Bahrain ratifies key UN treaty to make electronic contracts valid

MANAMA: Bahrain has become the first country in the region to ratify a key United Nations convention that will make electronic contracts and communications valid.

The United Nations Convention on the Use of Electronic Communications in International Contracts aims to enhance commercial certainty by ensuring that contracts and other communications exchanged electronically are as valid and enforceable as their traditional paper-based equivalents.

The Model Law on Electronic Transferable Records (MLETR), developed by the United Nations Commission on International Trade Law (UNCITRAL), is a global first and will enter into force for Bahrain on January 1, 2021 which will help to enable a new wave of digital business across the region and enhance investor protections.

The principles of the treaty include defining terminology such as ‘writing’ and ‘signature’ so that all parties are legally protected when entering into a contract.

The convention also aims to remove legal obstacles to the use of electronic communications in enacting previous treaties that were first created before the widespread use of modern technology.

“To build a truly digital economy in the GCC, it is essential that our regulation keeps pace with the latest developments – particularly at a time when more and more business is being conducted in the virtual realm,” said Economic Development Board (EDB) chief executive Khalid Humaidan.

“Bahrain is leading the way on tech-driven reforms and is committed to supporting the needs of entrepreneurs and investors as they work to build long-term growth in our thriving e-commerce landscape.

“We look forward to continuing to work closely with the United Nations as we stay on the cutting edge of legislative developments.”

Bahrain became the 14th country globally to join the treaty, alongside major economies such as Singapore and Russia, and the first in the Middle East and North Africa region.

Countries that have signed but not yet ratified the convention include China, the Republic of Korea and Saudi Arabia.

UNCITRAL secretary of Working Group IV (Electronic Commerce) Luca Castellani noted that this is an important step in the legal framework for a digital economy.

“The accession of Bahrain to this treaty completes the significant work that the Bahrain government and the UNCITRAL secretariat have carried out together to provide Bahrain with a modern, efficient and effective enabling legal framework for the digital economy,” said Mr Castellani.

“I am confident that this will encourage more countries in the region and worldwide to adopt the latest UNCITRAL texts in the field.”

According to United Nations Development Programme resident representative Stefano Pettinato, Bahrain is an example on how digital technology, international law and multilateralism are enabling factors for the promotion of international trade and the achievement of the Sustainable Development Goals through greener and more efficient protocols.

It comes after Bahrain made history in November 2018 by becoming the first nation to enact legislation based on the UNCITRAL e-commerce model laws.

The move was part of a series of sweeping reforms aimed at bolstering the digital readiness of the GGC region’s $1.5 trillion economy.




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