Smart contracts and international commercial arbitration

Digital finance has been with us for more than a decade. It is growing at a rapid rate, and the world is experiencing a significant transition in the access to new and diverse financial products that are being made available online. This chapter discusses the ensuing legal challenges of tokens, smart contracts and international commercial arbitration. It will demonstrate how there are a number of different tokens that have been developed across various sectors such as agriculture, real-estate and intellectual property amongst others. A potential dilemma that has emerged is how when applied to transnational transactions, the law pertaining to tokens is highly fragmented and still being developed. In addition, the emergence of smart contracts that are supported by blockchain technology can facilitate token transactions, which could be subject to arbitration. Problematic though, as a smart contract is subject to arbitration, the dispute resolution clause within the contract itself will require careful consideration. Also, the code supporting the blockchain technology itself will also be challenging because a practitioner will need to understand where and when the code was installed. For instance, was the code inserted in the state where arbitration has been agreed and what the arbitration clause and agreement provides. That said, the chapter has called for more research to better understand the interconnectedness between these new technology, financial products and the existing legal framework for transnational arbitration.