Chapter 2 – Examining the Harmonization Status of Laws Governing Digitalization of
A. Legislative Approach to Promote Harmonization in Electronic Law
I. Lawmaking Bodies and Methods
Given that several functioning technical solutions are available to replicate the functions of paper B/Ls in the electronic atmosphere,140 this doctoral thesis recognizes that the legal uncertainty resulting from unharmonized legal framework worldwide is one of the greatest hurdles that hinder the application of electronic maritime documents. The existence of this legal uncertainty makes the application of electronic B/Ls in transactions daunting for participants in maritime transport.
As the number of legislators who recognize this impediment grow worldwide, they have gradually reached a consensus that an internationally harmonized solution is what the industry desires.141 Currently, the most commonly used approach in electronic law is the enactment of new international legislations either in the face of binding or soft law instruments. This approach has been one of the most frequently used to achieve a high degree of legal harmonization in international trade law since the beginning of the nineteenth century.142
Given the lack of international public legislature, legislation is usually initiated by
“private” international lawmaking bodies. They are characterized as private because they are not owned by any sovereign state, although they are generally treaty-based organizations
140 One clear evidence is that several running projects have provided platforms, on which electronic B/Ls can be freely issued, amended, and transferred. The Bolero, for example, has been providing such services since 2000. Another company named essDocs has also been providing paperless trade solutions to the industry for more than 12 years.
141 See Jeffery B. Ritter & Judith Y. Gliniecki, International Electronic Commerce and Administrative Law: The Need for Harmonized National Reforms, 6 HARV. J.L & TECH. 263, 271 (1993). “Conflicting national rules, even if intelligent and internally coherent as national schemes, will present nearly as great a problem for global electronic commerce as would an absence of rules altogether.” See also Martin I. Behn, The Illinois Electronic Commerce Security Act Too Much Too Soon or Too Little Too Late?, 24 S. Ill. U. LJ. 201, 231 (2000). “It appears more likely that a lack of consistency among the state statutes is a detriment that is more likely to inhibit the growth of electronic commerce than the failure of the states to enact any legislation at all.”
142 Stephan, Paul B, The futility of unification and harmonization in international commercial law, Va. J. Int'l L. 39 (1998), on p.745. In this article, the author concluded that a systematic effort to enlist sovereign nations for unifying the law of international commerce is the most common approach in the last century.
consisting of states. Some scholars posit that they are sub-state actors though.143 These international bodies commonly convene experts from all relevant fields to hear their opinions while drafting the law. Upon completing the draft, representatives from the member states of these international organizations are gathered to review the draft along with the possibility of enactment.144 Revising a draft before it can be finally promulgated usually takes years. After promulgation, the governments can adopt the law either as treaties or as domestic legislation.145 Despite the distinct traditions, cultures, and agendas of different international legislature bodies, their approach to enacting laws is universal: drafting them for national legislatures to adopt.
Examples of this legislative approach include The Vienna Convention on the International Sale of Goods (CISG),146 the Warsaw Convention on the Unification of Certain Rules Relating to International Transportation by Air (Warsaw Convention),147 the International Chamber of Commerce’s International Rules for the Interpretation of Trade Terms (Inco terms),148 and the Uniform Customs and Practice for Documentary Credits (UCP),149 which are the most successful legislations.
In the lawmaking process regarding digitalization of maritime transport documents, the influence of this legislative approach is ubiquitous. The UNCITRAL, which is the core international body in international trade law that focuses on further harmonizing and modernizing the law, has followed this approach. The UNCITRAL has a commission in charge of selecting topics for every year’s work program. The topics will be assigned to its working groups, which consist of experts, usually from academia, selected for the special needs of the
143 See for example Hollis, Duncan B., Why State Consent Still Matters-Non-State Actors, Treaties, and the Changing Sources of International Law, Berkeley J. Int'l L. 23 (2005), 146. In this article, sub-state actor is defined as “semi-autonomous territorial entities that are legally dependent upon, or associated with, independent sovereign states.” See also Bruner, Christopher M., States, Markets, and Gatekeepers: Public-Private Regulatory Regimes in an Area of Economic Globalization, Mich. J. Int'l L. 30 (2008), on p. 128.
144 See Schmitthoff, Clive Maximilian. Clive M., Schmitthoff’s select essays on international trade law, BRILL, 1988.
Schmitthoff wrote in his book that the decisive feature of the modern lex mercatoria is that it is largely the deliberate creation of formulating agencies, such as UNCITRAL, Unidroit, the ICC, the Hague Conference on Private International Law, the Comité Maritime International, and the International Law Association.
145 Ibid., at p. 753.
146 United Nations Convention on Contracts for the International Sale of Goods, Apr. 10, 1980, U.N. Doc. A/Conf/97/18, reprinted in 52 Fed. Reg. 6264 (1987) [hereinafter CISG].
147 Convention for the Unification of Certain Rules Relating to International Transportation by Air, October 12, 1929, 49 Stat. 3000, 137 I.N.T.S. 11 [hereinafter Warsaw Convention].
148 INTERNATIONAL CHAMBER OF COMMERCE INCOTERMS-INTERNATIONAL RULES FOR THE INTERPRETATION OF TRADE TERMS 1990 (I.C.C. Publ. No. 460, 1990 ed.).
149 INTERNATIONAL CHAMBER OF COMMERCE, UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS 1993 (I.C.C. Publ. No. 500,1993 ed.) [hereinafter UCP].
assignment. After receiving the assignment, the working group will operate independently from the commission except to present an annual report on the progress of their work. To collect ideas for and feedback on the drafting work, the working group will hold one or two sessions per year and invite member states and international organizations to send delegations to attend the session. The delegations can provide suggestions, and the working group shall address these concerns.150 The making of the draft law is not decided by votes, but a certain degree of consensus should be reached. Equipped with this method, the UNCITRAL has adopted three conventions, three model laws, and one legislative guide in relation to the usage of electronic maritime transport documents.151
The first two model laws published by the UNCITRAL have been highly successful.152 Many countries, including the greatest economies, have used them as benchmarks to modernize their electronic laws. The four principles of non-discrimination, functional equivalence, technology neutral, and party autonomous, which are embodied in these model laws, have been accepted by a considerable number of countries as fundamental principles of electronic commerce law. 153 Other international legal bodies, including the Comité Maritime International (CMI), have attempted to adopt a different legislative approach by publishing a voluntary set of rules which will only be applicable if actors incorporate the rules in their contracts.154 The CMI Rules have turned out to be unpopular in the shipping industry due to their inherent flaws.155
On the account that UNCITRAL is the most influential lawmaker and its model laws established the first regulatory legal framework in international electronic law, the next subsection introduces the laws of the UNCITRAL by presenting its law principles.
150 For additional details about the UNCITRAL, see A Guide to UNCITRAL, Basic Facts about the United Nations Commission on International Trade Law, available at http://www.uncitral.org/pdf/english/texts/general/12-57491-Guide-to-UNCITRAL-e.pdf.
151 The data reflect information posted on the UNCITRAL homepage. UNCITRAL, Status of Conventions and Model Laws (visited December 5, 2018), available at https://uncitral.un.org/en/texts.
152 The two model laws are the UNCITRAL Model Law on Electronic Commerce and the UNCITRAL Model Law on Electronic Signatures. Both have been adopted by a large number of states, including those with strong economic power.
153 See Status of UNCITRAL Model on Electronic Commerce (1996), available at http://www.uncitral.org/uncitral/en/uncitral_texts/electronic_commerce/1996Model.html.
154 Comité Maritime International Rules for Electronic Bills of Lading (hereinafter, CMI Rules), prepared by the CMI on June 1990.
155 Dubovec, Marek., The problems and possibilities for using electronic bills of lading as collateral, Ariz. J. Int'l & Comp.
L.23 (2005), on p.451.