FAQs on Electronic Bills of Lading

1. What is the position of the International Group of P&I Clubs with regard to paperless trading?

In considering the use of a trading system that features electronic bills of lading, the Clubs wish to ensure that such a system ensures performance of the three functions of a bill of lading which customarily underpin P&I cover, namely: as a receipt, as a document of title, and as a contract of carriage which incorporates the Hague or Hague-Visby Rules.

2. Have any systems been approved by the Club/International Group?

The latest versions of the six systems approved by the International Group are set out below:

• essDOCS: DSUA 2013.1 and DSUA 2021.1;
• Bolero: Bolero International Ltd Rulebook/Operating Procedure 1999;
• Corda eBL: User Agreement, version 1.2;
• edoxOnline: e-BL Terms and Conditions, version 1, dated 18 May 2018;
• WAVE: WAVE Application and Network Bylaws, version 1, dated 20 December 2019; &
• CargoX: CargoX Special Terms and Conditions”, version 1.0, dated 10 February 2020.
• TradeLens eBL: Rulebook and Service Description dated 24 February 2021.

It is always advisable to check that the system preferred bears the correct designation and is the approved version.

3. Is my position in respect of cover better protected when using one of these approved systems, than another electronic system which has not been approved?

Yes. Operators will have Club cover for P&I liabilities arising out of the use of one of the approved systems and thereby avoid exposure to the risks connected with the use of non-approved systems.

However it is important to note that all exceptions and exclusions under the Club Rules continue to apply (as they would with a paper bill of lading)

says the UK Club.

This includes exclusions of cover relating to the carriage of goods, such as:

• The issue or creation of an electronic document/record with a description of the cargo or its condition known to be incorrect;
• Short delivery where an electronic document/record is issued or created for an amount of cargo greater than that known to have been loaded;
• Discharge at a port or place other than the port or place provided for in the contract of carriage;
• The issue or creation of an ante or post-dated electronic document/record; and
• Delivery of the cargo without production of the negotiable electronic document/record.

4. What are the risks of an unapproved electronic system?

The electronic system is not recognised as performing all the functions that a paper bill of lading would have performed. One example could be that an unapproved system is found, when challenged legally, not to transfer rights in goods in the manner that the creators of the system intended. This may give rise to a dispute about ownership and mis-delivery of the cargo.

Another example could be if the Hague or Hague-Visby Rules have not been effectively included into the electronic bill of lading. If it is found that in each case the liability has arisen because of the use of the electronic system, then that will not be covered within normal P&I cover. However, it may be covered at the discretion of the Members’ Committee.

5. Are there any other liabilities in using electronic bills of lading?

Operators should be aware that participation in an electronic trading system may require entering into a contract with the system operator, which contract can include obligations to maintain minimum IT standards to access and use the electronic system and to use the electronic system only as permitted by the user agreements.

The user agreements usually also contain undertakings of confidentiality. Non-compliance with these obligations could give rise to contractual liabilities under the user agreement to other users and the operator of the electronic bill of lading system. These liabilities are no different to those contained in for instance, software agreement or other IT application agreements and would fall outside P&I cover.

6. Is there a risk when using an approved system that the contract of carriage will not be subject to the Hague or Hague-Visby Rules?

No, the contractual terms for the six approved systems make clear that any convention, treaty or national law that would have been applicable to carriage under a paper bill of lading will equally govern the carriage using an electronic document or record.

Therefore, if the carriage is subject to Hague or Hague-Visby Rules by reference to the terms and conditions incorporated into the electronic document/record and/or by application of convention or national law as if a paper bill of lading had been issued, then there should be no problem with Club cover.

If the carriage is compulsorily subject to another liability regime like the Hamburg Rules, then again, Club cover will remain in place as it would if the carriage were under a paper bill of lading.