With the impact of the Covid-19 Pandemic on major activities around the world, particularly in Trade, there is no doubt that in the 21st century, the advancement of technology has indeed been a major disruptor of activities in most industries of the economy and the Maritime Sector is not excluded. Recently, the Maritime industry has witnessed the deployment of Maritime Autonomous Surface Ships (“MASS”), the exponential growth of the usage of the E-Bill of Lading and the effective use of technology in the advancement of Maritime Security as evidenced by the Deep Blue Project and the likes. With the global trend towards digitization, embracing the technological innovations for the improvement of trade efficiency is a no brainer.
This need to change the old ways of doing things is not one without implications. These recent technological innovations shall be considered in the succeeding paragraphs of this article.
A. AUTONOMOUS SHIPPING
Autonomous Shipping is the use of self-piloting vessels to perform shipping operations. They are in most cases fully operated with the use of technology or unmanned vessels and their usage is largely associated with safety and security challenges; this however, does not eliminate the human element as this is an important factor for consideration. The benefits of Autonomous Shipping include cost savings as there are little or no crew onboard and reduction in loss of lives at sea or harm to humans. These benefits have prompted the governments of some countries to look into the concept of ship automation with nations such as Finland, Japan, USA and Singapore, conducting research and trials. Even in Norway, there is an established body called the Norwegian Forum for Autonomous Ships (NFAs) made up of persons and organizations interested in the subject of Autonomous Ships and one of their many objectives is to contribute to the development of and use of autonomous ships in Europe.
As beneficial as the concept of Autonomous Shipping may be, so many questions arise from this innovation viz: How is liability allocated in a situation where two autonomous ships collide? Where the ship breaks down at sea, what method is deployed to ensure it is fixed? How will Autonomous Shipping affect the future of workforce? These questions are yet to have answers owing to the lack of regulations governing the use of Autonomous Ships.
To ensure that there is a balance of the benefits derived from this new and advancing concept against safety and security concerns, the impact on the environment and on international trade, the potential costs to the maritime/shipping industry, and finally their impact on personnel (both on board and ashore); the International Maritime Organization (“IMO”) has initiated a work plan for the development of instruments for Maritime Autonomous Surface Ships (“MASS”). The IMO envisages/predicts that the MASS Code will come into force on 01 January 2028.
Although it is predicted that autonomous ships will be used for short voyages, as the global maritime industry momentum focuses on digitization and technological innovations, there is a dire need to develop legal frameworks for proper regulation and also to ensure there is adequate training for the maritime workforce, particularly sea farers as there is obviously a need to upskill in order to meet up with the attendant disruptive nature of Autonomous Shipping.
B. E-BILL OF LADING
A Bill of Lading is a document acknowledging the receipt of goods by a carrier or by the shipper’s agent and the contract for the transportation of those goods . It serves as a receipt of shipment, evidence of carriage contract, negotiable instrument and document of title.
Leveraging on technology, there has been a recent evolution and increased usage of Electronic Bills of Lading (“E-Bill of Lading”) and a general digitization of trade documents. Some of the advantages of the E-Bill of Lading over the Traditional Paper Bill of Lading are tabulated below:
It is trite that only parties to a Bill of Lading are bound by the terms of the Bills and ipso facto can sue and be sued in respect of same . This, by parity of reasoning or extension means that for a person to sue in respect of a Bill of Lading, it must be a recognizable Bill of Lading. Owing to the fact that the functionality and legal implications of most trade documents depend on their ability to be possessed for purposes of lien, one question that begs for answer is, can an Electronic Bill of Lading, being an intangible property be capable of possession? Although there are decisions of Superior Court which answer this question in the negative, the Writer aligns with the decision of the District Judge whose decision formed the basis of the Appeal in Your Response Limited v. Datateam Business Media Limited where a very important issue was raised and it was “whether it is possible to exercise a common law possessory lien over an electronic database”. The District Court while acknowledging the need to keep abreast with technological development and advancement, rejected the argument that it is not possible to exercise a lien over intangible property. The Court held thus:
“It seems to me in the present case that a lien can apply to the electronic data which was in the possession of the Claimant. It would not be appropriate for the law to ignore the development in the real world of record keeping moving from hard copy records into electronic media. The decision which I have to reach today is of limited purview and no doubt this topic may arise again in other cases in other contexts. But for the purpose of the particular decision which I have to reach in this case. I do not accept the submissions by Counsel for the Defendant that a lien cannot exist over the electronic data which was in the Claimant’s possession in just the same way as it could exist over the hard copy records in the Claimant’s possession.”
Sadly, the decision of the District Court was not supported by the Court of Appeal but it is the Writer’s firm position that with the innovations in technology, the problem of control and possession has been resolved. The UNCITRAL Model Law on Electronic Transferable Records (“MLETR”) adopted by the General Assembly on 07 December 2017, clearly recognizes the use of electronic trade documents for improved efficiency in commercial activities. As at date, only 7 States have adopted the MLETR as part of their domestic Legislations and these States include; Bahrain, Belize, Kiribati, Papua New Guinea, Paraguay, Singapore and Abu Dhabi Global Market located in the United Arab Emirates .
Based on the UNCITRAL MLETR, in a bid to reform the law in the United Kingdom to allow for trade documents in electronic form, the Law Commission submitted a Report to Parliament on Electronic Trade Documents, and in its Report, it recommended certain criteria which must be met for a document to qualify as an electronic trade document. These criteria are as follows:
• The document must be capable of Possession;
• Fully divestible upon transfer;
• Capable of exclusive control;
• Requirement as to the integrity to establish authenticity;
• The document must contain the same information as would be required to be contained in the paper equivalent;
• The electronic trade document system must be reliable; and
• Identification of persons who exercise control of a document in electronic form.
With modern trends and evolving technology and as can be seen from the increasing number of Countries adopting the use of Electronic Trade Documents, it is safe to argue that the E-Bill of Lading can be treated in the same way as the traditional paper Bill of Lading.
In Nigeria, the closest legislation that recognizes the use of Electronic Documents is the Evidence Act, 2011. By virtue of Section 84(1) of the Evidence Act, electronic documents can be admissible in evidence upon satisfaction of the conditions contained in subsection (2) of the same section. Although it may seem as if the distinction between a mere computer-generated document and a legally binding E-Bill of Lading may be advanced to argue that the Evidence Act is being stretched beyond its limits, one can safely conclude, based on the provisions of the Evidence Act, that an E-Bill of Lading can be admitted in evidence under Nigerian Law.
Technology Platforms for E-Bills of Lading
In recent times, software platforms have been developed to meet the rising demands for electronic bills of lading and one of such platforms is Wave BL. The Wave BL Platform (an E-Bill of Lading and Trade Document Software) which has been used by major shipping companies to create and execute electronic bills of lading, leverages on blockchain technology for its effectiveness. Wave BL has a decentralized solution that makes it possible to verify title and possession, allows for transfer of e-bills of lading from one person to another with zero exposure to third parties. The Wave BL platform also has byelaws which are required to be accepted by users who sign up to use the platform. These byelaws are created to mirror the English Carriage of Goods by Sea Act of 1992 which in effect retains the required terms as stipulated under the relevant law.
The only challenge that may arise from these varying software platforms, is the problem of uniformity.
Finally, when it comes to trade or commercial transactions, particularly shipping, financial institutions play a major role in terms of issuance of letters of credit or using the e-bill of lading as a negotiable instrument. There is therefore a need to onboard the banks and acquaint them with the new development in this regard.
C. MARITIME SECURITY
Maritime Security is concerned with the prevention of intentional damage through sabotage, subversion, or terrorism and prompt mitigation of incidences within the maritime domain . It involves the continuous surveillance and reconnaissance of a nation’s maritime domain with a view to prompt interdictions when infringements occur to the nation’s regulations. For this purpose, surveillance technologies have been deployed to facilitate timely and accurate decisions to neutralize threats. The Deep Blue Project was established by Nigerian Maritime Administration and Safety Agency (NIMASA) inter alia, for the prevention of illegal activities in the Nigerian Exclusive Economic Zone and enhancement of the safety of lives at sea. Also, the NAF ATR 42 Patrol Aircrafts, Falcon Eye Project, Maritime Operational Intelligence System (MOIS) are some of the other technological systems deployed for the purpose of maritime security.
This has helped in promoting and securing the international maritime domain as well as protect maritime resources from all criminal acts.
Safety, ease of doing business, cost savings, speed and support for a greener economy are some of the many benefits that the effectual use of technology in the Maritime industry can promote. It is recommended that countries of the world key into this development and either adopt and domesticate the relevant international laws and or enact legislations to cover any lapse that may arise therefrom so as to enable the smooth running of the Maritime Sector in their jurisdictions.
With the world gravitating towards the use of technology, it is left for individuals and institutions to embrace modern technology and rethink their business processes in a bid to adapt and compete with global the market.
The Maritime Industry is taking laudable steps in ensuring that it has a competitive advantage by embracing the use of technology and it is imperative that the Maritime Workforce upskill to meet up with the challenges that this disruption may pose.
For further information, please contact:
Esther Samuel Umoekam
Energy, Constitutional and Transport Law Section
Paul Usoro & Co.
+234 (0) 8028242292