Digital assets and ETDs in private international law: which court, which law?

Current project status

• Initiation: Could include discussing scope and terms of reference with lead Government Department
• Pre-consultation: Could include approaching interest groups and specialists, producing scoping and issues papers, finalising terms of project
• Consultation: Likely to include consultation events and paper, making provisional proposals for comment
• Policy development: Will include analysis of consultation responses. Could include further issues papers and consultation on draft Bill
• Reported: Usually recommendations for law reform but can be advice to government, scoping report or other recommendations

On 22 February 2024, we launched a call for evidence to help us identify the most challenging and prevalent issues of private international law that arise from the digital, online, and decentralised contexts in which modern digital assets and electronic trade documents are used. We seek the views and evidence of a diverse body of stakeholders from a wide range of perspectives and jurisdictions to ensure our future work on this project will strike the appropriate balance between the theoretical aspect of the law and its practical application. We seek responses by Thursday 16 May 2024.

Download the call for evidence (February 2024)

Download a summary of the call for evidence (February 2024)

Respond to the call for evidence on the consultation website

 

The problem

When parties to a private law dispute are based in different countries, or the facts and issues giving rise to the dispute cross national borders, questions of private international law arise. In which country’s courts should the parties litigate their dispute? Which country’s law should be applied to resolve it? How can the judgment be enforced in another country? Private international law is the body of domestic law that supplies the rules used to determine these questions.

Problems of private international law are by no means a recent phenomenon. The conditions that give rise to problems of private international law date from at least the fourth century BC. The problems are, however, becoming more difficult and increasingly pervasive because modern technologies challenge the territorial premise on which the existing rules of private international law have been developed.

In this respect, the advent of the internet in the late 1980s has been a catalyst of socio-economic change that has posed significant challenges for private international law. More recent innovations, such as crypto-tokens and distributed ledgers, add novel and arguably intractable problems to these existing challenges.

Our project has a particular focus on crypto-tokens, electronic bills of lading, and electronic bills of exchange. This is because these assets are prevalent in market practice, whilst also posing novel theoretical challenges to the methods by which issues of private international law have traditionally been resolved.

The project

In recent years, a significant aspect of the Law Commission’s work has focused on emerging technologies, including smart legal contracts, electronic trade documents, digital assets, and decentralised autonomous organisations (DAOs). Our work has shown that these technologies raise issues of private international law.

In our final report and Bill for work on electronic trade documents, we noted that there are private international law difficulties associated with electronic trade documents, in particular the inherent difficulties in determining the geographical location of the documents.

However, we recognised that many of these issues arise in relation to digital assets more broadly.  During the passage of the Electronic Trade Documents Act 2023, we committed to considering these issues in a more general project on private international law and emerging technology.

In 2022, the UK Government asked the Law Commission to conduct this project considering how private international law rules will apply in the digital context. In particular, the Law Commission is asked to consider the disputes which are likely to arise in the digital context (including contractual, tortious and property disputes), and make any reform recommendations it considers necessary to Government.

Call for Evidence

On 22 February 2024 we published a call for evidence seeking views from a wide range of stakeholders as to the challenges and prevalent issues arising in private international law in the context of digital assets and electronic trade documents. The responses will inform the next steps of our project.

Contact us 

If you would like to be kept up to date about this project, please email conflictoflaws@lawcommission.gov.uk and ask to be added to the mailing list.

 

Related projects 

You may also be interested in our work on the following:

Smart legal contracts

Crypto-assets and other digital assets

Electronic trade documents

Decentralised Autonomous Organisations (DAOs)

Digital Assets