Hatim Q Zu’bi, Partner, Zu’bi & Partners: Viewpoint

Viewpoint: Hatim Q Zu’bi

In 2002 Bahrain was among the first GCC countries to introduce legislation regarding electronic transactions. Legislative Decree No. 28 of 2002 promulgating the Electronic Transactions Law governs a wide array of electronic transactions and includes provisions on various issues, from the legal recognition of electronic records to formalities surrounding contracts concluded online. With the rapidly evolving technological landscape, it is necessary to ask if the Electronic Transactions Law, being ahead of its time, is able to accommodate future technological development.

Despite three amendments coming into force since the Electronic Transactions Law’s initial promulgation, these changes have been minor. A prime example of this is the latest amendment, Legislative Decree No. 34 of 2017, amending certain provisions of the Electronic Transactions Law. The minor changes to Article 5 (1), amended pursuant to the 2017 amendment, have been the addition of references to the Law of Evidence in Civil and Commercial Matters and the Implementing Regulations of the Electronic Transactions Law.

Plans to modernise the Electronic Transactions Law, aligning it with international standards, are again placing Bahrain at the forefront of technological legislation in the GCC. For this purpose, the UN Commission on International Trade Law (UNCITRAL) Model Laws on Electronic Commerce and Electronic Signatures will be a basis for an overhaul of the Electronic Transactions Law. Using the internationally standardised UNCITRAL Model Laws will be a welcome development.

While the Electronic Transactions Law contains provisions on electronic signatures being regarded as equivalent to handwritten signatures, these have not yet been implemented. Under Article 6 of the Electronic Transactions Law, “use of an electronic signature shall not be denied legal effect, validity or enforceability solely on the grounds that it is wholly or partly in electronic form. Where the law requires a signature of a person, or provides for a legal effect if a document is not signed, an electronic signature of that person satisfies the requirements of this law. In any legal proceedings involving an electronic signature that is associated with an Accredited Certificate, it shall be presumed unless the parties have agreed otherwise or unless evidence to the contrary is adduced that: (i) such electronic signature is the signature of the person to whom it correlates; (ii) such electronic signature was affixed by that person to whom it correlates for the purpose of signing such electronic record; (iii) the electronic record that is signed with such signature has not been altered since the time at which the electronic signature was affixed.”

Article 16 of the Electronic Transactions Law provides in part that the minister of industry, commerce and tourism may – if satisfied that the applicant meets the relevant criteria – accord the applicant the status of an accredited certification service provider.

Unfortunately, the concerned authorities have yet to register any accredited certification service providers; therefore, documents signed electronically will not automatically benefit from the presumption of authenticity, and thus they cannot be considered to be legally equivalent to handwritten signatures.

These principles applicable to electronic transactions have created the necessary foundation on which to build more nuanced legislation. While some areas of the Electronic Transactions Law are in need of more effective implementation, the fundamentals thereof are broad enough to apply to current technology.

The challenge in implementing the UNCITRAL Model Laws will be preserving this generality so that the law will be able to encompass technological advancements that cannot yet be envisioned, while maintaining a solid framework to cater to current technology.