In the rapidly evolving digital landscape, cryptocurrencies have emerged as disruptive sources, revolutionizing traditional financial systems and introducing unique legal challenges. As the global adoption of crypto continues to gain momentum, disputes arising from their use, ownership, and transactions have become increasingly prevalent. International arbitration stands as a vital mechanism for resolving cross border disputes by offering parties a neutral platform to navigate the complex legal issues arising from the decentralized nature of cryptocurrencies.
Developing Rules & Regulations
In April 2021, the UK Jurisdiction Taskforce developed and published the brief but innovative, Digital Resolution Rules, designed to guide parties through a procedural framework that allows for the resolution of disputes relating to, among other digital technologies, cryptocurrency. The Rules include a default period of thirty days where an arbitral tribunal must determine a dispute within this timeline. Another key benefit of these rules is anonymity between parties – although the tribunal might request information regarding the identity of the parties, the parties can remain anonymous as to each other. The Rules also specify that English law is the default procedural law that governs the dispute as well as the arbitration agreement, which shortens the arbitration time period as parties cannot challenge jurisdiction. Continue reading “CryptoCrossroads: Unraveling the Blockchain Knots in International Disputes”
One of the most important issues facing the parties (or potential parties) to an international arbitration is whether an award will ultimately be enforceable against opposing parties and their assets. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention”), usually provides the most direct means to enforce an award. And, as a general rule, the Convention’s application makes enforcement of International Arbitral awards a more straight forward process than judgments from foreign courts. But, parties must remain aware of and consider the limited defenses or obstacles to enforcement that still exist under the Convention, including where enforcement of an award would be contrary to public policy. This “public policy exception” is particularly relevant when issues of international sanctions are involved.
Russian Court Ruling Impact on International Arbitrations
After the Russian invasion of Ukraine, dozens of countries, including the United States, introduced or greatly expanded sanctions against Russia, the Russian President Vladimir Putin as well as high-powered Russian government officials and other influential Russian interests. These sanctions have been extensive, going so far as to prevent Russian banks from using the SWIFT international payment system.
The Russian government responded to these sanctions, in part with the introduction of Federal Law No. 171-FZ, which provides Russian parties to an international arbitration (who are also the subject of Russian sanctions) the opportunity to apply to a Russian court for an injunction prohibiting foreign claimants from continuing the arbitration and receiving an award. The Russian court can also award the sanctioned individual a sum of money that equals the sum of the international award against the sanctioned person thereby eliminating the award against the sanctioned person. Continue reading “The Impact of Sanctions on International Arbitrations”