Smart Contract Arbitration An Effective Alternative To Traditional Arbitration Which Has Now Started To Resemble Traditional Litigation : Justice Chandrachud

Virtually joining the fourth edition of the International Conference on 'Arbitration in the Era of Globalisation' held in Dubai, Justice D.Y. Chandrachud spoke about recognising technological advancements and infusing the same into the traditional arbitration process to enhance efficiency. He commenced his address by pointing out that technology and arbitration has become inseparable in the pursuit of justice, which has become quite evident during the COVID-19 pandemic. "Technology and arbitration are so intertwined in the pursuit of justice that it is impossible to discuss either of these concepts without referring to the other."It was averred that technology makes arbitration more cost effective and efficient. Moreover, arbitration has emerged as the best mechanism to tackle complex issues pertaining to law and technology. "While technology expands the realm of arbitration making it more cost effective and efficient, arbitration is entrenching; has the best dispute resolution mechanism for the issues involving the complex interplay of the law and technology."He emphasised that though artificial intelligence and technology are widely prevalent in the modern world, law is yet to develop to cater to the disputes arising out of such technological advancements. In this backdrop, he believed, arbitration could provide a platform to resolve these issues. "Artificial intelligence and technology are slowly penetrating various walks of life. Robot driven cars, robot helpers and robot adjudicators are considered essential in the modern fast paced world. However, technological advancement is not accompanied by the development in the legal framework. This eventually leads to a situation where issues related to technology law become non-adjudicatory as there is a lack of a unified legal framework governing the field. For eg - A plea seeking damages against an accident by a robot driven car cannot be adjudicated unless the issues of personhood and accountability of artificial intelligence are settled."He referred to the concept of smart contracts to demonstrate the technological advancements in the sphere of commercial transactions. "Technology and artificial intelligence are integrated into commercial transactions. One such example of integration of technology and contracts is a smart contract, where the terms and conditions of the contract are encoded. A breach in the terms of the contract would automatically enforce the contract. For eg - if there is a clause in the contract which stipulates that the payment for rented articles must be made on the 7th of every month, then a non-payment of the rent within the stipulated time would automatically enforce the penalty clause. One example of smart contracts in the insurance sector is providing travel insurance through the smart contract so that when the transport is delayed the compensation for delay is automatically credited to the account of the insurer."He further added that given the decentralised nature of such smart contracts, it is difficult to identify the place of performance of the obligation and therefore, arbitration could be utilised to resolve disputes relating to smart contracts. Justice Chandrachud highlighted some of the advantages of arbitration, like, having no national jurisdiction; presence of specialised arbitrators and ample evidentiary flexibility, which would encourage parties to opt for arbitration over the traditional adjudication mechanism. "The detachment of arbitration from national jurisdictions; the ability to offer specialised arbitrators who are well-versed with the cutting edge technology (and our panel today is really a symbol of that);and evidentiary flexibility are some of the advantages that arbitration as a mechanism of dispute resolution holds over the traditional court system in the adjudication of technological issues."It was asserted that arbitration being a time bound exercise if resorted to in order to resolve commercial disputes, parties would incur lesser financial damages. "Since disruption in commercial transactions for a few hours can cause substantial financial damage, the key to deciding the appropriate mechanism of dispute resolution is the expedition of solving disputes and providing interim reliefs."Alluding to the effect of invoking arbitration to resolve a technological dispute involving concerns of confidentiality and financial implications, he added that such disputes can be classified into two categories - a. non-arbitrable and b. arbitrable. "Technological disputes involve confidential data and carry enormous financial implications making arbitration a well suited choice for dispute resolution. The adjudication of technology and artificial intelligence disputes can be classified into two kinds - non-arbitrable issues that are incapable of settlement of arbitration, which involves public rights and third party interest...

Smart Contract Arbitration An Effective Alternative To Traditional Arbitration Which Has Now Started To Resemble Traditional Litigation : Justice Chandrachud

Sohini Chowdhury

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Sohini Chowdhury

Smart Contract Arbitration An Effective Alternative To Traditional Arbitration Which Has Now Started To Resemble Traditional Litigation : Justice Chandrachud

Sohini Chowdhury

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Sohini Chowdhury

This is a premium content
Available exclusively to
Our subscribers