Is It Possible for an Arbitrator To Sign an Arbitral Award Digitally?

Table of Links

Abstract and I. Introduction

II. Award Form and Content

III. Electronic Signatures, Writing Requirement, and Authentication

• A. Is it possible for an Arbitrator o Digitally Sign an Arbitral Award
• B. How could an Electronic Award be Considered to be "In Writing"
• C. Could a Multisig E-Award be Duly Authenticated

IV. Can Multisig Arbitration be Seen as an Autonomous Legal Order?

V. Conclusion

\ Appendix A: Multisig Transaction on Bitcoin Testnet Example

Appendix B: Breakdown of BTC Stored in 2/3 Multisig Accounts

A. IS IT POSSIBLE FOR AN ARBITRATOR TO DIGITALLY SIGN AN ARBITRAL AWARD?

In the case of the European Union, the eIDAS Regulation[22] provides a legal framework for electronic signatures. The eIDAS Regulation was implemented in the United Kingdom[23] with the Electronic Identification and Trust Services for Electronic Transactions Regulations 2016/696, which superseded the Electronic Signatures Regulations 2002/318. The Electronic Communications Act 2000 (“ECA 2000”) was amended with some provisions from the eIDAS Regulation. The ECA 2000 does not establish the inherent validity of electronic signatures and only confirms their admissibility[24]. According to Section 7(1)(a), in any legal proceedings, an electronic signature is admissible as evidence. Article 25 of the eIDAS Regulation, which gives electronic signatures legal effect[25], was not transpose to the ECA 2000. The drafters of the ECA 2000 might have wanted to give courts greater latitude in determining the proper use and the evidential value of electronic signatures[26]. Electronic signatures are defined in Section 7(2) as anything in electronic form “incorporated into or otherwise logically associated with any electronic communication or electronic data” and that “purports to be used by [an] individual creating it to sign.” The second element thus indicates that there must be an intention to sign.

\ An intention to sign was demonstrated in the case of *Goodman v. J. Eban Limited[*27], Mr. Goodman, a solicitor, used a rubber stamp to sign letters sent with his bill of costs. He kept the stamp locked in his room and was the only person who had access to the stamp. The Court of Appeal held that the use of such a mechanical signature is valid given that Mr. Goodman intended the rubber stamp to be regarded as a signature for signing letters. In quoting an older authority, Bennett v. Brumfitt, the court noted that a signature is not actually made by the hand alone, but with the use of some instrument. There is no distinction between using a pen, pencil, stamp or even a paint-brush, where the impression is made with the intent and purpose of signing a document. The court acknowledged that a stamp might not, on the face of it, carry the same assurance of authenticity as a signature written in the ordinary way with a pencil or pen, but stated that if there is doubt, a party could inquire whether the signer had personally signed the document.

\ Electronic signatures originating from a virtual currency wallet can be admitted as evidence and eventually found to be valid by a court. A Bitcoin address is a public key hash encoded as a base58 string[28]. When a sender creates a standard P2PKH[29] transaction containing instructions that would allow a recipient, whom controls the private key of the public key hash, to spend an output and includes a scriptSig[30] to authorize the release of funds, the sender is incorporating unique electronic data for the purpose of signing the transaction. When a sender broadcast the transaction to the network, they are manifesting an intent to hold the signatures incorporated into the data as valid. In considering the example in Appendix A, the identity of the wallet addresses can be linked to parties. If authenticity is at issue, a party can digitally sign a message with their wallet attesting to the possession and sole control over the wallet’s private key[31]. To increase the legal certainty of the legal effect of electronic signatures, arbitrators may also e-mail parties a transaction ID (“TXID”), which is a reference number to a transaction on the blockchain, accompanied with a copy of “wet ink signatures” in pdf format.

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:::info Author:

(1) A.J. Santos, B.A. (UTSA), J.D. (STCL), Department of Private International Law, Ankara Yıldırım Beyazıt University, Faculty of Law ([email protected]).

:::

:::info This paper is available on arxiv under ATTRIBUTION-NONCOMMERCIAL-SHAREALIKE 4.0 INTERNATIONAL license.

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[22] Regulation (EU) No. 910/2014 of the European Parliament and of the Council of 23 July 2014 on Electronic Identification and Trust Services for Electronic Transactions in the Internal Market and Repealing Directive 1999/93/EC, 257 OJ L (2014) http://data.europa.eu/eli/reg/2014/910/oj/eng l.a.d. 04/17/2019.

\ [23] Under European Union (Withdrawal) Act of 2018, most E.U. laws, including the eIDAS Regulation, would be retained and considered part of domestic law when U.K. exits the E.U.

\ [24] A counter-view is expressed by Mr. Justice Popplewell in Bassano v Toft [2014] EWHC 377 (QB) (“[section 7] recognises the validity of such an electronic signature by providing that an electronic signature is admissible as evidence of authenticity”).

\ [25] eIDAS Regulation, Article 25(1), “an electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures.”

\ [26] Law Commission, ‘Report on Electronic Execution of Documents’ para. 3.21-3.23, pg. 36.

\ [27] Goodman v. J Eban LD, [1954] 1QB 550 (U.K.).

\ [28] Bitcoin Project https://bitcoin.org/en/transactions-guide#introduction l.a.d. 04/17/2019.

\ [29] Bitcoin Project https://bitcoin.org/en/transactions-guide#term-p2pkh l.a.d. 04/17/2019.

\ [30] Bitcoin Project https://bitcoin.org/en/glossary/signature-script l.a.d. 04/17/2019.

\ [31] Bitcoin Project https://bitcoin.org/en/developer-reference#signmessage l.a.d. 04/17/2019.