This paper considers the private international law, or conflict-of-law, aspects of derivatives contracts governed by the laws of Singapore and England and Wales involving distributed ledger technology (DLT), commonly known as blockchain technology.
DLT systems are often borderless, allowing multiple users or participants to modify records in a shared database that may be based in several jurisdictions without necessarily needing to use a central validation system that imposes its own standards and processes.
This type of system may leave participants vulnerable to multiple – and potentially inconsistent – assertions of governing law. There may also be conflict-of-law issues regarding the situs (ie, where property is treated as being located for legal purposes) of any assets that are native to a DLT platform. Private international law rules relating to property typically dictate that questions over rights and entitlements to property are governed by the law of the place in which the property or claim to property is situated. However, this may be ineffective in a DLT environment as traditional geographic boundaries may be more difficult to establish in the context of financial transactions (and assets relating to those transactions) conducted on a DLT platform.
This paper will identify specific private international law issues with respect to contract law that may arise when trading derivatives in a DLT environment and, where appropriate, will propose recommendations on how these issues might be clarified or resolved.