EOS Amsterdam - EOS Telegram - EOS Arbitration Public Chat Summary - Sep 19-20th
Kevin Rose - EOS New York introduces the discussion:
“We are requesting feedback from the community: https://medium.com/eos-new-york/free-market-dispute-resolution-regarbitrator-regforum-request-for-comments-74e31bcb84b0”.
Dmitri Pro MEET.ONE mentions:
“To Arbitration on chain is a big step for transparency. Till this moment it was a missed part in ecosystem.”
Kevin Rose - EOS New York in response:
“We're trying to set a baseline for any aspiring arbitrators looking to do work on EOS.
The salient points of the agreement are the info standards. By requiring some standard of information to be on chain marketplaces can be built that query the tables and pull the information like language, fee, expertise.But there's more than just "code of conduct" items. It's part service agreement.”
Sun Tzu asks:
Is this voluntary dapp-level arbitration? Or is this base-layer arbitration?
Josh Kauffman - EOS Canada 🇨🇦 asks:
“Can someone help me understand why this question even comes up. The way i see it:
The proposal is strictly to create a way for everyone to point towards an account that has been listed as an arbitrator and say "yes they are registered" and i can also connect them to an arbitration forum and say there "yes they are registered". They are both on chain. From there, i can link validity, and confirm that this is indeed the name forum from [Ricardian Contract]. I can also see that disputing users Alice and Bob both agreed to [Arbitrator] as their arbitrator, and i can link his identity using the keys he provided and they pointed to.
Is there any thought that ECAF wouldn't want to utilize these contracts as well, as they should help with validating identity of an arb (which is part of the BP/arbitration relationship).”
Sun Tzu responds:
“The way I read this, any forum can establish itself in the regforum table. Any arbitrator can establish itself in the regarbitrator table. Then, by Constitution, the BPs will accept any order delivered by the above. It would seem to be that there a piece missing here. The way it looks to me right now is that anyone can put their names in and cause an arbitrator order to flow to BPs with obligation to enforce. What is the authorisation step for adding to those tables?”
Kevin Rose - EOS New York answers him:
“A requirement to issue an arbitral award is to provide on-chain proof of consent to arbitrate under the RDR that issues the award. Without the provable on-chain consent of an agreed contract it cannot be accepted. So anyone can submit themselves as a forum just like anyone can register as a BP. But like a BP, someone has to choose you otherwise you sit idle.”
He then adds:
“There is an issue if they're found to have violated that code of conduct. How to appeal an arbitrator's misconduct is something I haven't figured out. That said, the entire "code of conduct" part could be stripped out but the most important pieces are the standard service offerings that are outlined in both Ricardians.”
Ryan Bethem - EOS42 asks:
“Do we need electorate, arbitrators, and judges in this ecosystem? Do we need other law enforcers, as well? No judgement here, just interested in levels of enforcement this society thinks is necessary.”
Sun Tzu answers:
“So there will be some wordsmithing in the C to establish ECAF as the default, and "any forum or arbitrator listed in reg''s as alternates when chosen by parties”.
Kevin Rose - EOS New York responds to him:
“We’ve written a proposed language for this not included in our proposal.”
Justin Buck tells him:
Really would actually like to see a large number of “forums” of arbitrators whose reputations are continuously being voted on by the community, based on their work.
Vincent Ho asks the question:
“Can we just stick with the current model of ECAF being the base layer, manual, without trying so hard to automate the process and see how it works out first.
We are now trying so hard to automate and making it democratic without first evaluating if current model works. The new model, whatever it may be, it seemed, is just as flawed and experimental. Evaluating the current model rather than innovating with new model seemed more productive than going around in circles. EOS had a very foolproof roadmap in theory as well .... And everything starts to hit it real hard in reality.”
Ben Gates gives his opinion:
“For what it's worth I think that forums need to be nominated rather than individuals. I also think all forums need to adhere to the same set of standards. I just worry that if forums are in competition then you could end up with the majority just going with the one which offers the most appealing processes. E.G time to resolve a case. Whilst on the surface this seems good, it may jeopardise the standards of arbitration/the equality of how parties to the arbitration are treated. I don't mind free market as long as certain RDR standards are consistent no matter which forum.”
Kevin Rose - EOS New York
[In reply to Ben Gates (ECAF)]:
“Sounds like over regulation. We don’t nominate dapps that are allowed to operate on the network. Let people discover what they find valuable and let forums be free to run their business how they want to.”
Sun Tzu in response to the previous comments that people might prioritize time when the issue is theft, but when the issue is breach, they'll prioritize the process.
“Old chinese aphorism - be careful what you wish for 🙂. The judiciary are singularly resilient to democracy as a method of control. If you look at the say the USA supreme court rulings, they are trawled over by lawyers and students looking for reason & opinion. Many with completely opposing viewpoints. If legal scholars can't agree, what hope the populace? And if body popular cannot come to understanding, what use democracy? Or, look at the BPs. How's it working? Where's the correlation between BP moves up & down and the quality of block delivery to the community? But - people almost certainly have picked the forum before they know whether the issue is theft or breach. No? This is part of the problem with free market as a concept being applied to arbitration - there are almost no consumers who have the chance to switch from one arb forum to another for searching reasons; and those that do we might not want to trade with.... if you get my meaning. So normal market competition forces - switching - are absent. Hence, free market becomes entrenched silos, the very thing we thought we'd get away from.”
Greg G:
[In reply to Sun Tzu]
“I have had a similar discussion. It may be that it becomes about choosing EOS to begin with, and the advances in security, freedom, fees and whatever else get outweighed by the uncertainty surrounding resolution when things go wrong. I don't know. How binding would a decision by a generally commercial arbitration committee be if the issue they resolved was theft? Will they even be equipped to handle it? It also seems to me that a contract can be written "any breach of this contract shall be settled by X" and "theft/alleged theft" wouldn't be covered.”
Sun Tzu replied to him:
“It would be binding if the ruling strictly limited itself to damages. It would be binding if it enforced over the EOS chain. It would be binding if no party challenged it. It would be binding if the national courts accepted EOS declaration of soveriegnity. It would be binding if the thief did not contest it.”
Kevin Rose - EOS New York replies to Greg G question:
When you say you are forced to use ECAF, what do you mean?:
“The likelihood that arbitration between myself and another party is binding i.e. enforceable is reduced dramatically if I name any other forum than ECAF in the contract we have. This is not to mention the costs to arbitrate increase because at the end of the arbitration process with the alternative forum I must still go through ECAF anyway as no other source of authority is recognized by block producers. This assumes that block producers need even be involved.”
Thomas Cox asks:
“Why would BPs not enforce a non ECAF order? And if for some reason BPs did (which is baffling to me), why wouldn't ECAF act as a pass through entity saying "yes this is a valid award, because there is proof that the disputants named Arb A, etc etc, therefore ECAF says enforce it"? As the victor in the initial case, I don't need to re-litigate with ECAF, I just file a dispute with ECAF against the foot dragging BPs demanding enforcement. Bada bing, bada boom. I think the functions being offered here are vital for the health of any arbitration marketplace, however I question some aspects of the implementation. I will attempt to frame my concerns coherently later today.”
Kevin Rose - EOS New York answers him:
“They’d enforce it if our proposal was ratified. That’s the point of the proposal. In the ECAF RDR “When an external court or similar authoritative body claims and asserts its jurisdiction on a matter, and issues a court order, subpoena or other service relating to or arising out of the blockchain to a member of the Community, the order is to be filed as a dispute, with the external court as Claimant.” Sure, the arbitrator may CHOOSE to enforce the external order. But it’s the same issue with BPs evaluating valid arbitration orders THEN executing them. They should simply execute them unless there is some kind of constitutional crisis at hand. The mere act of ECAF accepting a dispute claim from an external arbitrator undermines the authority of that arbitration and the confidence of the parties that the original order is binding.”
Greg G proposed a scenario:
“FIAT: A and B make a contract. A to pay B $1m upon satisfaction. AAA for disputes. Something goes wrong. AAA decides what happens. What happens now?
EOS: A and B make a smart contract. A to pay B $1m upon satisfaction. Money goes into smart contract. AAA for disputes. Something goes wrong. Smart contract freezes OR money goes one way or the other. AAA decides what happens. What happens now?”
Kevin Rose - EOS New York replies him:
“FIAT: The award creditor moves to enforce the award following the protocol of enforcement in the US (assuming this is where it's taking place).
EOS: Couple of things could happen depending on the direction we go. Upon entering dispute mode the contract owner permissions are reset to the forum public key listed on their account. Now it can't unfreeze without the AAA doing something. Once the award is issued, the AAA can reset the owner key to the one requested by the award creditor. The award creditor does whatever they want with the funds per the award issued by the AAA. BPs aren't involved. This would be pretty neat.
Option 2: Contract is frozen and CANNOT be unfrozen except by superpermission intervention by BPs. Award creditor takes the award to the BPs for enforcement. Because the forum is registered on-chain and the award is issued on-chain from the registered forum account, the BPs feel comfortable that the award is valid and recognizes it's enforceability.
This involves a few moving pieces to happen.
- Language is adopted into the constitution that recognizes arbitration via regforum or regarbitrator as a valid, enforceable, and binding method of dispute resolution on-chain. Meaning our proposal for regarbitrator and regforum is approved.
- Sagewise's product is bought by worker proposal funds and open-sourced.
- The RDR of ECAF is modified in section 5.4 External Courts so that language preventing #1 from happening is changed or removed.
Kevin Rose - EOS New York
Here is a starting point (or finishing point depending on what you think about it) for option
1:
This portion will formally recognize The New York Convention of 1958 allowing all foreign arbitral awards to be recognized if award author is registered on-chain.
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958, shall be recognized by all members of this blockchain {chain_id} where the author of any such arbitral award is duly registered on-chain {chain_id} via {regarbitrator}
This portion states that valid arbitration is binding.
Any on-chain provision included in any on-chain transaction or an on-chain smart contract evidencing a transaction involving EOS blockchain based property to settle by arbitration a controversy thereafter arising out of such on-chain smart contract or on-chain transaction, or the refusal to perform the whole or any part thereof, or an agreement on-chain to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable.
This portion makes it clear that agreements must specify a forum and/or arbitrator for arbitration to be available to parties to a dispute.
If any controversy or claim arising out of or relating to such an on-chain agreement provision, on-chain transaction, or on-chain smart contract or on-chain Ricardian contract be made for a method of naming or appointing an arbitrator or arbitrators through {regforum} or {regarbitrator}, such method shall be followed. Only upon the application of either party to the controversy {regforum} or {regarbitrator} shall act under the said agreement with force and effect.
This portion defines what is “on-chain”
“On-chain”, as herein defined, means any transaction which is cryptographically validated by an elected Block Producer, or any smart contract or Ricardian contract code which can be viewed, audited, and verified as existing on the EOS mainnet blockchain in the last irreversible block.
Now if this were approved, ECAF is basically dead. SO, you can rewrite it to include ECAF as the forum if one is not specified between parties. Here is the alternative if ECAF is to be included. If any controversy or claim arising out of or relating to an on-chain agreement provision, on-chain transaction, or on-chain smart contract or on-chain Ricardian contract be made for a method of naming or appointing an arbitrator or arbitrators through {regforum} or {regarbitrator}, such method shall be followed; but if no method be provided therein, then upon the application of either party to the controversy the EOS Core Arbitration Forum shall designate and appoint an arbitrator or arbitrators, as the case may require, who shall act under the said agreement with the same force and effect as if he or they had been specifically named therein. The resolution of such controversy wherein no {regforum} was named will be administered by the EOS Core Arbitration Forum in accordance with its Rules for Dispute Resolution.”