Electronic Billing : S.J. Tubarzy


Nova ‘s invention is still playing vital role in the economy of advanced countries and almost developed country is potentially dependant of shipping and time is to be consider as credible element to compete the world contender. In shipping the most important document relied upon the business entities is believe to be bills of lading.

 At the uniform law conference of Canada, Clark Dalton defines the bill of lading as under “bills of lading or bill means a document evidencing the receipt of goods for shipment issued by a person engaged in the business of transporting or forwarding goods and includes an air consignment note or air way bill.

 It would be helpful to begin with a general introduction to the traditional bill of lading. It document issued by carrier to the consignor. Three copies of this are made, once retained by the carrier, one for the consignor and third sent to the consignee. The last mentioned party presents this document to collect the cargo at the port of destination.

  Essentially, a bill of lading serves three functions.

i)                    Receipt for the goods loaded on board ship.

ii)                   Evidence of the terms of the contract of carriage.

iii)                 Document of title.

It is this third function that is of great practical importance. It facilitates three other aspects. It evidences the right to possession of and physical control over the goods. Secondly, it is very relevant in the course of passing of ownership of the goods, and finally, it is used as a security for lenders. 

The viability of the internet in performing these three functions. The first function is easily performed by EDI (electronic data interchange). It is simply a transmission of information from carrier to shipper. As an evidence of the contract of carriage, EDI easily helps provide for the transmission of information from carrier to shipper.

The transmission of information can be managed quite satisfactory by using EDI messages, provided there are proper security and authenticated methods in place. Even the process of passing a piece of information down a chain of parties can be achieved with complete confidence that it can retain and be shown to have retained, its integrity throughout and that the originating and successive parties in the chain authentic. However when EDI attempts to perform the traditional negotiable bill of lading is easily transferable by mere delivery and required endorsement. Thus possession of this bill of lading gives the holder the right to receive the assignment and to deal with it even before it has reached him. The question that now stares at us who is the holder of the EDI bill of lading? There is need of law on the point that can clarify who this person is that is entitled to receive the consignment.

 There have been several difficulties encountered when the industry has attempted the paperless bill of lading. There appear to be mistrust about the threat of hacking and computer fraudsters. Nonetheless it is submitted that tampering is easier and more common in paper bill.

Industries that have switched over to computer are today heavily dependent on them. There would be a logistic nightmare if and when their system crash. Computerized bills of lading are dependent on the functioning of the computers, while the paper ones are considered to be more reliable. One solution to reduce the damage may be by insuring oneself against losses due to breakdown of computer systems.

Jurisdictional questions might also arise due to the fact that it is unclear as to when and where the bill of lading is issued. The rule of private international law would come into play at this point to determine where the contract law entered into. The classical rules that apply to contract arrived at through postal communication would find little or no application in matters relating to the electronic bills of lading. It is next to impossible to identify when and where a contract really came into existence. Some guidance may no doubt be obtained from fresh developments in the law relating to agreements concluded over electronic media such as telephone and fax.  

Several legal obstacles may be faced common to all electronic documentation. Bills of lading must bear signature. How can an electronic document be signed? This signature in whatever form possible must serve the function of proving who the source of the document is. The signature must be personal act of authentication. Can a message or code created by the computer be regarded as personal? What is the degree of human action required to ensure that the digital signature is voluntary and to be construed as a personal act of authentication?

Further bills of lading are referred to as documents. Can an electronic page be regarded as a document? The issue could be begun by defining a document 18. it would appear that a electronic message could be a document. Changing technology demands that law updates itself and that electronic message be included within the scope of documents.

The Indian carriage of goods by sea act 1925 compares a bill of lading to a document of title. A bill of lading has been defined as a document which evidences a contract of carriage and writing includes, telegram and telex.

The carriage of goods by sea act 1992 (UK) replace the bill of lading act 1855 and generally deals with ‘title to sue’ problems. This allows electronic messages to be regarded as a bill of lading.

The Australian sea-carriage document bill 1996 is the latest attempt to bring electronic bills of lading into practice. The Australian federal government has had before it the proposal for reform of bills of lading legislation since 1992 and to eliminate some legal problems incorporated in the bill of lading.

Being such an important document of trade, it is essential that a bill of lading must be worthy of trust. However, there is still lack of international confidence in the use of electronic bills. This is because one of the distinguishing features of international trade is that a large number of parties may be involved in a single shipment of goods. In addition to the buyer and the seller, contracts of carriage can easily involve several banks in different countries, insurance companies, carriers, forwarders, port and custom authorities. Each of these parties may have documentary evidence so that it is particularly difficult to devise a comprehensive EDI system for the bills of lading.

Reference:

1.      http://www.law.ualberta.ca/ulc/95pro/c95phtm

2.      http:www.his.com/~pildb/wg4-wp66.html

3.      Law relating to computer internet & E-commerce by Nandan Kamath.

4.      Electronic bills of lading by Ashwin Shankar.

5.      http://www.webcom.com/~pjones/model/htm

6.      Article 15 (i) (j) of United Nation Convention on the carriage of Goods sea 1978.

 (Author is lawyer of cyber laws in Pakistan)

Cyber Lawyers in Jaipur or Rajasthan