Welcome to the Arbitration Process Forum

We'll be working out some of the details of the EOSIO Arbitration Process here, as a community.

For starters, here is a graphical representation of one approach, that of the International Center for Dispute Resolution.

Please post your ideas and questions in this forum.

If this was helpful, please UPVOTE. If not, please REPLY so I can improve.

Thomas Cox
blockchain governance expert - active in the EOSIO ecosystem
US: +1 503.516.3886

(all opinions are my own)

Comments

  • KevKev Posts: 399 admin

    Stickied, aka "announced" this post.

  • Sam_SapoznickSam_Sapoznick Posts: 68 Member - 2/5 EOS Tokens
    edited March 22

    Thomas, after consideration & discussion with Sun Tzu, Eva, & others in various forums, I've come around to seeing mediation as not necessary or beneficial to include in the EOS.IO dispute resolution process.

    I was never strongly in favor of it to begin with, it only appeared because my original diagram was based more or less verbatim on the published ICDR rules.

    The arguments against mediation as a pathway are:

    • No weakening of principle: Removing mediation doesn't compromise the principles which underlie enforced, formal dispute resolution.

    • Practical Fairness: There's potential for abuse in that stronger parties may attempt to force weaker parties to carry a dispute only through mediation, excluding the weaker party from the potential remedy an arbitrator's decision may bring.

    • Duplication of effort: A competent arbitrator can serve as a mediator upon demand, in fact will attempt to mediate a dispute if appropriate. No need to duplicate effort with another layer of organization / personnel etc. adding expense.

    • Ease of coding & deployment: Will be simpler to implement DApp-managed arbitration if the overall structure is simpler, i.e. 1 major process pathway instead of 2.

    In light of the above I've revised the diagram & propose a new revision as follows:

  • tkaraivanovtkaraivanov Posts: 24 Jr. Member - 1/5 EOS Tokens
    edited March 22

    The diagram seems to imply that users can appeal an arbitrator decision infinitely. Also, appeals use the exact same format as standard arbitration.

    How about escalating an appeal (or even a standard arb decision)? Arbitrators could decide to escalate an issue themselves to a panel of 3/5/7 arbitrators, or even for community referendum?

  • jwilliamsjwilliams Posts: 4 Brand New

    In my opinion, mediation should remain in the EOS dispute resolution process, because it encourages community dialogue and negotiation, and creates less of a burden on the system- arbitration takes much more work. Mediation, as I understand it, is less formal than arbitration. Mediation can be a guided discussion, as opposed to a formal "court-like" procedure. Mediation is more of a negotiation, as opposed to a judgment.

    Also, couldn't a mediator gain experience and develop a reputation for honesty and effectiveness, which would act as credentials for future work as an arbitrator? In other words, the effective and trusted mediator would be groomed to take on the additional responsibilities of being an effective and trusted arbitrator.

    I find the original "Life Cycle of a Dispute" diagram to be better than the diagram where mediation has been removed.

  • bluejaysbluejays Posts: 66 admin
    edited March 22

    Agree with @jwilliams , except for the part of a mediator eventually becoming an arbitrator. I believe that the skillsets of both roles fill a market need. One for a typically more formal and lengthy process, and the other for a more typically shorter, less formal and possibly more satisfying process. I would think that if parties choose a mediation, they will choose it because they will have a say in the outcome, and will prefer a negotiation process rather than presenting their case to an arbitrator and walking away process. There will be a market need for both types of dispute resolution IMO.

  • MortenMorten Posts: 27 Jr. Member - 1/5 EOS Tokens

    I’m an attorney-at-law very interested in EOS.
    I would like to contribute my initial thoughts considering the suggested EOS arbitration system. My viewpoint is from Norwegian law, but similar rules might apply in other European countries.

    The basic premise in Norwegian law is that contracting parties can agree upon an arbitration clause when entering into a contract.
    The parties can decide to use any arbitrators or arbitration system they see fit. The only condition is that the arbitrators are impartial, qualified and independent of the parties. The parties can also agree to have the dispute solved with a certain set of rules, other than the national law.
    If an arbitration clause has been accepted by the parties in a valid manner, the national courts will not get involved in resolving a dispute arising from the contract.
    In the case of the suggested EOS arbitration system, the parties agree to a formal conflict resolution framework upon entering the domain. The EOS arbitrators can therefore decide a dispute in a legally binding manner.

    An important exception to this main rule is regarding consumers contracting with businesses.
    In these cases, an arbitration clause is not legally binding for the consumer if it was agreed to before a dispute arises.
    According to Norwegian law, an arbitration clause is only legally binding for the consumer if the consumer agrees to arbitrate after a dispute has arisen.
    The rule has been put in place to protect consumers from high costs associated with private arbitration and to prevent that consumers sign off their rights by accepting general terms and conditions.

    This might not be a big issue regarding EOS arbitration, but I believe it’s worth mentioning.
    If you consider the case of a decentralized Ebay the exception does not come into effect, since here you have consumers contracting with consumers.
    If you on the other hand have a company like Amazon selling goods to consumers using the EOS blockchain, the exception would come into effect and a general arbitration clause would not be legally binding. Here a business would risk that that a consumer seeks remedy outside of the EOS arbitration framework.

  • thomasbcoxthomasbcox Posts: 148 Sr. Member - 1/5 EOS Tokens

    @Morten said:
    I’m an attorney-at-law very interested in EOS.
    I would like to contribute my initial thoughts considering the suggested EOS arbitration system. My viewpoint is from Norwegian law, but similar rules might apply in other European countries.

    Thank you!

    According to Norwegian law, an arbitration clause is only legally binding for the consumer if the consumer agrees to arbitrate after a dispute has arisen.
    The rule has been put in place to protect consumers from high costs associated with private arbitration and to prevent that consumers sign off their rights by accepting general terms and conditions.

    This might not be a big issue regarding EOS arbitration, but I believe it’s worth mentioning.

    Definitely important to consider.

    If you consider the case of a decentralized Ebay the exception does not come into effect, since here you have consumers contracting with consumers.
    If you on the other hand have a company like Amazon selling goods to consumers using the EOS blockchain, the exception would come into effect and a general arbitration clause would not be legally binding. Here a business would risk that that a consumer seeks remedy outside of the EOS arbitration framework.

    I believe our current assumption is that blockchain based commerce will be presumed to be international in character, rather than within any one country.

    I'm curious if the Norwegian standard for consumers would apply for all Norwegian consumers transacting on a blockchain, or only when transacting with clearly Norwegian based businesses, or what. Any thoughts?

    If this was helpful, please UPVOTE. If not, please REPLY so I can improve.

    Thomas Cox
    blockchain governance expert - active in the EOSIO ecosystem
    US: +1 503.516.3886

    (all opinions are my own)

  • ArbitratorArbitrator Posts: 4 Brand New

    Hi, this is a very interesting thread and I would be curios to find out more (beyond what I have read so far in the whitepaper an on the forums).

    A few questions just to better understand how this will work:
    How will disputes be started? Parties send the request for arbitration to block producers or someone else?
    Will the block producers "decide" disputes themselves (with "in-house" arbitrators)? Or will they just enforce the decisions accepted outside arbitral bodies?

    Also, what kind of use cases, contract types and disputes do you think will be most frequent? Some disputes are not arbitrable (capable of settlement through arbitration).

    So much for now, thank you for the answers in advance!

  • EOSREALGraceEOSREALGrace Posts: 15 Jr. Member - 1/5 EOS Tokens

    @Morten said:
    I’m an attorney-at-law very interested in EOS.

    An important exception to this main rule is regarding consumers contracting with businesses.
    In these cases, an arbitration clause is not legally binding for the consumer if it was agreed to before a dispute arises.
    According to Norwegian law, an arbitration clause is only legally binding for the consumer if the consumer agrees to arbitrate after a dispute has arisen.
    The rule has been put in place to protect consumers from high costs associated with private arbitration and to prevent that consumers sign off their rights by accepting general terms and conditions.

    This might not be a big issue regarding EOS arbitration, but I believe it’s worth mentioning.

    I guess we are talking about voluntary and forced arbitration, right?
    In voluntary arbitration, both sides in the dispute voluntarily agree to submit their disagreement to arbitration after it arises, and they have an opportunity to investigate their best options for resolving their claim.

    In forced arbitration, a company requires a consumer or employee to submit any dispute that may arise to binding arbitration as a condition of employment or buying a product or service. The employee or consumer is required to waive their right to sue, to participate in a class action lawsuit, or to appeal. Forced arbitration is mandatory, the arbitrator’s decision is binding, and the results are not public.

    Forced arbitration is being written into more and more terms of agreement and contracts, including those used for employment, insurance, home-building, car loans and leases, credit cards, retirement accounts, investment accounts, and nursing facilities, to name a few.

    I think in EOS system, we don't have giants such as United airlines, more disputes will be token holders to BP, or on constitution, the token holders are not in disadvantaged position as consumers to car dealers. Also in EOS, though you need to pay some cost to initiate the arbitration process, the amount shall be affordable.

  • MortenMorten Posts: 27 Jr. Member - 1/5 EOS Tokens

    @thomasbcox said:

    I believe our current assumption is that blockchain based commerce will be presumed to be international in character, rather than within any one country.

    I'm curious if the Norwegian standard for consumers would apply for all Norwegian consumers transacting on a blockchain, or only when transacting with clearly Norwegian based businesses, or what. Any thoughts?

    Basically, the Norwegian standard for consumers would apply if the sellers business was based within the European Union.

    If the business was based in a country outside the European Union, I believe the Norwegian standard would not apply. If a Norwegian consumer transacted with an American company, the Norwegian courts would then use American law to decide the case.

    @EOSREALGrace said:

    I guess we are talking about voluntary and forced arbitration, right?
    In voluntary arbitration, both sides in the dispute voluntarily agree to submit their disagreement to arbitration after it arises, and they have an opportunity to investigate their best options for resolving their claim.

    In forced arbitration, a company requires a consumer or employee to submit any dispute that may arise to binding arbitration as a condition of employment or buying a product or service. The employee or consumer is required to waive their right to sue, to participate in a class action lawsuit, or to appeal. Forced arbitration is mandatory, the arbitrator’s decision is binding, and the results are not public.

    Forced arbitration is being written into more and more terms of agreement and contracts, including those used for employment, insurance, home-building, car loans and leases, credit cards, retirement accounts, investment accounts, and nursing facilities, to name a few.

    Yes, you are right. In theory the arbitration is not forced since the consumer voluntarily agrees to arbitration. But it is often seen as forced because of the imbalance between the parties, inaccessible terms and conditions, difficult for consumer to negotiate, etc.

  • ArbitratorArbitrator Posts: 4 Brand New

    @Morten said:

    @thomasbcox said:

    I believe our current assumption is that blockchain based commerce will be presumed to be international in character, rather than within any one country.

    I'm curious if the Norwegian standard for consumers would apply for all Norwegian consumers transacting on a blockchain, or only when transacting with clearly Norwegian based businesses, or what. Any thoughts?

    Basically, the Norwegian standard for consumers would apply if the sellers business was based within the European Union.

    If the business was based in a country outside the European Union, I believe the Norwegian standard would not apply. If a Norwegian consumer transacted with an American company, the Norwegian courts would then use American law to decide the case.

    I would dare to add that there are even more layers of complexity when it comes to a case like that. Usually the court (similarly should apply in an arbitration) would have to decide what is the applicable law and jurisdiction in the transaction. In case the contract does not specifically mention these, there are rules how to determine it. Normally this includes legal tests to determine where was the offer or acceptance made, what is the type (subject matter) of contract etc.

    I believe it could also be possible that in a hypothetical case of American company and Norwegian consumer the applicable consumer law would be Norwegian law. This is what is typically the role of trained judges / lawyers / arbitrators; to review case facts and decide according to the laws. Laymen are usually not equipped with the needed knowledge to resolve such disputes in a "legal" way.

  • MortenMorten Posts: 27 Jr. Member - 1/5 EOS Tokens

    @Arbitrator said:

    @Morten said:

    @thomasbcox said:

    I believe our current assumption is that blockchain based commerce will be presumed to be international in character, rather than within any one country.

    I'm curious if the Norwegian standard for consumers would apply for all Norwegian consumers transacting on a blockchain, or only when transacting with clearly Norwegian based businesses, or what. Any thoughts?

    Basically, the Norwegian standard for consumers would apply if the sellers business was based within the European Union.

    If the business was based in a country outside the European Union, I believe the Norwegian standard would not apply. If a Norwegian consumer transacted with an American company, the Norwegian courts would then use American law to decide the case.

    I would dare to add that there are even more layers of complexity when it comes to a case like that. Usually the court (similarly should apply in an arbitration) would have to decide what is the applicable law and jurisdiction in the transaction. In case the contract does not specifically mention these, there are rules how to determine it. Normally this includes legal tests to determine where was the offer or acceptance made, what is the type (subject matter) of contract etc.

    I believe it could also be possible that in a hypothetical case of American company and Norwegian consumer the applicable consumer law would be Norwegian law. This is what is typically the role of trained judges / lawyers / arbitrators; to review case facts and decide according to the laws. Laymen are usually not equipped with the needed knowledge to resolve such disputes in a "legal" way.

    It is indeed a very complex subject, and any main rule has many exceptions. A court or an arbitrator would have to look at each individual case to decide. In my jurisdiction international choice of law can be notoriously difficult because of antiquated laws and many different European conventions and treaties.

  • jessethanjessethan Posts: 2 Brand New

    Not understanding how to get from "no response received" to "agree on arb". Where's the penalty for no response?

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