The UN Electronic Communications Convention and its impact and overall effect
Recently, Sri Lanka ratified the UN Electronic Communications Convention. This is a significant milestone in the evolution of our ICT law reforms, facilitated by the ICT Agency (ICTA). Since 1990s, United Nations Commission on International Trade Law (UNCITRAL) has taken the lead initiative to formulate legal texts to facilitate electronic commerce. These initiatives resulted in the adoption of the UNCITRAL Model Law on Electronic Commerce (1996) and the subsequent UNCITRAL Model Law on Electronic Signatures (2001). Both these Model Laws were prepared by UNCITRAL at a time when certain technologies, such as electronic data interchange (EDI), were more prevalent than the Internet.
The paradigm shift in the business models caused by technological advancements, as well as the issues concerning the interpretation and application of other international trade law treaties in the Internet era, compelled UNCITRAL to formulate a treaty specifically devoted to electronic commerce law. This is what led to the adoption of the “United Nations Convention on the Use of Electronic Communications in International Contracts” (a.k.a. UN Electronic Communications Convention or “UN ECC”), by the United Nations General Assembly on November 23, 2005. Given the widespread use of the Internet, and its significance for global trade, the UN ECC attracted broad interest, support and praise for its substance and content.
Fundamental Principles and Key Provisions
The UN ECC sets forth three fundamental legal principles which would be applicable to electronic commerce, namely, i) non-discrimination of electronic communications; ii) technological neutrality; and iii) functional equivalence.
Under non-discrimination, the mere fact that a document is presented or retained in electronic form does not provide sufficient grounds for challenging its legal effect. Second, the Convention promotes the notion of technological neutrality by recognising all methods under which information may be generated, stored, or transmitted in electronic form, irrespective of the technology used. Such technological neutrality is critical in developing rules that can accommodate any further developments, especially in light of the rapid advances in technology. Third, the Convention adopts the functional equivalence principle by providing criteria under which an electronic communication can be considered to be equivalent to paper-based communication.
The Convention applies to all electronic communications between parties whose places of business are in different locales, with at least one party having its place of business in a Contracting State (Article 1). However, it is important to note that contracts concluded for personal, family, or household purposes, as well as certain financial transactions, negotiable instruments, and documents of title, are excluded from the Convention’s scope of application (Article 2).
One of the significant features of the Convention is that the UN ECC defines the time and place of dispatch and receipt of electronic communications, tailoring the traditional rules to suit the electronic context (Article 10).
The UN ECC also allows for the enforceability of contracts entered into by automated message systems, despite having no natural person reviewing the individual actions carried out by the machines (Article 12). However, the UN ECC clarifies that a proposal to conclude a contract made by electronic means, and not addressed to specific parties, amounts to an “invitation to make an offer”, rather than an “offer”, whose acceptance binds the offering party (Article 11). The UN ECC also establishes remedies in case of input errors by natural persons entering information into automated message systems (Article 14). Finally, the Convention leaves significant room for parties to exclude its application or vary its terms, establishing the principle of party autonomy
(Article 3).
UN ECC and its application in Sri Lanka
The Sri Lankan Electronic Transactions Act No. 19 of 2006 is primarily based on the features of the UN ECC. As such, the core principles of the UN ECC, namely, technology neutrality, functional equivalence and party autonomy, are the three fundamental policy principles forming the basis of our Electronic Transactions Act. Further, the building blocks of the scope of application of the UN ECC are the definitions of “communication”, and of “electronic”, both of which are incorporated into our legislation.
With the ratification of the UN ECC, Sri Lanka becomes the first in South Asia and second country after Singapore, in all of Asia, to become a State Party to the Convention. The Convention will enter into force for Sri Lanka on February 1, 2016. Sri Lanka’s ratification of the UN ECC will ensure greater legal certainty for e-Commerce and e-Business providers who wish to use Sri Lankan law as the applicable law and ensure international validity for such e-Contracts. It would also provide Sri Lanka with the most modern electronic commerce legislation relevant to the Internet era, introducing some new provisions and clarifying the operation of others.
Ratification of the UN ECC would also bring ultimate clarity and predictability to the legal value of the use of electronic communications in cross-border trade with other Contracting States. For example, mobile payments are gaining increasing popularity in many countries in Africa, Asia and Latin America, and related services and technical infrastructures are in high demand. Sri Lanka has also pioneered in this sphere by becoming the first in South Asia to launch mobile cash. In this scenario, many Sri Lankan expatriates could take advantage of these developments to transfer remittances home, with greater ease. The UN ECC would be applicable to those payment services at international and domestic levels, resulting in greater administrative efficiency. These considerations will depend on the status of adoption of the Convention, as its relevance is directly proportional to its actual use.
(The writer is an Attorney with a specialised LLM degree in IT and Telecommunications Law from the University of London. He spearheaded ICT legal reforms, including Sri Lanka’s recent accession to the Budapest Cybercrime Convention and the UN Electronic Communications Convention. An US Eisenhower Fellow amd a British Chevening scholar, he is Programme Director/ Legal Advisor at the ICTA. He can be contacted via jfdo@icta.lk).