Commentary on sections of the Act Section 2: Definition of "electronic trade document" Divestibility
Section 2(2)(e) requires the document in electronic form to be divestible. This means that transfer of the document must necessarily entail a transfer both of the document and of the ability to exercise control of it (unless the person is able to exercise control by virtue of being a transferee). This feature prevents an electronic trade document from being transferred more than once by the same party, or by another party having concurrent control with the transferor– the double spend problem. Divestibility singularises the right to claim performance of the obligation recorded in the document.
	Suitable objects of property rights are necessarily divested on transfer. For physical objects, this is inherent in their material nature. For example, in the paper world, if Alice gives a paper bill of lading to Bob, Bob then has the bill of lading and Alice does not. The bill of lading is no longer in Alice’s physical possession, nor does she have factual control over it. Alice has been divested of the paper trade document and cannot purport to transfer it to Charlie. Similarly, if a paper bill of lading is in a vault and Alice and Daisy both have the passcode to the vault (and therefore concurrent control and possession of the bill of lading), if Alice were to take the paper bill of lading out of the vault and give it to Bob, both Alice and Daisy would lose factual control and possession of the document.
	The divestible nature of a paper trade document is crucial to its ability to be possessed. Section 2(2)(e) aims to replicate this feature in the electronic context by requiring that when an electronic trade document is transferred, the transferor (and any person who was able to exercise control concurrently with the transferor) is fully divested of the document. How divestibility will work in practice will largely depend on the type of electronic trade document system in question.
	Importantly, the word "transfer" in section 2(2)(e) is being used in a factual rather than a legal sense. It is intended to mean the electronic equivalent of handing over a piece of paper. It is not intended to refer to the legal process by which the transferee becomes the valid holder of the document, which may require additional elements (such as acceptance or indorsement) to be satisfied.
	The ability to retain a copy of the electronic trade document after transfer or disposal would not, in and of itself, prevent the divestibility requirement from being satisfied, and would not constitute retention of control of the document.