New Bahrain law to regulate electronic transactions


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Decree Law No. 54 for the year 2018 on the issuance of the Electronic Communications and Transactions Law (the E-Law) was published in the Official Gazette on 29 November 2018. This repealed Decree Law No. 28 for the year 2002 on Electronic Transactions.

The implementation of the law bolsters Bahrain's digital technology framework, and cement its position as the main contender in the region. The growth of the digital sector required updated laws capable of navigating the complexities surrounding it and effecting a framework for its governance. The scope and content of the E-Law is the subject of this article.  

The E-Law

The E-Law is set to regulate electronic transactions in line with the United Nations Convention on the use of electronic communications in international contracts. It repealed its predecessor, Decree Law No. 28 for the year 2002 on Electronic Transactions.

Scope

The E-Law covers transactions of all types, insofar as they do not prejudice consumer protection laws. Blanket consent for electronic means of communications is not automatically provided through the operation of the law, but must be obtained from any counterparty either expressly or through positive conduct. In the context of public authorities, consent is subject to further resolutions of the relevant minister. 

Electronic records

The E-Law suggests that the evidential weight given to electronic documents in terms of their legal recognition is similar to that of paper documents. It does so by establishing that records are not to be denied legal effect, validity or enforceability solely on the grounds of them being electronic. 

Electronic signatures

The E-Law establishes that where a physical signature of a person would usually be required, an electronic signature of that person is satisfactory in its place. The authenticity of the electronic signature shall be subject to the court's assessment of the method used in producing the signature as "trusted". Factors that may be taken into account when carrying out such an assessment may include:

  • exclusive access and use of the records;
  • the security measures of the host software and hardware;
  • an independent audit of the method or system and the extent of such audit;
  • certificates from a relevant administrative body; and
  • relevant agreements between the parties.

Secure certificate provider

When providing signatures or relying on electronic records, the use of a secure certificate provider can go towards ensuring their validity and reliability. The following are considered under the law as presumptions unless proven otherwise, in which case the burden of proof lies on the party arguing against the presumption:

  • if an electronic record is signed using a secure electronic signature certificate provider:

a) the electronic signature on the electronic record belongs to the person signing;

b) the electronic signature on the electronic record was made by the person signing using said secure certificate provider; and

c) the electronic record has not been changed or amended from the moment of electronic signature;

  • if an electronic record has been sealed using a secure certificate provider, there is a presumption of the integrity and authenticity of the origin of the electronic record;
  • if an electronic record has been time stamped using a secure certificate provider, there is a presumption that the date and time of the electronic record are accurate; and
  • if an electronic record has been sent using a secure electronic delivery service provider, there is a presumption of safe delivery and receipt by the recipient at the date and time of delivery.

Conclusion

The E-Law, in addition to other recently implemented digital laws such as the Decree Law No. 56/2018 on the Provision of Cloud Computing Services to Foreign Parties, are set to pave the way for Bahrain to become a regional example of technology regulation readiness. Our teams are equipped, through our experience to date, to navigate such frameworks. Insight on other related laws, such as the PDPL, can be found on our website.

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