A Legal Issue of Electronic Bills of Exchange

Abstract

This research aims to study backgrounds and development of bill of exchange, its theories, rules of laws governing an Electronic Bill of Exchange and other concerned regulations in Thailand and overseas; and to conduct an analysis on, and a summary of, legal issues pertaining to the Electronic Bill of Exchange as well as to propose solutions thereto.

    According to the research, it found that the Electronic Bill of Exchange is not a bill of exchange from a legal perspective of the Civil and Commercial Code, Book III, Title XXI, rather it is an instrument per a trade-customary basis or another written form of electronic records.  A contract of Electronic Bill of Exchange is an innominate contract of one kind, a transfer of which constitutes an assignment of claims per the Civil and Commercial Code’s Section 306.  The jurisprudence ‘Nemo dat qui non habet’ does not grant protection over a bona fide transferee and any obligations therebetween shall follows the general principles of law.  There exists no correlation between original obligations and obligations under Electronic Bill of Exchange whereas an execution of Electronic Bill of Exchange does in not cause the original obligations to extinguish – hence resulting in a legal gaps.  From such an analysis derives a finding that the contract of Electronic Bill of Exchange is a negotiable instrument originated from customary practices in trades, also a negotiable instrument of another category distinct from bill of exchange.

Therefore, the research proposes to adopt a principle under the UNCITRAL Model Law on Electronic Transferable Record: ETR, for enactment as an internal legislation supplementing the Electronic Transaction Act as Chapter 2/2 regarding Electronic Transferable Record.  By excluding from the general principle of legal obligations about “claims over obligations performable per order and claims over obligations performable towards holder”, the problem as to the enforcing effect under the Civil and Commercial Code regarding obligations would thus be solved.

Apart from the aforementioned is an amendment to the Civil and Commercial Code, so that the original obligations underlying the contract of Electronic Bill of Exchange become extinguishable, by adding in the Civil and Commercial Code’s Section 321, paragraph 3, a term of either “electronic bills” or “electronic transferable record”.