Electronic Bill Of Lading As A Document Of Title: Challenges and Opportunities

By Heli Dubey


Non-paper (electronic) maritime transport documents are one of the recent changes to the range of shipping documents used in maritime transportation. The bill of lading (BoL), since its invention in Italy in the 13th century, (Sy, 1999) has been one of the most essential papers in the shipping industry as it performs three principal functions, which are receipt of carriage of goods, proof of a carriage contract, and title document. (Ahmadi, Elsan, & Noshadi, 2017). The traditional bills of lading (BoLs) are paper-based the advent of technology has led to the introduction of electronic bills of lading (eBoLs) have been introduced in the shipping industry The BOLERO rulebook defines an eBoL as “an instrument, created and evidenced by the transmission into the System of Messages, which operates as a receipt for a consignment of goods shipped and/or received for shipment by the Carrier and as evidence of a negotiable contract of carriage, which instrument has the legal effect described in these Rules.” (Thilakaratne & Mendis, 2020). However, replication of the functions of a paper-based BoL has been extremely contentious amongst the shipping industry as well as states. (Dubovec, 2006). The present article will undertake an analysis of the challenges and opportunities that an eBoL poses particularly as a document of title.

Critical Analysis

Bill of Lading as a document of title: Legal Effects

The function of a BoL as a document of title is one of its most unique characteristics and is only about 200 years old. (Chukwuma, 2013). The case of Lickbarrow v Mason [1]is the leading authority wherein it was held that “the holder of the BoL has a right to claim possession of the goods mentioned therein from the captain of the ship and thereby a BoL was for the first time considered as a document of title.” (Baughen, 2019). Also, only common law jurisdictions consider BoL as “transferable documents of title,” whereas it is considered a negotiable title of document in civil law jurisdictions. (Bury, 2016). The difference is that a negotiable instrument of title can give the transferee more rights than the transferor did, as opposed to a transferable document of title, which can only give the transferee the rights that the transferor had.

Transferring a BoL as a document of title can have 3 broad effects which are (Seneka, 2010).:

  • Bestowing the right to possess the goods to the holder;
  • Transfer to the holder, title in the goods; and/or
  • Transfer the contractual obligation to the new holder.

It has been argued by a lot of scholars that replicating the function of BoL as a document of title by eBoL is the most difficult as it faces several challenges. Major challenges faced by eBoL in replicating the function of a traditional BoL are discussed in the following section.

Electronic Bills of Lading as Document of Title: Challenges

Issue of secured transmission

One major issue regarding eBoLs is that they can be easily decrypted, provided the heightened technological advances, and thereby can be easily forged. (Svensson, 2010). This issue is further illustrated by the fact that, unless there are some glaring and obvious defects in the document, a carrier is not often obligated to thoroughly examine the authenticity of the documents handed to him when he surrenders the goods upon the presentation of a BoL. Under the current international maritime trade practices, a paper BoL is provided as a set of three originals and in case the carrier delivers the goods against presentation of any one of the original copies so issued, he is released from liability. (Thilakaratne & Mendis, 2020). Therefore, an eBoL must be created, stored, and transmitted in a manner that is compatible with existing standards for international trade. Even though it would be considerably easy to electronically record the quantity and quality of goods loaded onto the ship, it would be far more difficult to develop a system for passing an eBoL from one party to another.

Issue of recording of transactions

In the case of a paper BoL, it is possible to record all the transactions which affect it on the face of the BoL itself. However, for an eBoL, setting up a central system to record all such transactions is necessary in order to be able to record all the happenings from the time of its issuance to the loss of negotiability through the conveyance of goods to the final holder. Such a central register system is used by the BOLERO system, which is now in use, to record each and every transaction that has an impact on a BoL issued under the BOLERO system, also known as a “BOLERO bill of lading. The BOLERO project’s main problem is that the features of the system are solely accessible to registered users. This mechanism must be a system that is accessible to anybody in the globe interested in using its features if it is to assist in the construction of an eBoL.

Issue of effective adoption in domestic law

Another major obstacle to the effective adoption of eBoL is its lack of recognition and acceptance in the domestic legal regime. An eBoL needs to adopt the same terminology as a paper-based BoLs to be meaningful. One example for highlighting the said problem can be found under section 25 of the Sales of Goods Act, 1930 which provides for “the presumption that a seller retains the right of disposal when the bill of lading is issued pursuant to the order of the seller or his agent.” The said section only applies to a paper BoL and not to an eBoL. A similar provision is present in section 19 (2) of the Sale of Goods Act of the UK. (Thilakaratne & Mendis, 2020).

This lack of legal recognition of eBoLs has also resulted in the reluctance of banking and financial institutions in operating transactions involving eBoLs.

Recent developments for making eBoL a viable option


One of the notable attempts at dematerializing BoLs and making eBoLs functionally and legally equivalent to paper BoLs is the essDOCs system. (Cui& Zhang, 2022). Similar to the BOLERO system, the essDOCs can be accessed only by registered users. However, one advantage of essDOCS over the BOLERO system is that it can electronically replicate the aspect of a paper BoL as a document of title. This is done by watermarking the electronic copies as “ORIGINAL” and “COPY.” Whereas any party may receive copies of the electronic bill that have a watermark reading “COPY” embedded in them, the “ORIGINAL” watermark-designated original eBoL can only be held by one party at any time throughout the transaction, and once that party loses it, it cannot regain it. But the system has not received much success since banks must have direct access to their collateral security, and so far, only 27 banking companies have agreed to participate as a client in the said system.

Use of Blockchain Technology

Blockchain technology creates “digital property” ownership of which is kept on “decentralised ledgers,” eliminating the need for any form of reliable “third-party central registry” to track ownership. “WAVE,” a permissioned blockchain platform is one prime example of useful utilisation of blockchain technology which aims at replacing the pen-paper procedures prevalent in international trade. WAVE’s eBoL proposes to cut the costs associated with supply chain management by providing access to a decentralised blockchain registry. (Zhu &Li, 2022).

Blockchain technology has other added advantages, beyond eliminating paper from commercial transactions. With the integration and agreement of authorised users, blockchain platforms would also allow the automation of contractual duties, such as those observed in BoLs.


Technological advancement has instigated the dematerialization of important maritime and shipping documents most significant of which is eBoLs. However, the development of eBoLs has been quite slow. All parties involved in international trade have not fully embraced and trusted eBoLs, mostly because of concerns regarding their legitimacy and security. (Jafari, Davidson, & McArdle, 2015). It is challenging from a legal standpoint to create an electronic document that is negotiable and permits the delivery of ownership from the seller to the buyer.

The incorporation of Blockchain technology for efficient and secured adoption of eBoLs appears to be the latest and most promising attempt at the dematerialization of BoLs. But at the same time, the success of blockchain is, hampered by a few significant challenges. The legal uncertainty surrounding the emerging technology is perhaps the most important one since differences in how different countries regulate to validate blockchain transactions will ultimately result in a conflict of law difficulties resembling those of earlier dematerialization initiatives. In addition to this, the mindset and willingness of people who are actively involved in the trade will also play an important role in the acceptance of eBoLs, as it is they who, through their mercantile practices, gave birth to the paper-based BoLs and the functions that it serves. (Thilakaratne & Mendis, 2020).

[1] Lickbarrow v. Mason, (1794) 5 TR 683.