature, can produce the same legal effect. The functional equivalence is established not only of information about certain actions but of the fulfillment of those actions as well. The “functional equivalence” concept was also implemented in UNCTAD/ICC Rules for Multimodal Transport Documents, which state that multimodal document “can be replaced by electronic data interchange messages” (CMI rules).
A general report of the International Academy of Comparative law in 1994 noted that surmounting issues of writing and signature in EDI still doesn’t solve the problem of negotiability, which thought to be “perhaps the most challenging aspect of implementing EDI in international trade practices ( Report of the XIVth International Congress of Comparative law, held in Athens, 31 July to 6 August 1994.). The functioning of the bill of lading as a document of title is stipulated by its physical possession. Therefore the feature of negotiability is based on the presumption of a paper document. An interesting proposal in respect with this issue was noted by the United States of America:
“It should be borne in mind that what is being 'transferred' is not the paper or EDI message (that being just the medium), but the rights and/or title to the subject of the transaction.” (Draft Guide to enactment of the Model Law on Legal Aspects of Electronic Data Interchange (EDI) and Related Means of Communication. See John Livermore and Krailerk Euarjai “Electronic Bills of Lading and Functional Equivalence” )
Considering such a proposal, the main point to be found out is whether EDI may be an adequate means of transfer of the rights/titles. Working group marked, that one the major technical problems with bills of lading within EDI was to guarantee uniqueness or singularity of the messages, which are sent to transfer the titles.
There were several attempts to find a solution of this problem. In 1990 The Comite Maritime International (CMI) adopted Rules for Electronic Bills of Lading. The Rules established so called “private registry” system for electronic messages.
This private registry is carried out by the carrier who issues to the shipper an electronic bill of lading together with a “private key” (a combination of numbers and/or letters), possession of which entitles the holder to control the goods.
CMI Rules with some alterations were used as a legal ground in one of the most recent international projects – Bills of Lading for Europe (Bolero) (Nowadays Bolero International Ltd is a successor of a pilot project Bolero.). This project is carried out by a group of shipping companies, banks and telecommunications companies and aims to replace paper-based shipping documents with an online computerized registry. Bolero sets up a central service (Bolero Title Registry) which is to register all the deals and actions in relation with electronic bills of lading.
Central registry system looks more favorable compared to private one. One of its’ strongest merits is central registry being an independent facility and providing, therefore, a higher level of security against fraud. Actually, central registry system in electronic environment is not something really new, being widely exercised in circulation of electronic (non-documentary) securities.
For the further progress of EDI in shipping industry the unification of legislations is a must. Moreover, it’s very important to update the international conventions, covering the relevant issues. Alternatively, the world community should consider a possibility of adoption of a new convention, addressed specifically to EDI implementation in international business relations.