Junction of digital identities and international arbitration

Junction of digital identities and international arbitration

Digital identities have infinite paradigm-shifting prospects. One can be whoever or whatever want to be and whenever it is. With no wide-ranging instruction and no compulsion in the digital era, one can implement human form online through unidentified blockchain connections. Here, we try to discover the merging of digital identities and international arbitration

The progress of digital identities

Manipulating numerous characteristics human can be parents, children, elders, juniors, employers, employees, husbands, wives and so on and so forth at any point of time.

Through self-styled usernames and handles use since inception of the internet, separate digital identities have been produced by people for their own. Thus hacker idea came into being. Contrarily it's often spoke that Libertarian ideal cannot be judged by one's identity in the "real world". Probably Peter Steiner rightly in his well-known 1993 New Yorker cartoon: "on the Internet, nobody knows you're a dog".

Due to three coincidences the digital world might have continued self-styled. Facebook is the leading one with its unique early success as the users to sign up with their real names. LinkedIn, another social network, followed the path, which was built on people's "real world" identities. There are many places where people choose to remain virtual. It includes Facebook to name now with its sister-network, Instagram.

The absence of a currency instinctive to the digital world takes the next position in history. Hence developed compulsory financial technology online commerce like credit cards and governed by individual countries' existing financial regulations like AML and CTF. The growth of crypto currencies is one way to emit this by using a new, regionalized financial system.

The third accident of history is the technology which has improved and the medium of the digital world has advanced. Our selections have proceeded from username to profile pic to virtual reality (VR) avatar.

Digital world is a merge of ourselves and sometimes not. Sometimes reality matches the way we depict ourselves and sometimes it's not. Its just like our real life, we possess multiple, fluid digital identities.

What is "real life" anyway when we spend majority of our life online? In 2021 Mark Zuckerberg, founder of Meta (formerly Facebook) expressed on the Metaverse, said, "I think that the phrase 'the real world' is interesting. I think that there's a physical world and there's a digital world, and increasingly those are sort of being overlaid and coming together, but I would argue that increasingly the real world is the combination of the digital world and the physical world and that the real world is not just the physical world".

Will we soon be able to legally know our digital identities similar to or more important than our physical identities?

What is it like to create a digital identity in the Metaverse, first though the next frontline of the digital world?

Creating an avatar in the Metaverse

To quote Mark Zuckerberg again, the Metaverse will be the "next chapter of the Internet… an embodied internet where you're in the experience, not just looking at it".

We have been exploring the Metaverse using Meta's Oculus Quest 2. When designing their avatars, users have the option to select their "physical features" and "clothing and accessories". Under "physical features", there are 14 parameters including body shape, skin tone, hair, face shape, face markings, face lines, eyes, eyebrows, eyelashes, nose, mouth and facial hair. And under clothing and accessories, there are seven parameters including outfit, eyewear, head-ware, bindi, ear piercings, nose piercings and hearing devices. Meta hopes in the future that independent creators will design even more appearances for sale.

Implications for the practice of international arbitration

Interesting questions on international arbitration community peep in with our experience to study:

Should we expect an alignment of digital and "real" identities?

Will we draw the line at appearing as a giant friendly robot in a formal hearing? Or an online conference? If we do, what does this say about our implicit biases towards the way people look, sound and act?

Arbitrator trust and anonymity

The concept of trust is essential to the legitimacy of the international arbitral system. It includes trusting the appointed arbitrators to resolve a dispute.

In addition, it is current practice to identify arbitrators by their real names in procedural orders and awards.

But our experience in the Metaverse made us wonder: is an arbitrator's "real" identity relevant at all?

Party anonymity

Issues also arise from not having a "real" identity at all. As discussed above, an alternative financial system is emerging to keep users anonymous. Thus, parties transacting in the Metaverse may never know each other's real or legal identities.

Current practice generally requires the disclosure of parties' and counsel's "real" names and physical addresses at the outset of the proceedings. See, for example, the ICC Rules of Arbitration 2021, Article 4(a) and (b) and Article 5(a) and (b); the LCIA Rules of Arbitration 2020, Articles 1(i) and 2(i) and 4.7; the HKIAC Rules of Arbitration 2018, Articles 4.3 and Article 5.1; and the ICDR International Dispute Resolution Procedures: International Arbitration Rules 2021, Articles 2(3)(b) and 3(3); to name a few.

Freezing orders and award enforcement in relation to anonymously held assets

Since tribunals have limited power to compel third-party crypto exchanges to act, parties may consider seeking court orders to "compel crypto exchanges to provide details of their customers (for anonymous accounts) or freeze the account of an unknown party who could be referred to as "beholder of the crypto wallet".

Ultimately, digital identities are highly likely to become more and more agreeable with our "real identities", sparking a number of legal and procedural questions for the international arbitration community. In possibly unpredictable way, it may be worth the international arbitration community proactively considering the norms of engagement we think will serve us best.