Blockchain technology has led to the creation of decentralized justice systems, offering alternative dispute resolution mechanisms based on transparency, immutability, and efficiency.¹ Platforms such as Kleros, Jur, and Aragon aim to resolve disputes through anonymous jurors selected via blockchain, bypassing traditional courts and arbitral tribunals.² While these systems promise faster and lower-cost outcomes, their compatibility with established frameworks like the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards raises significant concerns.

Unlike conventional arbitration, decentralized justice systems often lack a clearly identifiable seat of arbitration. The New York Convention requires an arbitral award to be rendered in the territory of a state different from the one where enforcement is sought.³ However, decentralized processes conducted via blockchain, involving participants from various jurisdictions without a physical location, cannot satisfy this prerequisite.

Another major issue is the fulfillment of the "writing" requirement for arbitration agreements under Article II of the New York Convention. Although modern interpretations, including the 2006 UNCITRAL Model Law amendments, recognize electronic communications,⁴ mere participation in a blockchain-based platform or acceptance via click-wrap agreements may not sufficiently reflect genuine consent to arbitrate.⁵

Procedural deficiencies further distance decentralized justice from traditional arbitration. Jurors in these systems often decide cases without hearings, witness examinations, or the application of substantive law, violating core principles of due process.⁶ Such deficiencies could trigger refusal of enforcement under Article V(1)(b) of the New York Convention, which protects the right to present one’s case.

Moreover, the absence of a reasoned award—a fundamental element for enforcement—is common in decentralized justice systems.⁷ Under international standards and comparative law, an award lacking reasoning can be considered incompatible with public policy or procedural fairness, jeopardizing its recognition.⁸

Finally, the binding nature of decentralized decisions is questionable. Enforcement under the New York Convention presupposes that the award is final and binding upon the parties.⁹ Given that many users of decentralized platforms may not genuinely intend to relinquish their right to pursue remedies before courts, these decisions cannot be considered binding in the Convention’s sense.

In conclusion, while decentralized justice systems represent innovative developments in dispute resolution, their structural incompatibility with the requirements of the New York Convention prevents their awards from being recognized and enforced internationally. They must be regarded as sui generis mechanisms distinct from classical arbitration.

References

1. ÇAĞLAYAN AKSOY, Pınar, “Akıllı Sözleşmelerin Dünü, Bugünü ve Yarını: Karşılaştırmalı Bir Değerlendirme”, Vergi Dünyası, 2022, 42(494), 21-25. ↩
2. GUILLAUME, Florence / RIVA, Sven, “Blockchain Dispute Resolution for Decentralized Autonomous Organizations”, in Blockchain and Private International Law, Brill | Nijhoff, 2023, 601. ↩
3. NOMER, Ergin, Devletler Hususî Hukuku, 23rd ed., Beta Yayıncılık, İstanbul, 2021, 591. ↩
4. UNCITRAL, Model Law on International Commercial Arbitration (1985), with Amendments as Adopted in 2006 (Online) <https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration> (accessed 30.10.2024). ↩
5. ZORLU, Süleyman Yasir, “Tahkim Anlaşmasının Yazılı Olma Şartı”, Tahkim Anlaşması Tahkim Okulu Paneller Serisi, On İki Levha Yayıncılık, İstanbul, 2020, 110. ↩
6. ORTOLANI, Pietro, “Recognition and Enforcement of the Outcome of Blockchain-Based Dispute Resolution”, in Blockchain and Private International Law, Brill | Nijhoff, 2023, 644. ↩
7. AKINCI, Ziya, Milletlerarası Tahkim, 6th ed., Vedat Kitapçılık, İstanbul, 2021, 499. ↩
8. DEMİR GÖKYAYLA, Cemile, “Yeni Yargıtay Kararları Işığında Gerekçesiz Yabancı Mahkeme Kararlarının Tanınması ve Tenfizi”, Bahçeşehir Üniversitesi Hukuk Fakültesi Dergisi, 2013, 9(105-106), 106. ↩
9. VAN DEN BERG, Albert Jan, “Grounds for Refusal of Enforcement – Award Not Binding”, Yearbook Commercial Arbitration, 1994, 19, 585-588. ↩