Enforceability Of Decentralised Arbitral Awards: Legal Hurdles And Prospects Of Reforms In India’s Arbitration Framework
Sawni Sardeshpande, Symbiosis Law School, Pune
INTRODUCTION
“In the DeFi world, trust is algorithmic, until it breaks. Arbitration is the human patch that keeps the system fair.” - Federico Ast, Co-Founder, Kleros
The Arbitration and Conciliation Act, 1996, essentially works as the basic link in the pro- arbitration system in India, drawing strength from three basic tenets: party autonomy, identifiable tribunals, and awards delivered at a designated seat that could be enforced subject to limited judicial review under Parts I and II. This structure, in sync with the New York Convention, has formed the bedrock for efficient cross-border dispute resolution for decades, premised on procedural certainty and a territorial link.
However, the rapid evolution of blockchain technology subverts this construct by making possible decentralized justice systems-such as Kleros and Jur- which render arbitral awards. It works by way of distributed consensus rather than designated neutral arbiters. These innovations, powered by smart contracts and cryptoeconomic incentives, promise ostensibly borderless and low-cost adjudication for the growing ecosystem of digital transactions ranging from freelance bounties to DAO governance disputes.
Some of blockchain's essential characteristics- namely, decentralization, immutability, and pseudonymity- create significant enforceability challenges within the territorial and procedural boundaries of the Act, making such awards vulnerable to nonrecognition and setting aside.
