Earlier this month, Singapore’s Parliament passed the Electronic Transactions (Amendment) Bill which is expected to be given Presidential assent to become the Electronic Transactions (Amendment) Act 2021 (“Amendment Act”). The Amendment Act will amend the Electronic Transactions Act (Chapter 88 of Singapore), Bills of Lading Act (Chapter 384 of Singapore) and the Contracts (Rights of Third Parties) Act (Chapter 53B of Singapore), and adopt the UNCITRAL Model Law on Electronic Transferable Records with some modifications.
Once the Amendment Act is in operation (on a date to be appointed by the relevant Minister by notification in the Government Gazette), legal recognition will be given to the electronic form of negotiable instruments, documents of title, consignment notes, warehouse receipts, bills of lading, bills of exchange, promissory notes, and any transferable documents or instruments that entitle the bearer or beneficiary to claim the delivery of goods or the payment of a sum of money.
This is a significant step towards the digitisation of an industry that traditionally relies on transferable documents and instruments in paper format. This is especially considering the legal uncertainties surrounding electronic transferable documents – as previously discussed extensively in our report on the legal status of electronic bills of lading published in conjunction with the International Chamber of Commerce’s Banking Commission.
Organisations, particularly those in the marine sector, would be able to consider adopting such documents in electronic form that potentially provide for reduced costs of administration with ease of document processing, swifter transactions due to lesser repetitive legitimacy checks and lowered risks of fraud such as when implemented with digital authentication.
These developments come on the back of supportive programmes such as Singapore’s TradeTrust, that piloted digitisation of billing documents, and the Networked Trade Platform, where digital documentation was recently trialled with ports in Qinzhou and Tianjin in China.
Given the encouraging climate for electronic instruments, organisations should consider the commercial advantages of adopting them and assess whether they have the technological infrastructure to do so.