Is arbitration the best way to resolve blockchain-based disputes?

By Yves Faguy March 6, 20186 March 2018

Is arbitration the best way to resolve blockchain-based disputes?

Will smart contracts really replace traditional legal agreements and courts with code?

Charlie Morgan discusses blockchain’s application to contract formation and execution, and warns that the challenge is in ensuring that rights and obligations contained in smart contracts have a sound legal basis and can be enforced in the real world.  Indeed, the potential for disputes remains very real.

Morgan then explores whether arbitration will become the forum of choice for resolving blockchain-based disputes:

Arbitration is a non-national and neutral dispute resolution forum which enables parties to nominate a tribunal of industry or technical specialists to efficiently and effectively resolve the different types of disputes that may arise from their relationship (which, as mentioned above, may include real world as well as digital world disputes, in each case ranging from a simple contract law claim to claims of a highly technical and complex nature).

The relative ease of cross-border enforcement of awards under the New York Convention also gives arbitration a huge advantage in the context of blockchain disputes, given the transnational nature of this technology and of the players involved in blockchain transactions.

But arbitration also offers a further material benefit in this context, compared to court litigation. Indeed, the inherent flexibility of the arbitral process (its procedure being tailored in material respects by the parties’ agreement) enables efficient conflict management approaches to be developed and for the dispute resolution process itself to harness the benefits of blockchain technology. This means that arbitration has the potential to keep pace with a new breed of disputes.

 

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Comments
Bob Seeman 3/20/2018 4:20:50 PM

“Will smart contracts really replace traditional legal agreements and courts with code?”

No, not before most lawyers can read and write computer code and, thus, give advice and an opinion on the contract. That is: never.

However, everything will speed up considerably if smart contracts can be written in English with systems being developed by companies like iOlite.io.



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