Dispute Resolution on Blockchain: An Opportunity to Increase Efficiency of Business Dispute Resolution?

Abstract

With the advent of blockchain technology and smart contracts, the finance, business, and legal industries have witnessed a drastic shift in their modus operandi. A smart contract does not necessarily mean and include a legally binding contract as it is under the legal regime but is instead a computer software built on blockchain technology, which is competent to self-execute its functions, as well as self-enforce its results. Smart contracts with the help of complex algorithms have raised the efficiency of conducting business online. Consequently, disputes pertaining to smart contracts have also increased. The utilization of smart contracts in the legal industry has assisted businesses in maintaining the efficiency gained in the initial phase of the process and resolving their smart contract and/or other disputes expeditiously. The pivotal question that knocks on our door is whether a decision rendered by an autonomous computer program is binding on the parties, specifically an award rendered in a smart contract arbitration? This article explores rudimentary knowledge pertaining to blockchain and smart contracts, and analyses the validity of smart contract dispute resolution mechanisms and their role in enhancing business dispute resolution efficiency. Lastly, it sheds light on the legitimacy of smart contract arbitration under the international conventions which regulate international commercial arbitration.