Asides the technical
inhibitions in the complete adoption of blockchain (such as technical know-how,
space for retention of data, protection of confidential information, etc.),[1]
blockchain is not currently used in all earnest for offline commercial
international transactions due to the legal ambiguities; some of which have
been previously hinted on and addressed earlier on in this work. The legal
uncertainties span from the questionability of the legality of a smart
arbitration contract (and if it falls under the ambit of forced consent of
parties who decide to use blockchain as an online platform) to the
enforceability of the arbitral awards. Thus, the legal uncertainties arise from
the initiation of the arbitration agreement through blockchain, to the
recognition of the award by the State. This work will however, limit itself to
the ambiguities to the applicable law of arbitral proceedings (lex situs) and the practicability of
the enforcement of the award.

Situs in Blockchain Arbitration

An essential and admirable
feature of Blockchain is its decentralised nature, as it operates on a
peer-peer operational system, above any regulatory authority.[2]
This, however, poses a legal uncertainty as to the governing law applicable to
the international commercial dispute, also referred to as lex situs. Most
international arbitration statutes recognise this, as provided in Article 14 of the International Chamber of
Commerce (ICC) Arbitration Rules[3]
and Article 16 of the London Court of International Arbitration (LCIA)
Arbitration Rules
.[4]  This position is recognised in the case of Hiscox
v. Outhwaite
[5] where the House of Lords held that the
seat of the award is where the contract was signed. The seat of arbitration
will determine the level of State intervention into the arbitration process
(concerning the arbitration theory employed by the State) and the arbitrability
of the subject matter (as was held in the case of Soleimany v. Soleimany[6]).
The seat of arbitration also determines the degree to which the arbitral award
can be challenged.


Legal jurists hence have
criticised the practicality of the use of blockchain as a platform of online-
arbitration as Smart Contracts are enabled through distributed nodes, which cut
across multiple legal jurisdictions, especially on instances of international
contracts, consequently obfuscating the actual lex situs.[7]
In rectifying this uncertainty, scholars have proposed that the arbitrators can
apply the principle of ex aequo et bono by resolving the
dispute on what is deemed fair and just, on instance of no clear applicable
Hence, arbitrators in blockchain assume the powers of amiable compositeur[9]
to carrying out their duties. This position has been criticised due to the very
nature of the technology itself, as it excludes parties through “forced
from expressly vesting arbitrators the powers to apply the principles of ex
aequo et bono


Another theory proposed by
legal jurist is the adoption of the jurisdiction of the Fifth party in the
arbitration agreement (referencing the provider of the online-arbitration
service) as the lex situs of the
dispute.[12]  This theory proposes that the service
provider maintain a degree of responsibility as owners and maintainers of the
service, and therefore can be accorded the appropriate seat of arbitration.[13]
This position has been given judicial credence in the cases of re
Tezos Securities Litigation
[14] and Alibaba Group Holdings Ltd v.
Foundation et al[15]
where the U.S Courts, in determining issues relating to cryptocurrency and
blockchain, held inter alia that ‘the physical location of the verifying nodes’
is an important factor in determining the jurisdiction of the court.[16]
This writer finds this theory persuasive, as it provides a practical resolution
to this legal debacle.


of the award.

As stated earlier, the New
York Convention stipulates in Article V
the prerequisites of a valid arbitral award, stating that it must written for
it to be recognised and enforced in another State.[17]
This is necessary because the enforcement of an award requires judicial
assistance of the State where the award is to be recognised.[18]
States are empowered to decline enforcement of an award in its jurisdiction on
the ground of public policy. Blockchain, however, provides an automatic
execution of the arbitral award through Smart Contracts for online disputes
relating to cryptocurrencies.[19]

Advocates for the inclusion
of blockchain argue that this is a redeeming factor of the technology, as it is
an effective and practical implementation of the award without encumbrances.[20]
This has been criticised by legal scholars who are of the view that this is a
deviation from traditional commercial practice as it automatically enforces the
award (this mostly involves the transfer of cryptocurrencies from one wallet to
the other) by bypassing the public policy position of the State.[21]
This school of thought also argue that such an enforcement will disregard the
principle of favor debitoris[22]
which protects the interests of the debtor of the award to ensure his
rights are not violated in enforcement.[23]



As contractual relations
become autonomous through novel technological platforms, the role of dispute
resolution is also expected to adopt to the changes. The procedure of ‘old
wine, new bottle’ approach proposed by traditionalists is ill fitted here, as
with new frontiers comes new challenges. An example is the blur of boundaries
between procedure and execution in Smart Contracts. As legal jurists propose,
the use of blockchain creates more problems than it actually aims to resolve
due to its uncertainties from its ambiguous definition to concept of

Regardless of legal
skepticisms, Blockchain has been adopted as an ODR platform to resolve online
disputes concerning cryptocurrencies. This, however, has not been implemented
into offline transactions despite its numerous advantages. Reasons for this are
not farfetched, as blockchain is riddled with legal uncertainties. The
technology has been related to the Wild West where there exists little or no
regulations, and all innovators are in a virtual race to the most reliable.[25]
This writer, however, opines that this is a necessary process to streamline the
technology into a more favorable legal platform. Traditional commercial
practice emerged through centuries of practice by traders, referred to as lex
This organic evolution is also the essential trigger of the internationally
accepted concept of arbitration. This legal Darwinism is essential for
regulation standards that are intricately interwoven with Blockchain and its
services, as not all old wines fit into new bottles. This is essential because
the proposals from jurists that Blockchain should be ‘centre-regulated’ negates
the entirety of the technology itself, as it operates on a decentralised,
peer-to-peer assessed medium.

This writer agrees with the
suggestion of the use of the ‘Oracle’[27] in
the blockchain platform to serve as an interface between the technology and the
real world, to reflect the data and agreements of parties that are not encoded
into the Smart Contract.[28]
This can include parties’ agreement on the use of arbitrators on instance of
conflict, choice of law applicable, seat of arbitration and the enforcement
These updates can act as the necessary restrictions of the automatic nature of
Blockchain during arbitral proceedings, making it more suitable to resolve
offline commercial issues, resolving most of the highlighted legal issues.

In conclusion, blockchain is
relatively a new technology, and the extent of its potential, either alone or
mixed with another sector such as arbitration, are currently unknown. The
unknown, however, will so remain, if depths are not pushed. Blockchain will
revolutionise the commercial world, and as consequence, the legal world as






  1. Alibaba
    Group Holdings Ltd v. Alibabacoin Foundation et al No. 18-02897, Southern
    District of New York
  2. Hiscox
    v. Outhwaite [19911 2W.LR. 1321 (C.A.)
  3. re
    Tezos Securities Litigation 17-CV-06779-RS,D.N.D.Cal.
  4. Soleimany
    v. Soleimany [ [1999]  3  All 
    ER 847




  1. United
    Nations Convention on the Recognition and Enforcement of Foreign Arbitral
    Awards of 1958, 330 UNTS 38
  2. United
    Nations Commission on International Trade Law [UNCITRAL Model law on
    International Arbitration UN Doc A/40/17, Annex I




  1. Bercovitch
    J, Kremenyuk V, Zartman W I. ‘The SAGE Handbook of Conflict Resolution’,
    (1st edn,  SAGE, 2008)
  2. Duchateau
    M et aul, Evolution in Dispute Resolution : From Adjudication to ADR
    (Governance & Recht), (Eleven International  Publishing, 2016
  3. Fiadjoe
    A, Alternative Dispute Resolution; A Developing World Perspective (Taylor
    & Francis Group, 2004)
  4. Katsh
    E and Rifkin J, Online Dispute Resolution: Resolving Conflicts in
    Cyberspace, (Wiley, 2001)
  5. Laudon
    K C, E-Commerce: Business. Technology. Society, (13th edn, Harlow: Pearson,
  6. Newcombe
    A and Paradell L, Law and Practice of Investment Treaties: Standards of
    Treatment, (Kluwer Law, 2009)
  7. Reisman
    W. M et al, International Commercial Arbitration, (2nd edn, West Academic,
  8. Solovay
    N and Reed C K, The Internet and Dispute Resolution: Untangling the Web,
    (Law Journal Press, 2003)
  9. Vide
    CR, Favor Debitoris: Ana´lisis Crı´tico (Temis, Madrid 2010).



  1. Dahiyat
    E A R, ‘A Legal Framework for Online Commercial Arbitration in UAE: New
    Fabric but Old Style, (2017) 26 ICTL 272
  2. DiMatteo
    L A and Poncibo C, ‘Quandary of Smart Contracts and Remedies: The Role of
    Contract Law and Self-Help Remedies’ (2018) 26 European Review of Private
    Law 805.
  3. Ebner
    N and Zeleznikow J, ‘No Sheriff in Town: Governance for Online Dispute
    Resolution : Governance for Online Dispute Resolution’, (2016) 32
    Negotiation Journal 297
  4. Exon
    S N, ‘Ethics and Online Dispute Resolution: From Evolution to Revolution’,
    (2017) 32 Ohio St. J. on Disp. Resol. 609, 616
  5. Goldenfien
    J and Leiter A, ‘Legal Engineering on the Blockchain: ‘Smart Contracts’ as
    Legal Contract, (2018) 29 Law Critique 141
  6. Gurkov
    A, ‘Blockchain in Arbitration Development: Multi-Signature Wallet
    Showcase’ (2018) 2 IJODR 63
  7. Johnson
    M E and Loone P, ‘ Court’s second ’07
    ADR case challenges arbitrator supremacy’, (2008) 26 Alternative DR,  5
  8. Katsh
    E, Rifkin J and Gaitenby A, ‘E-Commerce, E-Disputes and EDispute
    Resolution: In the Shadow of “eBay Law”’, (2000) 15 OMiO ST. J.
    DiSp. RESOL. 705
  9. Lainer
    T J, ‘Where on Earth Does Cyber-Arbitration Occur? : International Review
    of Arbitral Awards Rendered Online, (2000) 7 ILSA Journal of International
    & Comp. Law, 1
  10. Low
    K F K and Mik E, ‘Pause The Blockchain Legal Revolution’, (2020) 69 ICLQ
  11. L.Q
    H, ‘Online Dispute Resolution Systems: The Future of Cyberspace Law’,
    (2001) 41 SCLR 354
  12. Mania
    K, ‘Online Dispute Resolution : The Future of Justice,’(2015) 1, ICJ, 76
  13. Micheler
    E and Heyde Lv, ‘Holding, Clearing and Settling Securities Through
    Blockchain/Distributed Ledger Technology: Creating an Efficient System by
    Empowering Investors’, (2016) 11 J. Int’l Banking & Fin. L. 652, 653
  14. Mik
    E, ‘Smart Contracts: Terminology, Technical Limitations and Real World
    Complexity, Law, Innovation and Technology’, (2017) 9 LITJ 269, 280
  15. Ortolani
    P, ‘Self-Enforcing Online Dispute Resolution: Lessons from Bitcoin’,
    (2016) 36 OJLS, 602
  16. Ortolani
    P, ‘The Impact Of Blockchain Technologies And Smart Contracts On Dispute
    Resolution: Arbitration And Court Litigation At The Crossroads’, (2019) 24
    Unif. L. Rev, 430
  17. Rabinovich-Einy
    O and Katsh E, ‘Digital Justice: Reshaping Boundaries in an Online Dispute
    Resolution Environment’, (2014) 1 IJODR 5.
  18. Shaikh
    Z A and Lashari I A, ‘Blockchain Technology the New Internet’, (2017) 6
    IJMSBR 4
  19. Shehata
    I, ‘Three Potential Benefits of Blockchain for Arbitration’, (2018) 31 YAR
  20. Smith
    S S, ‘Implications of Next Step Blockchain Applications for Accounting and
    Legal Practitioners: A Case Study’, (2018) 12 AABFJ 78
  21. Xuhui
    F,  ‘Recent ODR Developments in
    China’, (2017) 2 IJOR 35
  22. Young
    B, ‘World Wrestling Federation Entertainment Inc. v. Michael Bosman:
    ICANN’S Dispute Resolution: ICANN’S Dispute Resolution Policy at Work’,
    (2000) 3 I N.C.J.L & Tech
  23. Yu
    H, ‘A Theoretical Overview of the Foundations of International Commercial
    Arbitration’, 2008, 1(2) CONTEMP.ASIA ARB. J. 255




  1. Ashish
    Chugh, ‘Why We Don’t Need Blockchain to Manage Cases in International
    Arbitration’, (Kluwer Arbitration, 2018)

    Why We Don’t Need Blockchain to Manage Cases in International Arbitration

    accessed 10th April 2020.

  2. Association
    for International Arbitration, ‘Electronic Consumer Dispute Resolution’,
    (Arbitration-Adr, 2020)
    accessed 1st April 2020.
  3. BENOAM,
    (Benoam, 2020) accessed 8th April 2020
  4. Chamber
    of Digital Commerce, ‘“Smart Contracts” Legal Primer Why Smart Contracts
    Are Valid under Existing Law and Do Not Require Additional Authorization
    to Be Enforceable’ (Digital Chamber, January 2018),  accessed 8th April 2020.
  5. Chris
    Skinner, ‘The Wild West of Crypto’, (The Finanser, 2019)
    accessed 10th April 2020
  6. Chandru
    Ganesh, ‘Arbitration as a Dispute Resolution Mechanism for the Domain Name
    System’, (WIPO, 1999) accessed 8th
    April 2020.
  7. Civil
    Justice Council, ‘Online Dispute Resolution for Low Value Civil Claims,
    (UK Judiciary, 2915)   accessed 8th April 2020.
  8. Crunchbase,
    ‘eQuibbly’, (Crunchbase, 2012) accessed 9th April 2020
  9. ebay,
    ‘Dispute Resolution Overview’, (eBay, 1995),  accessed 8th April 2020
  10. Emmanuel
    Gaillard, ‘Transcending National Legal Orders for International
    Arbitration’, (ICCA, 2013)
    accessed 10th April 2020
  11. Fabian
    Frank, ‘Consent Management on the Ethereum Blockchain’, (Univeristy of
    Twente, 2018) accessed 10th
    April 2020
  12. Fredrik
    Milani, ‘Blockchain Oracles’, (University Of Tartu, 2019)
    accessed 11th April 2019
  13. FINRA,
    ‘Arbitration Process’, (Finra, 2014) accessed 9th
    April 2020
  14. Graham
    Ross, ‘Challenges and Opportunities in ODR’, (Mediate, 2003) accessed 9th April 2020
  15. Ibrahim
    Shehata, ‘Arbitration of Smart Contracts Part 2- Recommendations for the
    Future Landscape Smart Contracts’, (Kluwer Arbitration, 2018)

    Arbitration of Smart Contracts Part 2 – Recommendations for the Future Landscape of Smart Contracts

    accessed  8th April 2020

  16. ICC,
    ‘Arbitration Rules’, (ICC, 2017)

    2021 Arbitration Rules

    accessed 9th April 2020

  17. ICANN,
    ‘Domain Name Dispute Resolution Policies’, (ICANN.ORG, 2020) accessed 8th
    April, 2020
  18. Internet-ARBitration,
    (Net-ARB, 2005) accessed 8th April 2020
  19. Ihab
    Amro, ‘Online Arbitration in Theory and in Practice: A Comparative Study
    in Common Law and Civil Law Countries’, (Kluwer Arbitration, 2019)
    accessed 8th April 2020
  20. Jelena
    Madir, ‘Smart Contracts: (How) Do They Fit Under Existing Legal
    Frameworks?’, (SSRN, Dec 2018)  accessed 8th April 2020 
  21. LCIA,
    ‘LCIA Arbitration Rules’, (LCIA, 2014)
  22. Michael
    Crosby et al, ‘BlockChain Technology: Beyond Bitcoin’, (Berkeley,
    accessed 8th April 2020
  23. Osinachi
    Nwandem Victor, ‘Online Dispute Resolution: Scope And Matters Arising’,
    (Elsevier, 2015),
    accessed 8th April 2020
  24. Satoshi
    Nakamoto, ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ (Bitcoin 2008) accessed 9th April 2020
  25. Stephan
    W. Schill, ‘Lex Mercatoria’, (OPIL, 2014)
    accessed 10th April 2020
  26. SquareTrade,
    (Square Trade, 2020) accessed 9th April 2020
  27. The
    Mediation Room, (the Mediation room, 2020) accessed 8th April 2020
    ‘Technical Notes on Online Dispute Resolution’, (UNCITRAL, 2020)
    accessed 3rd April 2020
  29. WIPO,
    ‘Alternative Dispute Resolution’, (WIPO, 2020), accessed 8th April 2020
  30. WIPO,
    Guide to the Uniform Domain Name Dispute Resolution Policy (UDPR), (WIPO,
    2020) accessed 28th March 2020
  31. US
    Census Bureau, ‘E-stats’, (Us Department of Commerce, 2019) , accessed 8th April, 2020




Graham Ross, ‘Challenges and Opportunities in ODR’, (Mediate, 2003)
accessed 9th April 2020

Supra 82

ICC, ‘Arbitration Rules’, (ICC, 2017)
accessed 9th April 2020

[5] [19911
2W.LR. 1321 (C.A.).

[6] [1999]  QB 
785,  [1999]  3 
All  ER 847

Ibrahim Shehata, ‘Arbitration of Smart Contracts Part 2- Recommendations for
the Future Landscape Smart Contracts’, (Kluwer Arbitration, 2018)
accessed  8th April 2020.

Supra 67

[9] Certain
arbitration rules operate an even more subtle distinction, providing that the
arbitral tribunal decides, if the parties so agree, in amiable composition or
“ex aequo et bono“, i.e., “from what is good and just” (see, e.g., Article
21(3) of the ICC Rules or 35(2) of UNCITRAL Rules.

Forced Consent because parties are unable to negotiate the terms of acceptance
with the arbitrators. For further reading on forced consent in blockchain
technology : Fabian Frank, ‘Consent Management on the Ethereum Blockchain’,
(Univeristy of Twente, 2018)
accessed 10th April 2020

Alexander Gurkov, ‘Blockchain in Arbitration Development: Multi-Signature
Wallet Showcase’ (2018) 2 IJODR 63

Chandru Ganesh, ‘Arbitration as a Dispute Resolution Mechanism for the Domain
Name System’, (WIPO, 1999)
accessed 8th April 2020.

Supra 93

[14] 17-CV-06779-RS,D.N.D.Cal.

[15] No.
18-02897, Southern District of New York


Supra 9

Supra 93

Jake Goldenfien and Andrea Leiter, ‘Legal Engineering on the Blockchain: ‘Smart
Contracts’ as Legal Contract, (2018) 29 Law Critique 141

Supra 9

Supra 9

Carlos Rogel Vide, Favor Debitoris: Ana´lisis Crı´tico (Temis, Madrid 2010).

Supra 9

Kelvin F. K. Low and Eliza Mik, ‘Pause The Blockchain Legal Revolution’, (2020)
69 ICLQ 135

Chris Skinner, ‘The Wild West of Crypto’, (The Finanser, 2019)
accessed 10th April 2020

[26] The
term lex mercatoria or law merchant is used to designate the concept of an
a-national body of legal rules and principles, which are developed primarily by
the international business community itself based on custom, industry practice,
and general principles of law that are applied in commercial arbitrations. For
further reading: Stephan W. Schill, ‘Lex Mercatoria’, (OPIL, 2014)
accessed 10th April 2020.

[27] Fredrik
Milani, ‘Blockchain Oracles’, (University Of Tartu, 2019)
accessed 11th April 2019


Supra 93.