The question is not whether arbitration works. It does. The question is what was decided before the dispute existed.
A great deal is written about whether arbitration is suited to disputes over digital assets. The discussion is sterile: it is, and for the obvious reasons — neutrality, technical expertise, confidentiality, international recognition of the award. But none of those advantages decides anything.
What decides the outcome is a set of choices made at the time of contracting, while the parties still cooperate. After the dispute they do not, and everything the tribunal will be able to do was fixed while they did. The arbitration clause is not the beginning of the proceedings: it is the only moment at which anyone has power over them.
There are five decisions, and they are ordered.
1. Who the counterparty is
This is the most consequential decision and the one most often skipped.
An award binds persons. If the counterparty named in the contract is a protocol, an organisation with no legal form, or simply an address, there is nobody to bind: the tribunal may render the finest award in the world and have no addressee for it. Identifying a person — natural or legal — with capacity to be sued, a known domicile and locatable assets is not an administrative formality. It is the precondition of everything else.
And it should be named in the contract, not deduced afterwards. Establishing who stood behind a decentralised structure is litigation in itself, and it is litigation won or lost before the arbitration begins.
2. The seat and the law, which are two questions rather than one
The seat determines which court hears the annulment action and on what standards. That much is known. What is overlooked is that the law governing the contract does not necessarily govern the nature of the asset.
They are distinct questions. A contract subject to Swiss law does not thereby settle the legal character of the token — whether it is a thing capable of ownership, a claim, a transferable security, or an object with no category at all. That characterisation usually follows rules of its own, and the available remedies depend on it: one cannot vindicate title to something the legal system does not recognise as an object of property.
So three things, not one, fall to be decided at contracting: the seat, the law of the contract and, so far as the chosen system allows it, the characterisation of the asset.
3. What the tribunal may order, and as at what date
An award may order delivery of the asset or award compensation. These are not the same thing and the choice should be made in advance.
Specific delivery is what the creditor wants and what the debtor can render impossible: it is enough not to sign. Compensation is always enforceable against ordinary assets, but it converts an asset into a figure — and that raises the question which decides the entire quantum: as at what date is it valued?
With an asset whose price can move forty per cent in a week, the valuation date is not a technical detail. The date of breach, the date of the award, the date of actual payment and the highest value during the period are four different figures, sometimes an order of magnitude apart. If the contract is silent, the tribunal will decide it, and the creditor will have left the most important part of its claim in someone else’s hands.
4. Interim measures, and a trap almost nobody mentions
With digital assets, the time between claim and award is time in which the asset can disappear. Interim measures therefore matter here more than in any other field, and hence the figure of the emergency arbitrator: an arbitrator appointed within days, before the tribunal is constituted, to grant urgent relief.
Almost every institutional set of rules provides for one — the ICC at article 29 and Appendix V of its Rules, and likewise the LCIA, the ICDR, the HKIAC, the SIAC, the SCC, the Swiss Arbitration Centre, CIETAC and CIAM-CIAR, among others. And here are the two things to know before signing.
The first is that these provisions are generally not retroactive. They apply only where the arbitration agreement was concluded after the rules incorporated them, unless the parties opt in expressly or the rules provide that the parties submit to the version in force when proceedings begin. A clause drafted years ago, referring to an older set of rules, can leave a creditor without an emergency arbitrator in precisely the kind of dispute where speed is everything.
The second is that its enforceability is contested. Article III of the New York Convention requires the recognition and enforcement of “awards,” and whether an emergency decision is an award is unclear in many jurisdictions: being provisional, it is not final. The Paris Court of Appeal held, in respect of a pre-arbitral referee, that the decision was not final and so not enforceable as an award. Other systems have gone the other way: Singapore amended its legislation in 2012 to bring the emergency arbitrator within the definition of an arbitral tribunal, and the Supreme Court of India allowed enforcement of an emergency award as an interim order. Many courts look to the substance of the decision rather than its label.
The practical conclusion: the emergency arbitrator is extremely valuable, and it is unwise to count on a court enforcing it. What actually makes it effective is the next decision.
5. The channel to the asset
A clause providing that the tribunal decides is worth little if nothing in the asset’s architecture obeys the tribunal.
This is the contribution that interests us most at BACS, and it is a design decision rather than a drafting one. If the asset in dispute sits in a control structure that admits an adjudicated decision — custody with conditional instructions, a multi-signature arrangement in which the institution or the arbitrator is a signer, or any mechanism by which the award reaches the asset without needing the debtor’s will — then the award is performed. If not, the award is an order directed at whoever holds the keys and has no reason to use them.
We call that a legal oracle: the arbitral tribunal as the source of a decision which the system where the asset lives is built to read and execute. It is not science fiction and it requires no new technology. It requires having agreed it beforehand.
And it is worth saying what this is not. It does not replace the court or close the judicial route: the annulment action remains open and ordinary enforcement against assets remains available. What it does is relieve the creditor of depending on them.
What the New York Convention solves, and what it does not
The New York Convention is the finest piece of international legal infrastructure in existence, and it solves recognition: an award rendered in one jurisdiction is recognised in more than a hundred and seventy. But recognition is not execution. Once the award is recognised, there must still be assets to project it onto and an authority able to reach them — and there the Convention does not help. What helps is each country’s procedural law, which is uneven, and the cooperation of whoever holds control, which is voluntary.
Hence the conclusion, which is the one that underpins all of our work. The arbitration clause for a digital asset is not a dispute resolution clause: it is part of the design of the asset. Where it is drafted as an appendix to the contract, the result is a correct award and an unreachable asset. Where it is drafted as part of the architecture, the result is justice that is performed.
Institutional interest note: BACS (Blockchain Arbitration & Commerce Society) is a non-profit association registered in the European Union Transparency Register under number 9106897105368-14, and has established an international tribunal of arbitration, BACSIT, which administers proceedings under its own rules. This analysis is general in nature and does not constitute legal advice on any particular case or jurisdiction.
Sources: New York Convention 1958, articles II, III and V; ICC Arbitration Rules (2021), article 29 and Appendix V; International Bar Association guide to emergency arbitration (2025), from which the references to the French position, the 2012 Singaporean legislative amendment and the Indian Supreme Court case law are drawn.
