The Role of English Public Policy in Promoting the Circulation of Electronic Trade Documents

Abstract

The Model Law on Electronic Transferable Records (2017) enabled the use and transfer of electronic and digital trade documents across borders. This Model Law influenced the enactment of the 2023 Electronic Trade Documents Act (ETDA) in the United Kingdom, which is a pioneer in this regard. In implementing the Model Law, however, the UK Parliament used permissive wording and allowed significant discretion regarding the assessment of the reliability, integrity, and recognition of electronic trade documents. This has caused significant legal uncertainty that parties can deploy when they try to avoid foreign obligations. The defence of public policy is one way by which parties can try to frustrate the efficient circulation of electronic trade documents. Although English courts apply public policy within a narrow scope, they usually need to hear such applications and determine them, which can be burdensome. This article critically examines relevant provisions of the ETDA vis-à-vis the evolving technology and the lack of guidance apart from factors that the courts may consider. Detailed analysis is then provided to show how courts can circumvent or mitigate the legal uncertainty by using public policy in a positive manner. This involves a consideration of relevant policies underpinning electronic trade documents. A major argument is that there is ample scope to apply English public policy in a way that promotes the circulation of ETDs. This argument is then complemented by an examination of how mandatory rules can serve as a basis to further determine what could be saved from the foreign law, considering the vague criteria in section 2(5) of the ETDA.