SMART CONTRACT DISPUTES AND PUBLIC POLICY CONSIDERATIONS IN THE ASEAN+6 REGION

SMART CONTRACT DISPUTES AND PUBLIC POLICY CONSIDERATIONS IN THE ASEAN+6 REGION

Abstract Smart contracts provide some benefits, such as better facilitation for contracting parties to monitor performance of their obligation, verifying whether a contract has been executed, reducing the cost spent monitoring the contract etc. However, it is critical to understand the various limitations of this concept as well as the many legal and public policy uncertainties surrounding it. Given the non-existence of a ‘universal rule’ that governs smart contracts, the issues vary from jurisdiction to jurisdiction. This article analyses the experience of legal regulation of ASEAN+6 countries in detail. Due to public policy considerations, there are different scenarios with regard to smart contract development. One possible outlook is that ASEAN+6 countries will not accept (a) a smart contract as a contract, (b) cryptocurrency as property, and/or (c) the enforcement of foreign awards relating to smart contract disputes and/or cryptocurrency. Another possible way out of the deadlock is to govern relations under smart contracts according to the UNIDROIT Principles. However, if the parties do not opt for such a solution, the determination of applicable law will be left to the relevant conflict-of-law rules, with all of the related uncertainties. Therefore, the author suggests that supranational laws are the better path for avoiding uncertainties in smart-contractual relationships. Arguably, smart contracts may be used in other contexts and for other economic purposes, not only for the transfer of cryptocurrency. The article concludes that lawyers should realize the current public policy trends that govern smart contracts and cryptocurrencies.