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The Abu Dhabi Global Market (ADGM), the financial free zone in Abu Dhabi, has enacted the Electronic Transactions Regulations 2021. The implementation of specific legislation regulating electronic dealings in the ADGM means that ADGM’s regulatory framework is now more in line with international best practice in relation to e-commerce and electronic dealings.
Previously, the ADGM’s laws had only addressed electronic transactions in a limited manner. By way of example, the company regulations allow various documents and communications by electronic means and the court regulations refer to “writing” as including electronic means. In addition, there were certain protections under English common law around the formation of contracts adopted through the Application of English Law Regulations 2015 (although the UK Uniform Electronic Transactions Act was not one of English statutes that were expressly adopted to apply in the ADGM).
The Regulations are based on the United Nations Commission on International Trade Law (UNCITRAL) Model Laws on: (1) Electronic Commerce (1996); (2) Electronic Signatures (2001); and (3) Electronic Transferable Records (2017).
This means that the Regulations adhere to internationally recognised principles of non-discrimination, technological neutrality and functional law equivalence of electronic documents as compared to documents in a tangible written form. Further the Regulations provide a technical reliability criteria for equivalence between e-signatures and handwritten signatures.
Significantly, the ADGM is now one of only a few jurisdictions in the world to have enacted legislation to allow the use of transferable documents and instruments (such as bills of lading, bills of exchange, promissory notes and cheques) in electronic form.
Another interesting aspect of the law is that it provides for the electronic witnessing of documents. Where an enactment requires a witness to a signature of a person, that requirement can be satisfied if the witness is able to observe the affixing of the signature of that person on the document or record in real-time by audio-visual electronic means.
The Regulations expressly do not apply to legal requirements for writing or signatures in respect of: (1) powers of attorney; (2) wills, codicils or testamentary trusts; (3) certain real estate transactions (including a lease for a term of more than 10 years); or (4) any document to be notarised before a notary public.
The Regulations are an important part of reforms being made by the ADGM addressing digital transformation in that jurisdiction. In the last month the ADGM also enacted the Data Protection Regulations 2021.
If you have any questions about the Regulations, please do not hesitate to contact us.
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