An Ethereum bill of lading under the UNCITRAL MLETR
| DOI | 10.1177/1023263X20904316 |
| Author | Niels-Philip Abdellatif |
| Date | 01 April 2020 |
| Published date | 01 April 2020 |
| Subject Matter | Articles |
Article
An Ethereum bill of lading
under the UNCITRAL MLETR
Niels-Philip Abdellatif*
Abstract
The paper bill of lading remains pervasive despite numerous problems associated with its form.
Blockchain heralds change as it allows unique tokens to be possessed and traded peer-to-peer
instantaneously over the internet without the need for a trusted central administrator. Blockchain
furthermore promises to ease processes thanks to its applicabilityin smart contracting procedures.
The Model Law on Electronic Transferable Records (MLETR), passed by UNCITRAL in 2017,
provides the relevant legal framework for legal protection of the blockchain bill of lading. This
paper proposes Ethereum as a viable smart contract-enabled blockchain platform for a bill of lading
system and examines said system’s compatibility with the MLETR. The analysis also shows that
blockchain technology may have significant consequences for the ‘control’ approach for estab-
lishing possession of an electronic transferable record.
Keywords
Bill of lading, UNCITRAL, MLETR, blockchain, control, smart contract
1. Introduction
A. The bill of lading
1. An abridged history
Evidence dating back to 1063 shows that clerks regularly kept records documenting goods that had
been boarded onto ships.
1
In the time since, the documentation has evolved significantly,
* Maastricht University, Maastricht, the Netherlands
Corresponding author:
Niels-Philip Abdellatif, Maastricht University, Maastricht, 6200 MD Netherlands.
E-mail: niels.abdellatif@gmail.com
1. S.M. Williams, ‘Something Old, something new: the bill of lading in the days of EDI’, 1 Transnational Law & Con-
temporary Problems (1991), p. 557.
Maastricht Journal of European and
Comparative Law
2020, Vol. 27(2) 250–274
ªThe Author(s) 2020
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/1023263X20904316
maastrichtjournal.sagepub.com
MJ
MJ
becoming more complex and maturing in legal character,
2
with the precursor to our modern bill of
lading (B/L) appearing around the beginning of the 19th century.
3
Today, the B/L is a document of
title issued on demand of the shipper, also known as the consignor, by a carrier or master or agent
of the carrier acknowledging receipt of the goods to be shipped to the ultimate receiver, or
consignee.
4
It determines the rights and obligations both of the shipper and the carrier, and is
recognized as an indispensable document in the shipping industry.
5
2. Functions
ThereissomedifferenceinthewayB/Lsaretreatedbyshippingpartiesaroundtheworld
depending on the international convention applicable to the transaction;
6
however, the B/L’s
principal purpose lies in enabling the owner of the goods to dispose of the goods rapidly, even
though they will be in the custody of the carrier by the time the B/L is finalized.
7
Three main
functions of the B/L render it capable of achieving this purpose.
8
Firstly, as a document of title, the B/L indicates the party with interest in the goods and, in the
case of a negotiable B/L, facilitates and documents title transfer through an ‘uncomplicated
transaction.’
9
Passing on the B/L in this manner transfers property rights in the goods, where that
is the intention.
10
The consignee can exchange the B/L for the goods once they arrive at their port
of destination, but it also enables them to dispose of the goods through endorsement and delivery of
the B/L.
11
In order to transport the goods, the shipper concludes a contract of carriage with a carrier.
12
The
second function of the B/L is to serve as evidence of this contract, with the terms and conditions
usually placed in fine print on the back of the B/L.
13
This indicates both to the buyer and concerned
intermediaries that the goods have been tendered for shipment.
14
2. Ibid.; E. Ong, ‘Blockchain Bills of Lading’, NUS Law Working Paper 2018/020 (2018), http://dx.doi.org/10.2139/
ssrn.3225520, p. 2.
3. S.M. Williams, 1 Transnational Law & Contemporary Problems (1991), p. 557.
4. S. Beecher, ‘Can the Electronic Bill of Lading Go Paperless?’, 40 The International Lawyer (2006), p. 628; M.
Dubovec, ‘The problems and possibilities for using electronic bills of lading as collateral’, 23 Arizona Journal of
International & Comparative Law (2006), p. 440.
5. UNCTAD Secretariat, Report on Bills of Lading by the Secretariat of UNCTAD, TD/B/C.4/ISL/6/Rev.1 (1971), §18-
20; J. Herd, ‘Blocks of Lading: Distributed Ledger Technology and the Disruption of Sea Carriage Regulation’, 18
QUT Law Review (2018), p. 307; S.M. Williams, 1 Transnational Law & Contemporary Problems (1991), p. 560; M.
Dubovec, 23 Arizona Journal of International & Comparative Law (2006), p. 439.
6. S.M. Williams, 1 Transnational Law & Contemporary Problems (1991), p. 560; M. Dubovec, 23 Arizona Journal of
International & Comparative Law (2006), p. 440.
7. UNCTAD Secretariat, Report on Bills of Lading by the Secretariat of UNCTAD, TD/B/C.4/ISL/6/Rev.1 (1971), §20.
8. S.M. Williams, 1 Transnational Law & Contemporary Problems (1991), p. 560; M. Dubovec, 23 Arizona Journal of
International & Comparative Law (2006), p. 441, 448; J. Herd, 18 QUT Law Review (2018), p. 307.
9. S. Beecher, 40 The International Lawyer (2006), p. 628.
10. S.M. Williams, 1 Transnational Law & Contemporary Problems (1991), p. 561; M. Dubovec, 23 Arizona Journal of
International & Comparative Law (2006), p. 442.
11. UNCTAD Secretariat, Report on Bills of Lading by the Secretariat of UNCTAD, TD/B/C.4/ISL/6/Rev.1 (1971), §19.
12. S. Beecher, 40 The International Lawyer (2006), p. 628.
13. S.M. Williams, 1 Transnational Law & Contemporary Problems (1991), p. 560-561; UNCTAD Secretariat, Report on
Bills of Lading by the Secretariat of UNCTAD, TD/B/C.4/ISL/6/Rev.1 (1971), §19, 22.
14. S. Beecher, 40 The International Lawyer (2006), p. 628.
Abdellatif 251
To continue reading
Request your trial