The newly aligned Versions of the ICC eRules were published in July 2023 as eUCP Version 2.1 & eURC Version 1.1.
As highlighted at the time, these were neither revisions nor updates of the eRules and were solely intended as an alignment with the UN Model Law on Electronic Transferable Records (MLETR) with respect to electronic transferable records.
So, is a similar approach required for the Uniform Rules for Digital Trade Transactions (URDTT)?
Is this even more imperative when taking into account the ongoing global alignment with MLETR?
Electronic Transferable Records
The eRules now specifically state that an electronic transferable record is defined as an electronic record that contains the information that would be required in the equivalent paper document, such as a bill of lading or an insurance document.
Such wording does not exist in the URDTT. But is it necessary?
Under the URDTT, a digital trade transaction is a representation of the underlying transaction and is the process by which the terms of the commercial contract between the seller and the buyer are recorded and progressed. Electronic records (documents) will be submitted that either evidence the underlying sale and purchase of the goods or services, or evidence the actual delivery/receipt of those goods or services.
As such, there is a clear consistency - however, there is an argument that it would be even clearer if the URDTT used the newly aligned definitions of an electronic record and an electronic transferable record, i.e.:
Reliable System
MLETR article 10 highlights that where the law requires a transferable document or instrument, that requirement is met by an electronic record if a reliable method is used to complete certain functions.
This is reflected in the ETDA wherein it states that a "reliable system" be used to give a document the required functions for it to qualify as an electronic trade document. The term "reliable" means that the electronic system meets certain standards, and clause 2 of the ETDA provides a list of non-exhaustive factors that a court may consider when determining if a system is reliable.
The URDTT goes no further than defining a data processing system as a computerised or an electronic or any other automated means used to process and manipulate data, initiate an action or respond to data messages in whole or in part.
As highlighted in the ICC publication "Implementing URDTT", it is essential that internal data processing systems can handle the relevant formats for electronic records, authenticate messages, and execute electronic signatures.
The URDTT Implementation Guide outlines the minimum standards for data processing systems. Such a system need not be state of the art, but it should be capable of performing those minimal functions of authentication considered commercially acceptable.
At this stage, it would not be advisable for the URDTT to go any further. However, close attention should be paid to the emergence of the implementation of "reliable systems", as this may provide a rationale for expanding URDTT definitions.
UTC (Universal Time Coordinated)
UTC (Universal Time Coordinated) was originally referred to in the Uniform Rules for Bank Payment Obligations (URBPO) in order to define the latest time that electronic records could be presented to a bank.
It denotes the international time scale defined by the International Telecommunications Union used by electronic computing and data management equipment, and the technical equivalent of Greenwich Mean Time (GMT).
Although UTC was also considered for the ICC eRules, there was no definitive majority backing and, accordingly, it was recommended that the UTC concept would not, at that stage, be included within those rules, but definitely be contemplated for future versions.
However, support was provided for inclusion within the URDTT as such time scale is seen as totally appropriate for these rules.
Based on the limited usage of URDTT at this stage, there appears to be no reason to change this approach.
Change of form
Clause 4 of the ETDA addresses the conversion of a paper trade document into an electronic trade document, or an electronic trade document into a paper trade document provided that two stated conditions are met. A similar article exists in the MLETR.
However, this has not been seen as an issue that impacts upon the URDTT. As stated in the Preliminary Considerations, the URDTT apply solely to a fully digital environment, and not to paper trade documents.
It is feasible that one aspect of a digital transaction may inadvertently be documented
on paper rather than digitally. However, for the purposes of the URDTT, this is a "practice" issue which cannot be mandated by rules that solely cater for a fully digital environment.
Converted document
Under the ETDA, when a document is converted from one form to another, the document in its old form would cease to have effect.
Under the MLETR, upon issuance of an electronic transferable record, the replaced transferable document or instrument shall be made inoperative and ceases to have any effect or validity.
With respect to the URDTT it is expected, in the event part of a transaction "converts" to paper, that the involved parties would reach a separate agreement on how to proceed, particularly if such action were inadvertent. However, it should be noted that such a process would be outside the scope of the URDTT.
Bills of Exchange Act 1882 and Carriage of Goods by Sea Act 1992
Clause 6 of the ETDA makes consequential amendments by setting out amendments to the Bills of Exchange Act 1882 and providing for the repeal of certain provisions of the Carriage of Goods by Sea Act 1992.
This has no applicability under the MLETR.
It also has no direct relevance to the URDTT. In respect of bills of exchange as part of a digital trade transaction, although not currently covered by the URDTT, handling will be decided by market practice. Furthermore, a payment obligation under the URDTT that meets the provisions of the Bills of Exchange Act (notwithstanding its electronic nature) can be treated as a bill of exchange.
In writing
Documents may have a requirement that they must be "in writing". Unlike the MLETR, there is no explicit provision in the ETDA allowing for electronic documents to satisfy "in writing" requirements. This is because the law of England and Wales defines "writing" in broad terms, and it is believed that the position in UK law is already clear: a trade document in electronic form can satisfy a requirement to be in writing.
The URDTT highlights that, unless applicable law requires otherwise, a requirement that information should be in writing is satisfied when an electronic record containing such information is accessible to an addressee and is not affected by any data corruption.
As such, no revision requirement is envisaged.
Signed
Trade documents may be required to be signed in order to be validly issued. The MLETR makes specific provision to allow for the signing of electronic documents.
This is not a requirement for the ETDA as the law of England and Wales is already sufficiently flexible to accommodate electronic signatures.
The URDTT defines "electronic signature" as data attached to an electronic record with the intent of identifying the signer and authenticating the record.
Although at this stage, there are no recommended minimum standards surrounding electronic signatures, the ICC publication "Implementing URDTT" provides a guide.
This may be an issue that should be addressed within the URDTT at a later stage.
Originals and Copies
Neither the MLETR nor the ETDA specifically address the concept of original electronic trade documents.
The key issue is that the document in question can be distinguished from any copies so that the obligation recorded therein is singularised. The ETDA achieves this insofar as it requires the document in electronic form to be identifiable as "the document" so that it can be distinguished from any copies before it can qualify as an electronic trade document.
The MLETR uses the notions of "singularity" and "control" to allow identifying a specific electronic record both as the electronic transferable record that entitles the person in control to claim performance and as the electronic transferable record that is the object of control.
The URDTT state that any requirement for submission of one or more originals or copies of an electronic Record is satisfied by the submission of one electronic record.
It is considered that it is not for ICC rules to define the term ‘original', as such definition may differ in practice. This is likely to remain the status in the foreseeable future.