Habib Al-Mulla writes to CNN: Is the technology tsunami sweeping away current legislation?

This article was written by Dr. Habib Al Mulla, Managing Partner, Habib Al Mulla & Associates. The opinions expressed below are those of the author and do not necessarily reflect the views of CNN.

The rapidly changing technological landscape presents new challenges for regulators, who are challenged to adopt strategies that keep pace with technological advancements and address the concerns of this sector. In my opinion, technological policies occupy a place that requires a similar approach to what governments adopt in dealing with public issues such as health policies.

1: The need for legislative reforms to clarify the legal framework for digital assets

Considering that the countries that follow the Latin legal approach, including the Arab countries, cannot develop legislation related to digital assets through jurisprudence, it is very important to have legislation that addresses the problems arising from and including technical development.

a. Cryptocurrencies must be classified as denominated money in order for claims to be filed to claim their value. Otherwise, the ability of litigants to obtain damages judgments and execution orders in digital assets becomes very thorny.

B. Digital assets should be classified as personal property as this will help trace these assets when a dispute arises regarding the digital asset.

c. Data protection laws must be amended and drafted in line with technological advances to limit the threats posed by unknown AI algorithms (which use people’s personal data) to the rights of individuals including their right to privacy.

Dr.. It should be clarified whether cryptocurrencies should be treated as securities or as commodities for regulatory purposes. Securities are regulated by multiple regulators in different countries, and technology companies may face a lot of action and penalties from regulators that could be avoided if the asset is defined as a commodity.

2: The need for legislation to value digital assets

a. It is critical that there be legislation outlining whether bitcoins and other cryptocurrencies can be accepted as collateral by courts and arbitral tribunals.

B. Given the constant fluctuation in the value of these assets, lawmakers need to clarify whether judgments in cryptocurrency cases are enforceable in kind or if compensation is the only avenue available.

One of the judgments that can be cited in this area is the v Quoıne B2C2 judgment from the Singaporean courts if it ruled that for volatile assets such as cryptocurrencies, the physical performance of the contract would cause significant hardship to the parties and instead ruled for compensation.

c. The legislation should address how to reconcile different types of cryptocurrencies with each differing in interchangeability, monetization, storage and delivery costs in light of the parties’ commercial expectations.

3: Developing relevant legislation such as:

a. Bioengineering legislation, such as genome modification and synthetic biology, that may have an impact on the human species.

B. With technological advancement, threats to sectors such as health and concerns related to the food, water security and energy sectors are increasing. Governments need to adopt legislation that effectively addresses these dangers. In 2015, the Ukrainian power grid was subjected to a cyberattack. There are many other examples of the damage that cyberattacks can cause.

Second: Recent trends in technology-related disputes and the use of technology to effectively resolve disputes

1- will lead Technological advances to increase conflicts In addition to disputes related to data privacy and security, technological development will lead to disputes in the areas of intellectual property, taxation, competition, finance, insurance, and a wide range of commercial disputes, class actions, product liability disputes, supply chain issues, and others.

2- Other potential disputes such as:

a. Cryptocurrency fraud cases involving victims of cryptocurrency hacks and fraud.

B. Impersonating unknown (numeric) identities. In the past, the defendants were known, but today the true identity of the owners of digital assets may not be known, and therefore the notification of the defendants may become impossible, and it may be necessary for the courts to consider the use of digital wallets for the purposes of notification. In D’Aloia v People Unknown, Binance Holdings Limited & Others [2022] EWHC 1723 (Ch), the English High Court served court documents on the two Airdrop defendants’ digital wallets because their identities were unknown.

c. Cryptocurrency issues may involve third parties, such as cryptocurrency exchanges and holders, in litigation. As these third parties may possess embezzled or stolen funds, and therefore they can be included in the lawsuit and ordered to pay compensation if it is found that they are responsible for embezzlement or fraud.

Dr.. Claims against operators, networks and developers.

H. Investors may file lawsuits against lending platforms for not making clear the risks of investing, for example. There is an arbitration case filed under Hong Kong’s HKIAC rules against a cryptocurrency exchange for losses incurred by dealers during the downtime of online trading platforms.

B- The preference of adopting arbitration in technology disputes:

1. Unlike litigation, arbitration provides trade secret protection and offers flexibility and privacy to the parties.

2. It may be necessary to find an arbitration court specialized in technological issues, as is the case in the Court of Arbitration for Sport (CAS).

3. Blockchain arbitration systems can also be used. For example, the Kleros Arbitration System is a crypto-based application that allows blockchain users to act as “jurors” and vote on a dispute.

4. Enforcement of arbitral awards is usually easier because of the New York Convention.

5. If arbitration is not possible due to the lack of an arbitration agreement, the Singapore Mediation Agreement (SCM) provides assurance of effective dispute resolution through mediation for users as more countries ratify the SCM.

C- Possibility of using technology to improve the dispute settlement process

a. AI can be used for effective dispute resolution as it simplifies procedures, makes dispute management and procedural steps more efficient and also facilitates other procedures such as asset tracing.

B. Artificial intelligence can assist in the appointment of arbitrators when assessing the independence and integrity of arbitrators.

c. Using artificial intelligence, it is possible to search for experts in arbitration and litigation, as well as to search for their independence and impartiality.

Dr.. Artificial intelligence can be used to process documents, saving time and cost.

H. Artificial intelligence can be used to write meeting minutes without human intervention.

And the. Artificial intelligence can be used to conduct legal research, search for sources, and translate them from one language to another.

g. GPT chat technology can be used in legal business. Although this technique may not be useful at the current stage for writing case lists, it can be used for the following:

1. Acknowledgment of receipt of emails from courts and lawyers.

2. Send emails with documents attached.

3. Summarizing judgments, expert reports, and other documents required for a litigation process that would not be cost-effective for the client if the process were not at least somewhat semi-automated.

While there are some concerns that need to be addressed at various levels, it cannot be denied that technological development is a boon to humanity. Whether this blessing becomes a curse for humanity depends on how quickly it responds to the challenges created by technology. I believe the legal community will play a critical role in mitigating the challenges and risks presented by the technology industry, but technology experts and lawyers must be involved in drafting such legislation while promoting public awareness programmes.

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