EMAC Agrees on the Proposal “Free Market Dispute Resolution on EOS” of EOS New York

On Sep. 13th, Beijing time 10:00 PM, EMAC regular meeting has been held on ZOOM.

On Aug. 23, 2018, EOS New York has published an article on Free Market Dispute Resolution on EOS:
Identifying Arbitrators & Arbitration Forums On-Chain via {regforum} & {regarbitrator}.

A few days ago, EOS New York said that the code for the upcoming dispute resolution proposal will be written for feedback. Considering this situation, at the 75th regular meeting on September 13, 2018, EMAC once again conducted an in-depth discussion on the topic of “Free Market Dispute Resolution on EOS”.

At the 63rd regular meeting on Aug. 23, 2018, EMAC had conducted a discussion on “Free Market Dispute Resolution on EOS”.

After two in-depth discussions on this article, the EMAC officially responded with the following viewpoints:

First, as an open organization dedicated to serving EOS Chinses community governance, discussion, and education, EMAC fully affirms the concept of “protecting individual life, freedom, and property” in accordance with the initial belief of EOS and the free market competition can bring to the community. Therefore, we completely agree with EOS New York on the points of <Free Market Dispute Resolution on EOS>; additionally, we will fully support EOS New York for achieving this purpose.

Second, the free market doesn’t mean chaos nor disorders. We recommend a framework for a dispute resolution mechanism under which the detailed implementations of each arbitral tribunal are guaranteed to ensure that the arbitral institution and the arbitrator have the greatest freedom of discretion. Also, the mechanism has to be made by the Community, referring to different regions and sectors, each institution will make supplements and perfections. At last, we hope this framework will be discussed and made by the community and referendum.

Third, while agreeing the “ Appointed EOS on-chain regtribunal/regarbitrator” as a necessary condition, we hope a certain threshold and a general evaluation standard can be set. With the help of the free market mechanism, excellent arbitral institutions and arbitrators can be selected for serving the EOS ecosystem.

EMAC will keep in touch with EOS New York BP to ensure that the Chinese community feedbacks receive appropriate attention. We are looking forward to building an impeccable mechanism of EOS arbitration and rules of dispute resolution through our hard work.

For easier reading, the following sections are mainly divided into the following parts:

01 Hot pots of the meeting discussion
02 Summary of the article from EOS New York <Free Market Dispute Resolution on EOS>
03 What questions have been discussed by EMAC?
04 The overall views on <Free Market Dispute Resolution on EOS> of EOS New York
05 Summary of this meeting discussion
06 The Historical EMAC discussion record on the topic of <Free Market Dispute Resolution on EOS>

01 The summary of the hot spots on the meeting discussion
The main task of this meeting: discuss the article published by Kevin Rose of EOS New York on Aug. 23, 2018, <Free Market Dispute Resolution on EOS>

02 Views of <Free Market Dispute Resolution on EOS>
Before the meeting, the candidate arbitrator Achilles Zhang has summarized the main views:

1. All on-chain regmembers recognize the 1958 <New York Convention> on “recognizing and enforcing foreign arbitration decisions”, provided that the initiator of any arbitration order has been properly registered on the EOS chain.
2. Effective arbitration is binding: any on-chain clause should be legally recognized, unalterable, and enforceable.
3. Clearly defining what can be arbitral which means any on-chain clause, transaction, smart contract or Ricardian Contract need an appointed regtribunal and/or regabitrator.
4. Defined what means on-chain: On-chain, namely, any transaction that is authenticated and voted by BPs, smart contract or Ricardian Contract, and exists in the irreversible block of the miannet EOS, which can be viewed, audited, and verified.
5. Regarbitrator’s OPT-IN, methods of operation, ethical rules (refer to the American Bar Association Commercial Disputes Arbitrator Code of Ethics): the regarbitrators sign e-mails, submit contracts or resign via private key.
6. Regarbitrator’s OPT-IN (refer to the American Bar Association Commercial Disputes Arbitrator Code of Ethics): Agree to imitate the UNCITRAL Model Law on International Commercial Arbitration (1985) for dispute resolution.

03 What views have been discussed on EMAC regular meeting
According to the views of the article from EOS New York, Achilles Zhang has compiled the views will be discussed by the EMAC members as follows:

1, Is it in favor of the free market competition mechanism of the on-chain regarbitrators and the regtribunal?

2, To ensure the fairness and reliability of on-chain arbitration, is it necessary to set up a threshold a censorship mechanism?

3, Instead of market selection, should establish evaluation criteria for on-chain regtribunal and regarbitrator?

4, When the contract is not agreed, do you keep the default arbitral tribunal to choose ECAF?

5, Whether the re-agree is allowed if the default arbitral tribunal is not agreed?

6, Will the on-chain regtribunal take the responsibilities for the mistakes for the regarbitrators and relative staff?

04 The overall views on <Free Market Dispute Resolution on EOS> of EOS New York
EMAC members expressed their opinions on the above topics in the ZOOM conference, and based on the opinions of EMAC members，we have the conclusions as follows:
EMAC agrees on the proposal “Free Market Dispute Resolution on EOS” of EOS New York. However, the views of EMAC members are slightly different for the specific structure and rules for achieving a free competitive purpose.
For details, please refer to the detailed meeting discussion in the following.

05 Summary of this meeting discussion

1, Is it in favor of the free market competition mechanism of the on-chain regarbitrators and the regtribunal?

Yue Zhang
I agree on the free market competition but on the condition that a common standard for dispute resolution mechanisms is set.

Xiaobing Peng
I absolutely agree on the free market competition, thus more just arbitrators can be selected.

Siqi Yao
I tend to take the form of semi-free market competition, complete non-marketization will inevitably lead to inefficiency. In turn, complete market competition may lead arbitrators to pay too much attention to how to obtain customers and hype, and may damage the impartiality and neutrality of arbitrators. Market competition befits “dispute resolution”, the key point is “resolution”, and its nature is more likely to “service”. However, non-marketization may be more suitable for “arbitration”, that’s to say, after invalid controversy over mediation, and it is more inclined to “judgment”, and its nature is closer to “judicial” (pay attention: this doesn’t mean that the arbitration is equivalent to justice), therefore, dispute mediation and arbitration are different.
The reason why lawyers should not act as arbitrators in international practice is to prevent arbitrators from affecting neutrality by considering the parties in dispute as potential customers of future lawyer services. The market-competitive dispute resolution service can effectively share a large number of mediation dispute cases for ECAF and improve resource efficiency; however, institutions that stay far away from the market competition (such as ECAF) is necessary too. These institutions are ideal for cases that are complex and require a high degree of impartiality. If you blame the resources of such institutions (represented by ECAF) are inefficient, just like some people accuse Bitcoin’s POW mechanism of energy consumption and inefficiency. In fact, resource consumption and inefficiency are the prices of decentralization.The dispute resolution service providers compete with the non-marketization arbitration institution are very complementary, not mutually exclusive.

Shaojun Huang
In the long run, from the perspective of decentralized governance, third-party competition mechanisms should be allowed, provided that a good environmental atmosphere and rules have been formed, otherwise it will lead to chaos. Therefore, it is not recommended to carry out immediately in the current situation, but the third-party competition mechanism should be explained and reserved.

哥舒·泮@EOS AntPool
I agree on the free market competition mechanism. Arbitration is the free intention of both parties, so it is necessary to fully respect the will of both parties, and the parties will decide to arbitrate the court instead of the default arbitral tribunal of ECAF. Generally speaking, the reason why an international arbitral tribunal can appeal because it is set in the jurisdiction of a certain country or a certain region. If the parties to the dispute are dissatisfied with the outcome of the arbitration, they can appeal to the local Supreme Court.

2, To ensure the fairness and reliability of on-chain arbitration, is it necessary to set up a threshold a censorship mechanism?

Shaojun Huang
A threshold is needed, but the criteria is a question.
Evaluation mechanism
⑴ To set a voting mechanism for every case and it is anti-brush-voting.
⑵ According to the historical record of the arbitral tribunal or arbitrator, the corresponding arbitration capability index or evaluation reference dimension is given;
⑶ Mutual promotion via above arbitral tribunal and market selection.

Siqi Yao
A threshold is needed, and personally, I hope it can be strictly verified.

Dingqiang Liu
The arbitral tribunal prospers and the people are free to choose the arbitral tribunal. The arbitral tribunal’s threshold and censorship mechanism should be set by the BPs and then release a unified standard mechanism. All community members and organizations can apply for the establishment of an arbitral tribunal according to the standard.

1. Instead of market selection, should establish evaluation criteria for on-chain regtribunal and regarbitrator?

Shaojun Huang
It should, because the market is not completely rational, it can even cause disorder and inefficiency.

Siqi Yao
It should, a completely free market will also fail, and it is not guaranteed to be effective. For example, on some e-commerce platforms, the completely free markets carry false orders and false feedbacks. Under the circumstances without an effective self-regulatory mechanism, an arbitral forum might fail because of a large quantity of malicious “fake disputes” and negative feedbacks. In turn, a corrupt arbitrator or forum may also occupy the market head through artificial positive feedbacks.

1. When the contract is not agreed, do you keep the default arbitral tribunal to choose ECAF?

Yue Zhang
A default tribunal is required, but it doesn’t need to be ECAF.

Shaojun Huang
It can be ECAF, provided that the entire system has not yet been perfected. There is no suitable arbitral tribunal to choose from. After maturity, there should be the right to choose independently.
⑴ Let users know when registering, if there is a problem of non-compliance or loopholes, there will be an arbitration organization to vote for arbitration.
⑵ If the user chooses arbitration, how does he choose the arbitral tribunal?
When referring to the big companies doing activities, in order to avoid customers eventually feel cheated, they will try to display the most complete information to customers. Therefore, a link or a page which can display the currently available tribunals and their reference indicators, such as user acceptance; (In the case of arbitration, if the tribunals selected by the arbitrators are different, they must first negotiate a tribunal approved by both parties. If the parties cannot reach an agreement, they will choose according to the current optional tribunal which is the most recognized by the public.
⑶ The ultimate arbitral tribunal: how to ensure that an arbitral tribunal is absolutely effective and fair. There is no absolute fairness, users should be given the right to choose where they want to make final arbitration, that is, even if I lose, I would accept it. However, in order to avoid some arbitral tribunals that cover up bad doings, the ultimate arbitral tribunal should be limited and require a choice and is generally accepted, such as a choice between three or ten.

Siqi Yao
Yes, I recommend to keep it. Like you have said above, if the competition is fierce, we need a complementary institution that is relatively out of the market.

Dingqiang Liu
ECAF has no special rights, if they meet the arbitration requirements, so be it.

Achilles
It can be kept, but no need to be ECAF, even there is no need for an institution with a final review. Thanks to the market competition mechanism, as long as the arbitral tribunal can participate, it can be terminated first-instance if there is no special agreement.

5, Whether the re-agreed is allowed if the default arbitral tribunal is not agreed?

Shaojun Huang
It is involved in whether the content can be modified or voted to modify the current content. If it is allowed, it should be re-agreed.

Siqi Yao
If both parties agree, it can be re-agreed.

哥舒·泮
According to the international arbitration law, give EOS a professional reference basis, select the corresponding law according to the scope of appealing defined by law, and compare the laws of Chinese and foreign arbitral tribunals for reference.

1. Will the on-chain regtribunal take the responsibilities for the mistakes for the regarbitrators and relative staff?

Shaojun Huang
It should. Everyone should take the responsibility for his behavior, especially for arbitration cases. If there is no result accountability and no restraint, the arbitration will lose its impartiality, but the arbitrator’s responsibility should be limited, and there is an organization to guarantee the impartiality of the arbitrator’s punishment or reward. If the arbitrator is unfairly treated, he can appeal to a given tribunal and get protected.

Siqi Yao
I personally think the tribunal is only a platform, it should not be required to take too much responsibility. Additionally, reputation damage after committing a mistake is a punishment. As for whether the forum itself chooses to bear the loss, it is the forum’s own choice.

Achilles
For ensuring the long-term development of EOS and avoiding malicious arbitration be made by arbitrators, a corresponding protection mechanism is needed.