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New Digital Dispute Resolution Rules provide procedure for commercial disputes involving digital technology

New Digital Dispute Resolution Rules provide rapid and inexpensive procedure for commercial disputes, particularly those involving digital technology such as cryptocurrency, smart contracts and blockchain technology.

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Published 28 June 2021

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  • Financial services

The UK Jurisdiction Taskforce (chaired by Sir Geoffrey Vos, Master of the Rolls) has recently published the country’s first Digital Dispute Resolution Rules (“Rules”).

A full copy of the Rules is available here.

The Rules aim to provide a rapid and inexpensive dispute resolution procedure for commercial disputes, particularly those involving digital technology such as cryptocurrency, smart contracts and blockchain technology.

They can be incorporated into any contract or digital asset system by including the following text (which may also be electronically encoded): “Any dispute shall be resolved in accordance with UKJT Digital Dispute Resolution Rules”.

Arbitration or expert determination

Disputes under the Rules are dealt with by arbitration or expert determination, depending on the context. The tribunal of arbitrators or experts is appointed in each case by the Society for Computers and Law (“Society”).

Speed and flexibility

A claimant may commence proceedings by giving each interested party a notice of claim that includes brief details of the dispute. The respondent has 3 days to reply, following which the Society will appoint an arbitrator (or expert).

Unlike in traditional arbitration, the Rules allow maximum procedural flexibility, so that the proceedings can be tailored to the distinctive features of the digital technology in question. The arbitrator has absolute discretion as to what procedure is adopted, including what evidence and argument it will receive. There are no rights to an oral hearing and the tribunal may (if it considers it appropriate) determine the dispute on the basis of written submissions only.

Anonymity

In the spirit of digital asset ownership, the Rules provide an option for anonymity (including vis–à-vis other parties in the dispute), although each party must provide details and evidence of their identity to the reasonable satisfaction of the arbitral tribunal. This reflects the fact that parties may have transacted anonymously on a blockchain in the first place.

Remedies and enforcement

As in ordinary court proceedings, the arbitrator can award compensation, order a party to do or refrain from doing anything, or can set aside, rectify, or cancel a document.

Parties can also give the tribunal any necessary private keys or passwords at the outset, which would enable the arbitrator to directly implement their decision “on-chain”. This could, for example, include operating, modifying, cancelling or transferring digital assets.

Any arbitral award under the Rules would be recognised and enforceable in over 165 countries that signed up to the New York Convention in 1958.

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Shorter Reads

New Digital Dispute Resolution Rules provide procedure for commercial disputes involving digital technology

New Digital Dispute Resolution Rules provide rapid and inexpensive procedure for commercial disputes, particularly those involving digital technology such as cryptocurrency, smart contracts and blockchain technology.

Published 28 June 2021

Associated sectors / services

  • Commercial disputes
  • Financial services

Authors

The UK Jurisdiction Taskforce (chaired by Sir Geoffrey Vos, Master of the Rolls) has recently published the country’s first Digital Dispute Resolution Rules (“Rules”).

A full copy of the Rules is available here.

The Rules aim to provide a rapid and inexpensive dispute resolution procedure for commercial disputes, particularly those involving digital technology such as cryptocurrency, smart contracts and blockchain technology.

They can be incorporated into any contract or digital asset system by including the following text (which may also be electronically encoded): “Any dispute shall be resolved in accordance with UKJT Digital Dispute Resolution Rules”.

Arbitration or expert determination

Disputes under the Rules are dealt with by arbitration or expert determination, depending on the context. The tribunal of arbitrators or experts is appointed in each case by the Society for Computers and Law (“Society”).

Speed and flexibility

A claimant may commence proceedings by giving each interested party a notice of claim that includes brief details of the dispute. The respondent has 3 days to reply, following which the Society will appoint an arbitrator (or expert).

Unlike in traditional arbitration, the Rules allow maximum procedural flexibility, so that the proceedings can be tailored to the distinctive features of the digital technology in question. The arbitrator has absolute discretion as to what procedure is adopted, including what evidence and argument it will receive. There are no rights to an oral hearing and the tribunal may (if it considers it appropriate) determine the dispute on the basis of written submissions only.

Anonymity

In the spirit of digital asset ownership, the Rules provide an option for anonymity (including vis–à-vis other parties in the dispute), although each party must provide details and evidence of their identity to the reasonable satisfaction of the arbitral tribunal. This reflects the fact that parties may have transacted anonymously on a blockchain in the first place.

Remedies and enforcement

As in ordinary court proceedings, the arbitrator can award compensation, order a party to do or refrain from doing anything, or can set aside, rectify, or cancel a document.

Parties can also give the tribunal any necessary private keys or passwords at the outset, which would enable the arbitrator to directly implement their decision “on-chain”. This could, for example, include operating, modifying, cancelling or transferring digital assets.

Any arbitral award under the Rules would be recognised and enforceable in over 165 countries that signed up to the New York Convention in 1958.

Associated sectors / services

  • Commercial disputes
  • Financial services

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