Rethinking legal approaches to electronic bills of lading: from functional equivalence to a substantive approach

Abstract

The transition from paper-based to electronic bills of lading represents a significant advancement in global trade, promising enhanced efficiency and security. However, this transition also raises complex regulatory challenges. Among the regulatory approaches, functional equivalence has become the cornerstone for legitimizing electronic bills of lading. Scholarship and practice have largely embraced this principle without subjecting it to sustained critical scrutiny, although a few scholars have questioned its limitations in the legal context. In other words, although functional equivalence has been widely accepted, its limitations in the legal context remain underexplored. This research aims to critically evaluate functional equivalence and explore potential alternative approaches to better address the emerging challenges posed by new technologies. This research will first examine the theoretical underpinnings and historical foundations of functional equivalence. It will trace how this concept entered the field of law and became a regulatory approach for electronic records, including electronic bills of lading. The study will then evaluate how the principle was articulated in UNCITRAL's exploration of e-commerce and assess its adequacy in regulating electronic bills of lading, thereby laying the groundwork for a critical examination of its limitations.Beyond evaluating functional equivalence, this thesis also draws on the regulatory explorations of other international organisations. The proposed substantive approach on controlled electronic records highlights issues of control, proprietary rights, and custody, offering a distinct perspective. Building on these insights, this thesis proposes a substantive approach as an alternative framework for regulating electronic bills of lading. This approach aims to move beyond functional equivalence by directly addressing the substantive legal requirements of electronic bills of lading