Resolving Smart Contract Disputes Through Blockchain Arbitration

The 2020 pandemic accelerated the tech revolution around the world, particularly in relation to commercial transactions; the borders of most nations were closed due to the pandemic, thus increasing the use of Blockchain technology in commercial transactions and the proliferation of smart contracts. A distinctive feature of a smart contract is its ability to be self-executory. However, as Sophie Nappert observed, where there are human minds transacting, whether ‘on-chain’ or ‘off-chain’, there will always be disputes. This paper finds that, due to the sue generis nature of smart contracts, off-chain systems of dispute resolution are not adaptive to the characteristics of Blockchain transactions or to disputes arising out of smart contracts, thus indicating the need for Blockchain arbitration. This paper discusses some of the legal impediments and implications that come with Blockchain arbitration and the need for Blockchain arbitration to be adapted to some of the principles that guide off-chain dispute settlement so as to make it a fair system of dispute resolution. The paper argues that Blockchain arbitration is a sue generis system of dispute resolution, which draws its authority from the Lex cryptographia legal order, and as such, need not be subjected to the legal authority of any nation. Accordingly, this paper, while examining the legal and tech perspective of Blockchain awards, advocates for the recognition of this new form of decentralized arbitration and suggests a real-world regulation of the legal order contained in the Blockchain.