NEWSLETTER-2020-metin

236 NEWSLETTER 2020 How Arbitration May Work by Blockchain Above all, there should be an arbitration agreement between the parties so that the arbitration procedure can be initiated with respect to a dispute arising in the execution of a smart contract. This obligation lies at the basis of the classical arbitration practice, and arises from the fact that the arbitration is based on the will of the parties. When a dispute based on smart contracts arises, the arbitration process takes effect. Due to the nature of the system, the process requires the automation of the procedures and documents. In other words, the process after the appointment of the arbitrator will work as in normal arbitration proceedings, but all transactions will be per- formed online 10 . The arbitral award shall surely contain human judgment, as there is no digital authority yet whose legal evaluation has been validated. Therefore, the award should be rendered outside of the blockchain platform. Accordingly, the applicability of the award will be possible through transferring it to the blockchain platform. In this respect, the arbitrator will act as an “oracle” that provides input to fulfill the obli- gations under the smart contract 11 . “Oracle” enables the blockchain or smart contract to interact with external data, namely, the world outside the blockchain platform. In a blockchain arbitration, the recognition and execution of the arbitral award by traditional methods bring with it many problems. An important point here is whether an arbitration clause included in the smart contract would violate Article 2 of the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) which stipulates an arbitration agree- ment to be concluded in writing 12 . The article in question defines the 10 2018 In Review: Blockchain Technology and Arbitration, Kluwer Arbitration Blog http://arbitrationblog.kluwerarbitration.com/2019/01/27/2018-in-review- blockchain-technology-and-arbitration/?doing_wp_cron=1589806239.47963309 28802490234375 (Access date: 13.05.2020). 11 ICC Dispute Resolution Bulletin, Robots Replacing Arbitrators: Smart Contract Arbitration, 2018 Issue 1, p. 30. 12 ICC Dispute Resolution Bulletin, Robots Replacing Arbitrators: Smart Contract Arbitration, 2018 Issue 1, p. 29.