Law firm Reed Smith has said that the rapid development of automated systems and digital technology will be a paradigm shift, but that digital standards remain a significant hurdle for the industry to negotiate as the momentum towards the technological future gathers pace.
Nick Austin, a shipping partner in Reed Smith’s Transportation Industry Group, based in the company’s London office, argues that while e-bills of lading (eBL), autonomous vessels and blockchain are all emerging as drivers for a twenty first century industry the development is not uniform, and some nation states and companies will be left behind.
“Adoption is uneven and there is evidence of a growing divergence in digital standards, presenting a significant barrier to widespread and effective adoption,” he said.
Using eBL’s as a reference Austin points to what he calls, “A clear and present danger of cyber fraud,” and further points out that the widespread adoption of eBL’s will require significant challenges to be met.
“One of the most significant is how to replicate the law and regulations behind a traditional paper bill of lading in electronic form so as to give the e-bill functional equivalence. And not just in one jurisdiction, but uniformly across legal systems so that e-bills can be truly effective in international trade,” Austin pointed out.
The United Nation’s UNCITRAL Model Law on Electronic Transferable Records (ETR) is one way to achieve uniformity across jurisdictions, but take-up of these rules is low said Austin.
“Instead, most maritime law systems, including the English-based common law system, have barely got to grips with the legal implications of e-bills, despite their being around since the 1990s,” said Austin, who went on to conclude, “Until more countries adopt suitable legislation, then e-bills, and the technology behind them, cannot become a commercial and legal norm. And in turn, the shipping laws that underpin the resolution of disputes in the leading maritime arbitration centres cannot develop.”
