QUASI-JUDICIAL-FUNCTION AND QUASI JUDICIAL AGENCY.pptx
Let's Get Digital! 13 September 2017
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Bryce Melville Rebecca Sheppard Yvette Mason Shona Condon Marieanne Golubinsky Mark Borg Meaghan Brodie Danika Cardon-Smith
PARTNER SENIOR ASSOCIATE ASSOCIATE ASSOCIATE GRADUATE GRADUATE PARALEGAL CLERK
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13 September 2017
Property Developments
Banks successfully trial digitising bank guarantees
ANZ and Westpac have successfully trialed
blockchain and distributed ledger technologies to
digitise the bank guarantee process for commercial
property leasing.
Why digitise?
ANZ and Westpac partnered with IBM and the Scentre
Group in April 2017 to trial whether blockchain technology
could be used to replace paper bank guarantees.
The proposal to digitise bank guarantee aims to:
▪ reduce the potential for fraud;
▪ eliminate the possibility of a lost guarantee;
▪ drive standardisation and increase efficiency for the
bank, landlord and tenant; and
▪ facilitate easier amendments to bank guarantees.
The blockchain trial and results
The parties’ whitepaper on the trial indicates that a
blockchain network was set up as a ‘proof of concept’
(POC) between the bank, landlord and tenant.
Rules for updating and maintaining the database were
then codified and embedded in each network.
Landlords and tenants could:
▪ request a new guarantee;
▪ request amendment to an existing guarantee;
▪ request cancellation of an existing guarantee; and
▪ consent to the cancellation of an existing guarantee.
Landlords could also demand payment.
Banks could:
▪ action requests from the landlord and/or tenant; and
▪ close a guarantee after payment.
The parties were also able to view summaries of their
bank guarantees and were notified at each stage of the
guarantee’s lifecycle. However, the tenant was not
notified of demands for payment until payment was
complete (to prevent the tenant from taking action to
adversely affect the landlord’s rights).
Where to from here?
The parties concluded that there is the potential to shift the
issuance of bank guarantees from a paper-based model
into a digital one, but that the proposed changes require
close collaboration with their competitors, regulators,
consumers, technologists and the legal community. We
will therefore keep you updated as this progresses!
*Disclaimer
The information contained in this update is intended as a guide only.
Professional advice should be sought before applying any of the
information to particular circumstances. While every reasonable care has
been taken in the preparation of this update, MinterEllison does not accept
liability for any errors it may contain.