Research On Smart Contract Dispute Resolution Mechanism

Blockchain-based Smart contract was first introduced by Ethereum in 2015,which is computer programmes that self-execute the terms of a contract when specific conditions are met.Smart contract can be applied to many fields such as financial transactions,supply chain and so on.Smart contract was decentralized,self-executing and irrevocable,it can reduce transaction costs,improve transaction efficiency,and provide a more secure environment for international trade.At present,the legal nature of smart contract is unclear,scholars recognize smart contract as self-help,computer program or contract.Some Jurisdictions recognize smart contract as contracts or computer programs.The legal framework that smart contract transactions should be subjected to is not yet clear.Various jurisdictions may apply existing legal frameworks such as the Anti-Money Laundering and Counter-Terrorism Financing Law,or design special legislation.An international legal framework specifically designed for smart contract does not exist.Self-executing of smart contract transactions can reduce disputes but never eliminate them.Smart contract disputes will arise when it does not truly reflect the parties’ intentions,a software coder make an error,an operator bug the code,oracles collect wrong facts or the parties intend to terminate the transaction etc.Smart contract disputes are cross-border,without identifiable parties,difficulty in determining subject of legal responsibility,and contract law remedies may not apply to smart contract.It is difficult for the international court to exercise jurisdiction over smart contract disputes.It is impossible to apply traditional choice of law rules to a smart contract in which at least one transacting party remains anonymous.International court and international arbitration tribunal has limited authority to order the alteration of the encoded obligations,they may only be able to force the parties to execute a secondary transaction or otherwise pay remedies for a smart contract that created damages for one of the parties.The legal frameworks applied to smart contract may require the true identity of parties,it could help determining jurisdiction and the application of laws,but it still cannot break through the dilemma that smart contract cannot be changed once they are automatically executed.To solve this problem,the blockchain dispute resolution mechanism is necessary.The operation mode of the dispute resolution mechanism in the blockchain is to embed certain procedures in the smart contract.When a dispute occurs,the execution of the smart contract can be "frozen",and then the execution of the smart contract can be changed,terminated or continued based on the result of the dispute processing.In other words,it implements negotiation,mediation,arbitration or litigation procedures on the blockchain to resolve smart contract disputes.The blockchain dispute resolution mechanism can resolve disputes quickly,flexibly,efficiently and at low cost,but there exist some problems such as lack of rules and legal certainty.With the gradual development of smart contract,blockchain technology and the gradual improvement of legislation in various countries,those question that whether a data message stored on a blockchain is deemed to meet the paper-based requirements of writing,a signature and a digital evidence,whether an blockchain arbitral award is enforceable under the New York Convention will gradually become clear.