Conflict-Of-Law and "Non Law" Renovation of the Lex Mercatoria, Smart Contracts and Blockchain Arbitration

Abstract

The central institute of private international law — conflict of law — in the modern globalization and information context is evolving, which is largely due to the paradigm shifts in law, laid down and developed based on international commercial arbitration. The widely interpreted concept of «rules of law» actualizes a completely new view of conflicting arrays of rules: the law of the state and the system of non-state regulators. The medieval lex mercatoria, revived in the XX century, is modernized by cyberspace, acquires a new sound in the form of e-merchant or lex informatica, especially in the context of the parallel development of smart contracts and new decentralized forms of dispute resolution, one of which is blockchain arbitration. In particular, the issues of conflict of law, traditional for cross-border transactions, arise in relation to smart contracts, which, using blockchain technology, are inherently linked to several jurisdictions. It is important to reflect on the questions of applicability of traditional conflict-of-laws bindings to the regulation of relevant relations, including through forecasting the practice of choosing the law of a state, the substantive rules of which are adapted to the use of new technologies, or recourse to the rules of non-state regulation.

Transformation of the principles of international private law in the digital age

“…The problems of determining the place of conclusion of a smart contract, the place of execution, and the law of the country with which it is most closely connected are especially characterized for such contracts. The distributional nature of the obligation contained in the smart contract implies the application of the personal law of each of the participants equally, as well as the participant of the blockchain [2]. Therefore, the traditional principles (the principle of conflict of laws regulation; the principle of autonomy of the will of the parties, based on the conflict of laws principle of determining the applicable law lex voluntatis; the principle of dispositivity, which implies the possibility of excluding the application of certain norms of international treaties and international customs; as well as the principle of combining state and non-state forms of regulation of international private law relations, which consists in the possibility of using business practices in order to regulate contractual relations, that is, the so-called "routine order" that operates over a long period (lex mercatoria)) as the basis of legal regulation in relation to smart contracts, they are transformed into one general principle of automated determination of a more favorable right for a smart contract and autonomous supranational regulation.…”

“…In practice, the parties to smart contracts, in accordance with the principle of autonomy of will, often choose the most preferred legal systems that are most favorable to smart contracts. But if the nodes of the distribution registry network are located in the zones of different jurisdictions, there is a splitting of the treaty statute, which makes it much more difficult to choose the applicable law [2]. Building a strict algorithm for formulating the terms of a smart contract makes this process easier and faster, and also allows you to solve the conflict of laws problem.…”

“…The fundamental postulates, and, above all, the principles of international private law, do not find their expression in the traditional understanding. The problems of doctrinal formulation, legal consolidation of the principles of international private law, and the use of digital technologies in the field of international private law relations are paid attention both in domestic science [1][2][3]and in foreign studies [4][5][6].…”

Interdisciplinary approach by IT-technologies implementation into the civil procedure

“…Law, as the main civilized society regulator, is rapidly losing its position under the influence of technological development. In the legal science, questions are already being raised that are very radical for the fundamental legal knowledge: on the preservation of the main theoretically highlighted legal features [1], on the phenomenon of simultaneously expressed public and private tending legal trends [2], on the mixing of private public legal regulation methodology in course of a digital economy creation [3], on the formation of an autonomous, competing or even equated to positive law, system of norms called cyber law [4].…”

The Right To Freedom Of Speech: Evolution In The Digital Age

“…The specified agreement, as a rule, defines all the most important rules for registration, use and termination of the user's account, while the user independently determines the boundary of his own behavior only within the limits allowed by these rules (Kirsanova, 2020). In addition, the basic rules set by default by the technologies used in the social network (the so-called lexinformatica) play an essential role in regulating the possible actions of the user (Amelin & Channov, 2020;Majorina, 2019;Reidenberg, 1998).…”