Digital Assets and Electronic Trade Documents in Private International Law: Call for Evidence

On 22 February 2024, the Law Commission of England and Wales published a call for evidence to help them 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. They seek the views and evidence of a diverse body of stakeholders from a wide range of perspectives and jurisdictions to ensure their future work on this project will strike the appropriate balance between the theoretical aspect of the law and its practical application. The responses will inform the next steps. They seek responses by Thursday 16 May 2024.

The call for evidence can be downloaded here. A summary of the call can be downloaded here. Responses to the call for evidence should be submitted here.

The Law Commission describes the problem that their project aims to address as follows.

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.

[The Law Commission’s] 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). [The Law Commission’s] work has shown that these technologies raise issues of private international law.

In [the Law Commission’s] final report and Bill for work on electronic trade documents, [the Law Commission] 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, [the Law Commission] recognised that many of these issues arise in relation to digital assets more broadly. During the passage of the Electronic Trade Documents Act 2023, [the Law Commission] 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.