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Published online by Cambridge University Press: 16 December 2024
Given the increasing use of technology and the digitalization of international trade through electronic documents, there is a need for a globally harmonized standard that caters for the legal aspects of digitalization. The Model Law on Electronic Transferable Records (MLETR) is one such law. Yet, it has not been adopted in Nigeria or several other jurisdictions. This article considers the possibility of Nigeria adopting the MLETR. To do this, the article considers the meaning of electronic transferable documents and the legal implications of digitalizing them. The article also examines the barriers and challenges to digitalizing electronic transferable records. It then considers some of the laws in Nigeria that would support electronic and digital trade transactions. Subsequently, the article highlights the benefits, challenges and hindrances to the adoption of the MLETR in Nigeria. It recommends an approach to adopting the MLETR, drawing from jurisdictions that have adopted it.
Legal consultant, Hakakire Legal Consulting Services. The author has varied experience across different jurisdictions and provides legal advisory and consultation services to different organizations. Her expertise is in international trade law, trade finance and digital law. She researches and writes on the African Continental Free Trade Area, artificial intelligence, climate change and digitalization, including blockchain technology and central bank digital currencies.
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2 The Electronics Trade Documents Act (HL Bill 57) started in the House of Lords and is currently in its third reading: <https://bills.parliament.uk/bills/3344> (last accessed 30 April 2024).
3 “Corporation movements for legislation for electronic bills of lading in Japan (2)” (4 April 2023, Abe & Sakata Legal Professional), available at: <https://abesakata.com/archives/419?en> (last accessed 30 April 2024).
4 JI MacWilliam Co Inc v Mediterranean Shipping Co SA (The Rafaela S) [2005] UKHL 11 2 AC 423, para 5.
5 AP Moller Maersk A/S trading as Maersk Line v Kyokuyo Ltd [2018] EWCA Civ 778.
6 “Digital assets”, above at note 1, para 3.63.
7 Bridge, M et al The Law of Personal Property (2nd ed, 2019, Oxford University Press)Google Scholar, para 5-015.
8 For definition, see BoE Act, sec 29(1).
9 Id, sec 29(2) provides a non-exhaustive list of defects.
10 Easton v Pratchett (1835) 1 Cr M 7 R 798 at 808.
11 Beale, H (ed) Chitty on Contracts (33rd ed, 2019, Sweet & Maxwell)Google Scholar, para 34-003.
12 Mihai, G “Bill of exchange: A modern and efficient instrument of payment within the commercial relations” (2016) 7 Journal of Euro and Competitiveness 15Google Scholar.
13 BoE Act, sec 83(1).
14 Goodwin v Robarts (1875) LR 10 Exch 337.
15 BoE Act, secs 8, 31(1) and 89.
16 Id, sec 83(1).
17 Id, sec 84.
18 Id, secs 29–30.
19 Schaffer, R et al International Business Law and Its Environment (9th ed, 2011, Cengage Learning)Google Scholar at 188.
20 Mercuria Trading Pte Ltd v Citibank NA [2015] EWHC 1481 (Comm) 2015 1 CLC 999.
21 Factors Act 1889, sec 1(4).
22 See for instance, Impala Warehousing and Logistics (Shanghai) Co Ltd v Wanxiang Resources (Singapore) Pte Ltd [2015] EWHC 811 (Comm), [2015] 2 All ER (Comm) 234, para 55.
23 “Digital assets”, above at note 1 at 36.
24 It is interesting to note that the title of a 2016 seminar suggests that UNCITRAL considered transferable documents to be instruments used in international trade: “Electronisation of transferable documents or instruments used in international trade” (seminar, 10–11 March 2016, Singapore, organised by UNCITRAL, Attorney General's Chambers of Singapore and The Association of Banks in Singapore), available at: <https://abs.org.sg/docs/library/seminar-etr2c47a29f299c69658b7dff00006ed795.pdf> (last accessed 30 April 2024).
25 “Digital assets”, above at note 1.
26 C Nagel et al Commercial Law (6th ed, 2019, Lexis Nexis) at 446.
27 (1887) 18 (QBD).
28 “Digital assets”, above at note 1 at 24–25.
29 Id at 24.
30 The Crowther Report on Consumer Credit (1971, Department of Trade and Industry), vol 2 at 577.
31 M Bridge Personal Property Law (4th ed, 2015, Clarendon Law Series) at 19.
32 “Digital assets”, above at note 1 at 26.
33 Carter v Wake 4 Ch D 605 (1877); and Bristol and West of England Bank v Midland Rly Co 2 QB 653 (1891).
34 R Goode and E McKendrick Goode and McKendrick on Commercial Law (6th ed, 2020, Penguin Books), para 2.57; “Digital assets”, above at note 1 at 26, para 2.57.
35 “Digital assets”, ibid; OBG v Allan UKHL 21 (2008).
36 2020 ICC Global Survey on Trade Finance (July 2020, International Chamber of Commerce), available at: <https://library.iccwbo.org/content/tfb/pdf/2020iccglobaltradesurveyvweb.pdf> (last accessed 30 April 2024).
37 “MLETR explanatory notes” (2017), para 99.
38 Id, para 101.
39 Id, para 86.
40 “Bringing negotiable instruments into the digital world” (June 2021, International Trade and Forfaiting Association), available at: <https://itfa.org/bringing-negotiable-instruments-into-the-digital-world/> (last accessed 30 April 2024).
41 Id at 7.
42 “MLETR explanatory notes”, above at note 37 at 17.
43 “Digital assets”, above at note 1 at 10.
44 OBG Ltd v Allan, above at note 35.
45 “Digital assets”, above at note 1 at 12.
46 QB 41 23 (2015).
47 Ibid, generally. Colonial Bank v Whinney 30 Ch D 261 (1885).
48 “Digital assets”, above at note 1.
49 Ibid.
50 D Patel and E Ganne “Accelerating trade digitalization to support MSME financing” (March 2021), available at: <https://www.wto.org/english/res_e/booksp_e/tradedigitaltomsmes_e.pdf> (last accessed 30 April 2024).
51 J Bidwell et al “Uniform Rules for Digital Trade Transactions (URDTT)” (version 1.0, 1 October 2021), available at: <https://2go.iccwbo.org/uniform-rules-for-digital-trade-transactions-urdtt-version-1.html> (last accessed 30 April 2024).
52 Ibid.
53 M Madine et al “Application-level interoperability for blockchain networks” (February 2021) ResearchGate, available at: <https://www.researchgate.net/publication/349270583_Application-Level_Interoperability_for_Blockchain_Networks> (last accessed 30 April 2024).
54 Inclusive Deployment of Blockchain for Supply Chains: Part 6 - A Framework for Blockchain Interoperability. (World Economic Forum with Deloitte white paper, April 2020), available at: <https://www..weforum.org/docs/WEF_A_Framework_for_Blockchain_Interoperability_2020.pdf> (last accessed 30 April 2024).
55 Ibid.
56 Patel and Ganne “Accelerating trade digitalization”, above at note 50 at 41.
57 D Patel “Digitising trade: The time is now” (season 1, episode 69, Trade Finance Talks) Trade Finance Global, available at: <https://www.tradefinanceglobal.com/posts/podcast-s1-ep69-digitising-trade-the-time-is-now/> (last accessed 30 April 2024).
58 A Veneck “The cost of digital transformation” (2020), available at: <https://www.lightico.com/blog/the-cost-of-digital-transformation/> (last accessed 30 April 2024).
59 C Hoffman “First mover disadvantage: The hesitancy behind eBL [electronic bills of lading] adoption” (13 October 2022) Trade Finance Global, available at: <https://www.tradefinanceglobal-com.cdn.ampproject.org/c/s/www.tradefinanceglobal.com/posts/first-mover-disadvantage-hesitancy-behind-ebl-adoption/amp/> (last accessed 30 April 2024).
60 Veneck “The cost of digital transformation”, above at note 58.
61 “Digital maturity fuels revenue growth how to succeed in a post-pandemic world” (Forrester Consulting thought leadership paper commissioned by UST, April 2021), available at: <https://go.ust.com/forrester-digital-maturity-study-2021?utm_source=google&utm_medium=cpc&utm_campaign=RE_Search&utm_medium=adwords&utm_campaign=%5B_campaign%7D&utm_source=&utm_term=digital%20transformation%20journey&hsa_acc=2037824337&hsa_cam=14079571327&hsa_grp=128649976987&hsa_ad=544099734667&hsa_src=g&hsa_tgt=kwd-296569390014&hsa_kw=digital%20transformation%20journey&hsa_mt=b&hsa_net=adwords&hsa_ver=3&gclid=CjwKCAjwz5iMBhAEEiwAMEAwGFCT4B-BdfEg91KOw1FkLaEk4wfoNwytQrs7CBMSugg6c7ntk9TKnhoCbgMQAvD_BwE> (last accessed 30 April 2024).
62 Ibid.
63 “Digital assets”, above at note 1 at 16.
64 Ibid.
65 Id at 16.
66 A DiCaprio et al “Progress on trade digitization in 2021” (July 2021, ICC Digitalisation Working Group / BAFT), available at: <https://www.baft.org/wp-content/uploads/2021/07/Progress-on-Trade-Digitization-in-2021.pdf> (last accessed 7 June 2024).
67 “Digital assets”, above at note 1 at 17.
68 Id at 16.
69 Ibid.
70 Id at 36.
71 “Distributed Ledger Technology (DLT) and Blockchain” (World Bank Group FinTech Note No 1, 2017), available at: <https://documents1.worldbank.org/curated/en/177911513714062215/pdf/122140-WP-PUBLIC-Distributed-Ledger-Technology-and-Blockchain-Fintech-Notes.pdf> (last accessed 10 June 2024).
72 Veneck “The cost of digital transformation”, above at note 58.
73 P Brody “What ERP did for the single enterprise, blockchain can do for the whole supply chain” (9 June 2018) LinkedIn, available at: <https://www.linkedin.com/pulse/what-erp-did-single-enterprise-blockchain-can-do-whole-paul-brody/> (last accessed 30 April 2024).
74 “Digital assets”, above at note 1 at 19.
75 M Goldby Electronic Documents in Maritime Trade Law and Practice (2nd ed, 2019, Oxford University Press), para 2.47.
76 Cap 21 Laws of the Federation of Nigeria (LFN) 1958. Its provisions are in the Bill of Exchange Act currently retained as cap 35 LFN 1990 and more recently cap 138 (vol 2) LFN 2004.
77 Id, sec 73.
78 Id, sec 83.
79 UN Convention on Carriage of Goods by Sea (Ratification and Enforcement) Act 2005.
80 JM Phillips, I Higgins and R Hanke Byles on Bills of Exchange and Cheques (30th ed, 2019, Sweet & Maxwell), para 2-004 in “Digital assets”, above at note 1 at 30.
81 Act No 18 LFN (2011).
82 Sylva and Another v INEC and Others (2016) LPELR-45730 CA.
83 Cybercrimes (Prohibition, Prevention, Etc) Act 2015.
84 Id, sec 17(2).
85 A Akinkunmi “The Electronic Transaction Bill: Prospect for FinTech and e-commerce in Nigeria” (22 April 2018) Paragon Advisors Nigeria, available at: <https://paragonadvisors.com.ng/index.php/2018/04/22/the-electronic-transaction-bill-prospect-for-fintech-and-e-commerce-in-nigeria/> (last accessed 30 April 2024).
86 O Osadebamwen “Electronic transaction: Senate prepares legal framework to guide deals” (27 February 2020) Nigerian Tribune, available at: <https://tribuneonlineng.com/electronic-transaction-senate-prepares-legal-framework-to-guide-deals/> (last accessed 30 April 2024).
87 Akinkunmi “The Electronic Transaction Bill”, above at note 85.
88 Electronic Transaction Bill, sec 3(1)(a).
89 See MLEC, arts 16 and 17.
90 See “MLETR explanatory notes”, above at note 37, para 110.
91 “Explanatory note” (2018, UN Commission on International Trade Law), paras 13(b), 107–08 and 119.
92 “Digital assets”, above at note 1 at 56; “MLETR explanatory notes”, above at note 37, para 136.
93 Electronic Transactions Act 1988 (cap 88), sched 1, sec 4.
94 ETA Amendment Act.
95 Id, sec 16O(2).
96 Id, sec 6, inserting id, sec 16A.
97 Electronic Transactions Amendment Bill No 1 (2021), “Explanatory statement”.
98 ETA Amendment Act, sec 6, inserting id, secs 16O(2) and 16O(3).
99 Law No 55, Electronic Transferable Records (2018), art 1.
100 Ibid.
101 Ibid.
102 DiCaprio et al “Progress on trade digitization”, above at note 66 at 5.
103 “Framework for G7 collaboration on electronic transferable records” (28 April 2021, G7 Digital and Technology Track, annex 4), available at: <https://assets.publishing.service.gov.uk/media/609cf6108fa8f56a3a2958bd/Annex_4__Framework_for_G7_collaboration_on_Electronic_Transferable_Records.pdf> (last accessed 7 June 2024).
104 Ibid.
105 The act is available at: <https://www.president.gov.ki/images/Gazettes/gaz2021/Electronic_Transactions_Act_2021.pdf> (last accessed 7 June 2024).
106 L Castellani “MLETR in developing countries: Lessons from the Pacific” (11 October 2021) LinkedIn, available at: <https://www.linkedin.com/pulse/mletr-developing-countries-lessons-from-pacific-luca-castellani/?trackingId=xBJV6mzvR4S6YX4QTKbSCA%3D%3D> (last accessed 10 June 2024).
107 Ibid.
108 H Manaadiar “UK is a few steps away from legislating electronic trade document transfer” (14 October 2022) Shipping and Freight Resource, available at: <https://www.shippingandfreightresource.com/uk-is-a-few-steps-away-from-legislating-electronic-trade-document-transfer/> (last accessed 30 April 2024).
109 Trade Finance in Africa: Overcoming Challenges (September 2017, African Development Bank Group) at 4, available at: <https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Trade_Finance_in_Africa_Survey_Report.pdf> (last accessed 30 April 2024).
110 O Anudu “PwC puts annual financing gap for Nigerian SMEs at N617.3bn” (20 July 2020) Business Day, available at: <https://businessday.ng/enterpreneur/article/pwc-puts-annual-financing-gap-for-nigerian-smes-at-n617-3bn/> (last accessed 30 April 2024).
111 Patel and Ganne “Accelerating trade digitalization”, above at note 50 at 11.
112 Ibid.
113 2020 ICC Global Survey, above at note 36.
114 Patel and Ganne “Accelerating trade digitalization”, above at note 50 at 11.
115 Ibid.
116 Id at 12.
117 ICC Global Survey 2018: Securing Future Growth (2018, ICC) at 138, available at: <https://2go.iccwbo.org/subjects/icc-2018-global-trade-securing-future-growth.html> (last accessed 30 April 2024).
118 Id at 139.
119 “Nigeria: Country commercial guide - Trade financing” (June 2023, International Trade Administration), available at: <https://www.trade.gov/country-commercial-guides/nigeria-trade-financing> (last accessed 30 April 2024).
120 L Castellani (personal email, 17 October 2021) (on file with the author). Mr Castellani is legal officer, UNCITRAL Secretariat.
121 Ibid.
122 Patel “Digitising trade”, above at note 57.
123 L Castellani (personal email, 23 August 2021) (on file with the author).
124 Ibid.