Legality Guide

TradeTrust Model Terms

As the industry transitions from paper-based to electronic trade documentation, there is a growing need for the support of technical and legal frameworks that enable the secure and effective use of electronic transferable records (ETRs) such as electronic Bills of Lading (eBLs), across different digital systems or platforms. TradeTrust’s open-source software components provide the technical foundation for achieving interoperability and are complemented by a set of model terms that facilitate legal alignment for the use of ETRs.

IMDA has engaged Watson Farley & Williams LLP (WFW) to develop the set of Model Terms and accompanying Guidance Notes for TradeTrust eBL adopters such as Business Service Providers (BSPs) and System owners. While primarily focused on eBLs, the structure and principles outlined in these documents can be adapted for other types of ETRs as recognised by law such as electronic promissory notes (ePNs), electronic bills of exchange (eBoEs), electronic warehouse receipts (eWRs), and potentially even Model Law on Electronic Transferable Records (MLETR)-aligned transferable instruments developed in the future.

How are TradeTrust Model Terms useful for TradeTrust adopters?

The Model Terms could facilitate applications by TradeTrust adopters to the International Group of P&I Clubs ("IG") for eBL system approvals as the IG may consider the terms and conditions (T&Cs) governing the use of those eBLs in their approval process.

Beyond the purpose of obtaining IG’s insurance cover for TradeTrust-enabled eBLs, the Model Terms may also be used as a reference to facilitate alignment on key legal aspects for TradeTrust adopters such as interoperability, dispute resolution and governing law.

What are the TradeTrust Model Terms?

The Model Terms are structured in three parts:

Part A - Definitions: establish precise definitions used in the Model Terms;
Part B - Terms to be incorporated in User Agreement Terms and Conditions: govern the relationship between platforms and their users, covering crucial aspects such as eBL clausing, rejection mechanisms, switch-to-paper procedures, surrender and accomplishment processes, liability considerations, and governing law and dispute resolution frameworks; and
Part C - TradeTrust eBL provisions: align to statutory law and should be incorporated into every TradeTrust eBL governed by a MLETR.

Please note that the Model Terms are intended to serve as a baseline reference and not meant as a comprehensive set of terms set out for BSPs.

What are the Guidance Notes?

The Guidance Notes provide detailed explanations and context for implementing the Model Terms.

Disclaimer: These Model Terms and Guidance Notes are provided by IMDA for reference only and do not constitute legal advice. IMDA is not a party to any contracts that may be formed using these Model Terms and Guidance Notes. Users should seek independent legal counsel to review and adapt these materials to their specific circumstances and requirements. Please also refer to the Disclaimer found in the Guidance Notes for more information

Download the Model Terms and Guidance Notes. To access useful resources in the future, subscribeto our mailing list.

TradeTrust Design for MLETR-aligned laws

Previously, usage of electronic versions of bills of lading faced difficulties due to technological and legal challenges in establishing the original document and its rightful owner. TradeTrust is designed to facilitate systems to achieve the requirements set out in the UNCITRAL Model Law on Electronic Transferable Records (MLETR) to address these difficulties.

Instead of relying wholly on contract law, your TradeTrust-enabled electronic documents can be supported by statutory law in compliant jurisdictions.

When using these electronic documents across MLETR-aligned and/or non-MLETR-aligned jurisdictions, it is recommended to expressly choose a governing law and jurisdiction provision for the documents with a MLETR-compliant jurisdiction.

Using an example of a shipment from a non-MLETR-compliant jurisdiction like China to Singapore: As long as the TradeTrust-enabled electronic Bill of Lading (eBL) issued by the carrier is governed by a MLETR-compliant jurisdiction such as Singapore, that eBL will most likely be considered compliant to the MLETR as applied under Singapore law, and be treated as equivalent to a paper bill of lading. That is the same position with regards to express choice of law and jurisdiction as current law.

Some other MLETR-compliant jurisdictions include the UK, France; New York and Delaware in the US; the Abu Dhabi Global Market in the United Arab Emirates, and more.

IMDA engaged Stephenson Harwood LLP (in alliance with Virtus Law LLP), with input on US law aspects from Blank Rome LLP, to develop a TradeTrust Legality Guide. In it you will find:

How TradeTrust addresses legal and technical issues that have prevented eBLs from being widely used in global trade
How TradeTrust-enabled eBLs work under the MLETR and legal systems in Singapore, the UK and the US
Advice on how TradeTrust eBLs can work between MLETR and non-MLETR countries/territories

Download A legal and practical analysis of TradeTrust-enabled eBLs and their use in global trade.

Model Law on Electronic Transferable Records

In 2017, the United Nations Commission on International Trade Law (UNCITRAL) published the Model Law on Electronic Transferable Records (MLETR). This law harmonises the recognition of electronic transferable records (ETRs) across borders.

You may refer to the list of countries and territories whose legislation has been influenced by the MLETR and the principles on which it is based. It is recommended that professional advice be sought on the choice of governing law in regards to ETRs.

The adoption of TradeTrust would allow you to easily create and manage MLETR-compliant ETRs that satisfy relevant statutory laws, providing greater certainty to businesses and removing the barrier to end-to-end digital trade.

Singapore's Electronic Transactions Act

In March 2021, the Electronic Transactions Act (ETA) was amended to align Singapore’s legal and regulatory infrastructure with international trade law and the latest technological advancements. The amendment adopted the MLETR published by the United Nations Commission on International Trade Law for the creation and use of ETRs. ETA gives electronically concluded contracts the same status as written contracts through a set of legal provisions.

ETA allows ETRs to be recognised as functional equivalents to their paper versions in Singapore.