Abstract

This article explores how blockchain-based smart contracts and decentralized digital systems fundamentally challenge the traditional notion of the “seat of arbitration,” a cornerstone of arbitral law that anchors proceedings to a territorial legal order and defines the procedural framework governing dispute resolution. In decentralized transactions-borderless, pseudonymous, and governed by autonomous code-traditional legal connectors such as party domicile, place of performance, or governing law clauses lose coherence, thereby complicating the determination of procedural law (lex arbitri), judicial oversight, and the enforceability of arbitral awards under the New York Convention.

To address these disruptions, the article proposes three theoretical models. The functional approach links the seat to jurisdictions best equipped to provide procedural legitimacy and oversight. The protocol-integrated model recognises blockchain-native governance mechanisms (such as Kleros or Aragon) as potential substitutes for national seats, embodying a novel form of algorithmic sovereignty. The delocalised arbitration theory envisions a fully non-territorial arbitral framework, independent of any state jurisdiction, though such an approach remains incompatible with existing international enforcement regimes and due process safeguards.

Ultimately, the article advances a hybrid model that combines blockchain-based adjudicative mechanisms with calibrated national court supervision and proposes model clauses tailored to decentralised contractual environments. It concludes that redefining the seat of arbitration is not only a conceptual necessity but also a practical imperative to harmonise law and code, ensuring that arbitration remains legitimate, effective, and enforceable within an increasingly digital, post-territorial global economy where algorithmic systems and legal norms must coexist and evolve in tandem.

This paper will be part of the TDM Special Issue on "Cryptocurrencies and Other Digital Assets in Arbitration". More information here www.transnational-dispute-management.com/news.asp?key=2080