The Integrating Blockchain Technology In Indian Arbitration: Evaluating The Impact And Legal Framework Of Strong Smart Contracts

Anukriti Jain, Institute of Law, Nirma University, Ahmedabad

Mohammed Hasnain Mansoori, Institute of Law, Nirma University, Ahmedabad

ABSTRACT

Though some sceptics argue that Web3 has lost its spark and is on the decline, with its promises of decentralisation and heightened security, blockchain technology presents a potential game-changer for arbitration, particularly in addressing the strain on traditional dispute resolution methods in India. As courts and arbitration systems grapple with overwhelming caseloads, online dispute resolution (ODR) mechanisms offer a compelling alternative, specifically those incorporating smart contracts with arbitration clauses. Smart Contracts can be broadly classified into two main categories: (I) Weak Smart Contracts and (II) Strong Smart Contracts. Weak Smart Contracts are those that are either revocable or relatively irrevocable. In contrast, Strong Smart Contracts are characterised by their absolute irrevocability. Typically, Smart Contracts on blockchain platforms such as Ethereum align with the concept of Strong Smart Contracts. This article will exclusively explore the characteristics and implications of Strong Smart Contracts, which aim to revolutionise efficiency and achieve decentralised justice by leveraging blockchain, crowdsourcing, and game theory. Further, it examines how traditional and blockchain arbitral orders can coexist from an Indian standpoint. Subsequently, it delves into potential resolutions, with a particular focus on the nuanced approach of the hybrid Kleros model. Finally, it concludes with insights drawn from the preceding analysis.

Keywords: Blockchain technology; blockchain arbitration; online dispute resolution; decentralised justice; smart contracts; Kleros, CodeLegit