Reed Smith In-depth

On 4 January 2021, the Singapore government introduced a bill into parliament to amend the Electronic Transactions Act (ETA) (Cap. 88) (ETA). The amendments to the ETA set out in the Electronic Transactions (Amendment) Bill (Bill) will be of relevance to the trade and commodities finance and fintech sectors as their primary object is to achieve recognition for transferable documents and instruments, such as billls of lading, bills of exchange and promissory notes, represented in electronic form. We summarise below the key proposed changes and outline some of the potential implications for the trade and commodities finance and fintech sectors.

Authors: Omar Al-Ali Hagen Rooke Judith Abanto Carolyn Chia (Resource Law LLC)

What is the Electronic Transactions Act?

The ETA in its current form came into force in May 2010 and has as one of its primary goals the facilitation of electronic transactions through the recognition of electronic signatures and records, implementing the United Nations Convention on the Use of Electronic Communications in International Contracts. In order to achieve this, it provides, amongst other things and subject to certain requirements set out in the ETA, for the following:

  • Enforceability: Information that is in the form of an electronic record shall not be denied legal effect, validity or enforceability.
  • Writing: The requirement for information to be written, in writing or to be presented in writing can be satisfied by an electronic record.
  • Signatures: The requirement for a signature can be satisfied by an electronic record and there is a presumption as to the authenticity and integrity of an electronic record or electronic signature.
  • Originals: The requirement for any document, record or information to be provided or retained in its original form can be satisfied by providing or retaining an electronic record of that document, record or information.
  • Public filings: Public agencies may accept documents, records or information by means of electronic records or in electronic form.
  • Contract formation: An offer and the acceptance of an offer may be expressed by means of electronic communications.

For these purposes, an electronic record is widely defined as “a record generated, communicated, received or stored by electronic means in an information system or for transmission from one information system to another”.

The provisions of the ETA have been of particular relevance over the past year as businesses have increasingly sought to conclude transactions virtually in light of the restrictions on physical meetings as a result of the coronavirus pandemic. Questions around whether electronic signatures can be relied upon to bind parties and whether original documents with ‘wet ink’ signatures need to be held in order to be able to enforce contracts in Singapore have been common, and the clear position enshrined in the ETA has been useful in supporting the ease of doing business in Singapore in these circumstances.