BIMCO develops new electronic bill of lading clause for dry cargo
THE Baltic and International Maritime Council (BIMCO) has developed a specific clause for charter parties, known as the BIMCO e-Bill Clause, which seeks to address the use of electronic bills of lading (e-Bills) documentation.
The initiative aims to cope with growing interest from the dry cargo market (in particular, dry bulk charterers) in the use of electronic documentation. It is part of a general drive towards developing electronic solutions for facilitating trade in shipping.
The e-Bill clause was developed in consultation with owners/charterers' groups, the UK P&I Club and electronic systems providers, Bolero and ESS.
The e-Bill clause provides that at the charterers' option, bills of lading, waybills and delivery orders shall be issued, signed and transmitted in electronic form with the same effect as their paper equivalent.
Owners shall subscribe to and use electronic (paperless) trading systems as directed by the charterers, as long as such systems are approved by the International Group of P&I Clubs. Any fees incurred in subscribing to or for using such systems shall be for the charterers' account.
In addition, the charterers agree to hold the owners harmless in respect of any additional liability arising from the use of the systems, to the extent that such liability does not arise from owners' negligence.
All parties involved in the charter chain must sign up to the electronic system(s) as there is no participation without registration.
The registration process itself establishes a contractual relationship between the third party system provider for user authorisation and access to data essential to enable the electronic documentation process to function.
The provision for a wide indemnity in favour of owners for "additional liability" arising from the use of the approved systems (save for those arising out of owners' negligence) was introduced in response to owners' concerns about unidentified liabilities.
Unidentified liabilities might materialise from participating in a process with which they are not familiar.
Overall, the BIMCO e-Bill Clause strikes a reasonable balance between promoting the use of e-Bills and protecting the interests of owners as far as possible. As such, charterers may exercise their option to use e-Bills at any time and owners have to be prepared for this eventuality.
It has also been suggested that the effect and recognition of an e-Bill in other jurisdictions remain unclear.
For example, the suggestion is that difficulties may arise in respect of electronically recorded arbitration agreements in jurisdictions which apply the New York Convention (which only recognises agreements in writing) and this may affect the recognition and enforcement of an award.
In relation to any liabilities, which would equally have arisen in relation to paper bills of lading, cover is available for P&I liabilities in the ordinary way when using e-bills.
If liabilities have arisen solely due to the use of an e-Bill, cover will be available provided the electronic trading system has been approved by the International Group.
However, risks associated with the use of computer systems (such as hacking, theft of information, viruses) are not covered by P&I clubs and any owner wanting this specific extra cover will need to make separate arrangements.
The BIMCO e-Bill Clause is, however, certainly a step in the right direction, and is likely to develop over time. It remains to be seen whether the container sector will now follow suit in adopting a similar provision.
