“JOURNAL OF SCIENCE-INNOVATIVE RESEARCH IN
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LEGAL ASPECTS OF THE RESOLUTION OF CONTRACTUAL
DISPUTES ARISING FROM THE CROSS-BORDER USE OF ARTIFICIAL
INTELLIGENCE, AUTOMATED DECISION MAKING AND SMART
CONTRACTS
Master’s student of Tashkent State University of Law in International
Arbitration and Disputes Resolution, senior specialist of Tashkent city
department of Justice Sharapova Rayhon Bekbergen qizi
e-mail:
Abstract
. This article analyzes the role of artificial intelligence technologies
and smart contracts in legal relations, and the legal mechanisms for resolving
disputes that arise during their use. Proposals for improving national legislation in
this area have also been developed.
Keywords
: Artificial intelligence, smart contracts, ADR, ODR, contractual
dispute resolution, cross-border transactions, automated decision-making, justice,
privacy, data protection, jurisdiction, legal consequences.
Annotatsiya
. Ushbu maqolada sun’iy intellekt texnologiyalari va smart
kontraktlarning huquqiy munosabatlardagi o‘rni, ulardan foydalanish jarayonida
yuzaga keladigan nizolarni hal etishning huquqiy mexanizmlari tahlil qilinadi.
Shuningdek, ushbu sohada milliy qonunchilikni takomillashtirish bo‘yicha takliflar
ishlab chiqilgan.
Kalit so‘zlar
: Sun’iy intellekt, aqlli shartnomalar, ADR, ODR,
shartnomaviy nizolarni hal qilish, transchegaraviy bitimlar, avtomatlashtirilgan
qarorlar qabul qilish, adolat, maxfiylik, ma’lumotlarni himoya qilish,
yurisdiksiya, huquqiy oqibatlar.
Аннотация
. В данной статье анализируется роль технологий
искусственного интеллекта и смарт-контрактов в правоотношениях, а также
правовые механизмы разрешения споров, возникающих при их
использовании. Также разработаны предложения по совершенствованию
национального законодательства в этой сфере.
Ключевые слова:
искусственный интеллект, смарт-контракты, ADR,
ODR, разрешение договорных споров, трансграничные транзакции,
“JOURNAL OF SCIENCE-INNOVATIVE RESEARCH IN
UZBEKISTAN” JURNALI
VOLUME 2, ISSUE 11, 2024. NOVEMBER
ResearchBib Impact Factor: 9.654/2024 ISSN 2992-8869
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автоматизированное принятие решений, правосудие, конфиденциальность,
защита данных, юрисдикция, правовые последствия.
Background
. Along with the development of modern technologies, artificial
intelligence and smart contracts are increasingly widely used in civil-legal relations.
This, in turn, leads to the emergence of new types of legal disputes. This article
examines the legal aspects of contractual dispute resolution, analyzes the
implications of the use of artificial intelligence-based systems, and presents possible
solutions to resolve conflicts arising on issues of fairness, privacy, data protection,
and jurisdiction.
Methodology
. In order to study the legal aspects of the resolution of
contractual disputes arising from the use of artificial intelligence, automated
decision-making and smart contracts across borders, this research paper uses several
types of methods. The analysis of the latest achievements and results in the field of
scientific literature, international law, artificial intelligence and smart contracts is
the main foundation for the introduction to this scientific study and for its further
study and research in the future.
Discussion
. Before entering this topic, it is necessary to touch on concepts
such as artificial intelligence, smart contract, and blockchain technologies and learn
them in depth.
What is artificial intelligence (AI)
?
AI
is computer systems that simulate
human mental activity, and these systems perform tasks using machine learning,
deep learning, and neural networks. AI has the ability to analyze data, make
decisions, and solve problems. In Uzbekistan, the legal status of AI is determined by
a number of normative legal documents. In particular, Presidential Decree No. 4996
dated 02.17.2021
“On measures to create conditions for the rapid introduction of
artificial intelligence technologies”,
PD No. 4699 dated 04.28.2020 –
“On digital
economy and electronic government”
PD No. 358
“On approval of the strategy for
the development of artificial intelligence technologies until 2030”
and the
“Digital
Uzbekistan – 2030”
strategy.
Smart contracts
are self-executing digital contracts. A smart contract is an
automated and enforceable contract. Although automated by a computer, some parts
“JOURNAL OF SCIENCE-INNOVATIVE RESEARCH IN
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may require human intervention and supervision. Rights and obligations can be
enforced by law or by not changing the computer code
1
.
Smart contracts are typically used to automate the execution of an agreement
so that all parties involved can get immediate results without any intermediary
involvement or loss of time. They can also automate the workflow to trigger the next
action when predefined conditions are met
2
.
Artificial intelligence (AI) and smart contracts are recognized as new objects
of civil law. A smart contract is self-executing software based on blockchain
technology that converts contract terms into digital code and executes automatically.
When talking about smart contracts, the term Blockchain should also be
mentioned.
Blockchain
is a database of transactions consisting of a chain of
sequential digital blocks and
a system in which all smart contracts are stored
.
Anyone can see the information in the blockchain, but cannot change it. In
blockchain technology, it is automatically executed based on programmed
conditions, and it reduces intermediaries, helping to automate processes.
Here we will focus on the advantages of a smart contract over conventional
contracts:
Immediate performance: After the condition is fulfilled, the contract
is performed immediately;
No paper document: no manual work or time spent comparing errors;
Transparency: Encrypted records distributed among participants
prevent changes;
Security: blockchain records are difficult to break due to encryption
and interdependence;
No intermediaries: Smart contracts eliminate the need for
intermediaries, reducing delays and fees.
The Law
“On Electronic Commerce”
, the Law
“On Electronic Document
Circulation”
and the norms of the
Civil Code of Uzbekistan
on electronic
transactions serve as the legal basis for the regulation of Smart contracts.
1
“Smart Contract Templates: foundations, design landscape and research directions”, Dr. C. Clack, V.
Bakshi, Dr. Lee Braine (4 Aug 2016), available at https://arxiv.org/pdf/1608.00771.pdf v3 [cs.CY] 15 Mar
2017
2
https://www.ibm.com/topics/smart-contracts
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Legislation in the field of AI and smart contracts is developing rapidly in the
world. Therefore, a number of problems arise in this area. The following main
conflicts may arise when using smart contracts:
Disputes caused by software code errors,
Disputes due to misunderstanding of the contract,
Disputes caused by technical malfunctions,
Disputes related to data security.
As for the US experience with AI and smart contracts,
the Uniform
Commercial Code (UCC), the Federal Arbitration Act,
and each state’s own laws
on AI and smart contracts are regulated, where disputes are mostly settled through
ADR resolution and ODR – Online Dispute Resolution platforms are common. In
the
US
judicial system, disputes in the field of AI and smart contracts can be
appealed to federal courts, state courts, and courts for special technological disputes.
Here, let’s talk about the ODR system.
Online Dispute Resolution (ODR)
is a modern method of dispute resolution, which is implemented using the Internet
and digital technologies. Let’s consider its main aspects. Main features:
Remote – the parties do not have to be in the same place (there are no
geographical restrictions),
Time savings – faster than traditional court proceedings,
Costs are lower – court costs and transport costs are saved,
24/7 access,
Documents are stored in electronic format.
ODR can be
in the form of online negotiation platforms, electronic
mediation, online arbitration, automated negotiations.
The ODR system is developing day by day, and many countries are
introducing it into their legislation. The ODR system is currently under development
in Uzbekistan. By analyzing some cases, you can find the elements of ODR.
Including
“E-sud” electronic system – provides an opportunity to submit and
monitor applications for civil cases online,
“JOURNAL OF SCIENCE-INNOVATIVE RESEARCH IN
UZBEKISTAN” JURNALI
VOLUME 2, ISSUE 11, 2024. NOVEMBER
ResearchBib Impact Factor: 9.654/2024 ISSN 2992-8869
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The Law on Mediation
allows the use of electronic means in the
mediation process, although not completely online.
Summarizing the above, we believe that it is necessary
to establish the ODR
system in Uzbekistan, expand the digital court system, including the
digitalization of mediation processes, and the introduction of electronic
arbitration mechanisms.
The use of smart contracts, which we saw above, is becoming more and more
widespread in the market of Uzbekistan. However, none of the legal documents
mentioned above covers the regulation of disputes arising in smart contracts.
Therefore,
our second proposal
is that it is
necessary to form a special legislative
framework coordinating the field of artificial intelligence and smart contracts.
It is necessary to make additions and amendments to the Law
“On Electronic
Commerce”
related to smart contracts and/or to adopt a separate law on the legal
regulation of smart contracts.
In addition, it is necessary to establish procedures for resolving disputes
regarding smart contracts and to develop mechanisms to ensure the legal force of
smart contracts.
Thirdly
, it is
necessary to develop a mediation institute for smart
contracts and establish special arbitration courts or arbitration – “Smart
contract arbitration”.
Even if the workload in civil courts increases, it is natural to
call arbitration courts under smart contracts when inter-district courts remain, not in
each district. But the field of artificial intelligence and smart contracts is an area
where a huge revolution will take place in the next 10 years in the world market and
in the conditions of Uzbekistan. Therefore, disputes will increase in the field of
demand.
Fourthly
, we believe that
a system of training specialists in the field
should be established in the country.
Also, the legal status of contracts concluded by means of artificial
intelligence and automated systems still does not exist in the world, issues of
ensuring their validity and enforceability are one of the tasks facing international
law. In addition, it is necessary
to clearly define the issues of legislation and
jurisdiction used in cross-border operations, and to develop international legal
standards.
“JOURNAL OF SCIENCE-INNOVATIVE RESEARCH IN
UZBEKISTAN” JURNALI
VOLUME 2, ISSUE 11, 2024. NOVEMBER
ResearchBib Impact Factor: 9.654/2024 ISSN 2992-8869
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In conclusion,
it should be noted that as digital technologies continue to
develop, the legal system must also adapt to these changes and develop appropriate
regulatory mechanisms. This, in turn, creates an opportunity to ensure the stability
of contractual relations and effectively resolve disputes.
Artificial intelligence, automated decision-making systems and smart
contracts are important advances in modern technology that are fundamentally
changing contractual relationships. However, the use of these innovative
technologies across borders creates a number of legal problems. To summarize the
situations analyzed above, in order to regulate AI and smart contract legislation, it
is first necessary to adapt national legislation to international standards, form a
special legal framework in the field of artificial intelligence and smart contracts, and
develop modern dispute resolution mechanisms (ODR, electronic arbitration).
“JOURNAL OF SCIENCE-INNOVATIVE RESEARCH IN
UZBEKISTAN” JURNALI
VOLUME 2, ISSUE 11, 2024. NOVEMBER
ResearchBib Impact Factor: 9.654/2024 ISSN 2992-8869
322
REFERENCES/IQTIBOSLAR/СНОСКИ:
1.
Savelyev A.I. Smart-kontrakty i avtomatizatsiya dogovornyx
otnosheniy // Zakon. 2017. №8,
2.
Szabo N. Smart Contracts: Building Blocks for Digital Markets, 1996,
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4. Wright A., De Filippi P. Decentralized Blockchain Technology and
the Rise of Lex Cryptographia, 2015,
4.
“Smart Contract Templates: foundations, design landscape and research
directions”, Dr. C. Clack, V. Bakshi, Dr. Lee Braine (4 Aug 2016), available at
https://arxiv.org/pdf/1608.00771.pdf
v3
[cs.CY]
15
Mar
2017
1
https://www.ibm.com/topics/smart-contracts
5.
The Law of Uzbekistan “On Mediation”,
6.
The Law of Uzbekistan “On Electronic Commerce”,
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“Regulation on Electronic Document Circulation”,
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Presidential Decree “On measures to create conditions for the rapid
introduction of artificial intelligence technologies”,
9.
Presidential Decree “On digital economy and electronic government”,
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Presidential Decree “On approval of the strategy for the development
of artificial intelligence technologies until 2030”,
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Uniform Commercial Code (UCC) AQSH,
12.
Federal Arbitration Act (AQSH),
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https://www.international-arbitration-attorney.com/ru
