Construction of Transnational Commercial Cyber-Arbitration Mechanism Supported by Cloud Computing Technology

Abstract： Arbitration is currently the main form of dispute resolution in international commercial activities， and trans?national commercial cyber-arbitration is becoming increasingly important in the current economic environment andcommercial practice. The core features of international commercial arbitration are self-determination and transnation?ality， which provide an effective guarantee for innovation in the operational mechanism of arbitration. In essence， trans?national commercial cyber-arbitration is a way to respond to the complexity of contemporary international commercialactivities with autonomous innovation based on a network platform and guaranteed by a legal environment. The prac?tice of transnational commercial cyber-arbitration in China needs to improve its cooperation of legal systems， inherentproblems of the network platform， and insufficient coordination of other legal services. China promotes the amendmentof the Arbitration Law further to improve the service of process and evidence clauses. Arbitration practice needs totransform the cyber-arbitration platform with cloud computing and AI and focus on data confidentiality and party au?tonomy in the platform's operation. The governments need to strengthen the integration of arbitration institutions withother legal service institutions and promote the data connection between arbitration and judicial authorities.

Keywords： transnational commercial arbitration; cyber-arbitration; arbitration law; cloud computing; AI

CLC：D 915.7 DC：A Article：2096?9783（2023）02?0138?11

1 Introduction

Arbitration is currently the main form of dispute resolution in international commercial activities， and the patternof arbitration practice is increasingly transformed with the complexity of international commercial activities. Comparedwith judicial trials， arbitration has a series of advantages such as procedural flexibility， the confidentiality of results，freedom of choice， and negotiability of application， especially trusted by various multinational enterprises and widelyused in international cargo transportation disputes， international sales and purchase contract disputes， and cross-bor?der e-commerce consumer disputes. For China， China International Economic and Trade Arbitration Commission（hereinafter referred to as CIETAC） established the Domain Name Dispute Resolution Center in 2000， the Online Dis?pute Resolution Center in 2005， and the CIETAC Online Arbitration Rules in 2009， based on which it mainly acceptsdomain name disputes such as URL grabbing and wireless web grabbing. CIETAC is even in 2020 to establish an intel?ligent courtroom platform and release relevant video courtroom specifications. The Guangzhou Arbitration Commission（hereinafter referred to as GZAC） started to reshape the case handling process by introducing the Internet model in2014， not only uploading procedural functions such as filing， service， cross-examination， trial， and defense， but alsogradually introducing blockchain， cloud platform and AI to strengthen the case handling capability of cyber-arbitra?tion. In 2020， GZAC released the Recommendatory Standard for Internet Arbitration， an important technical environ?ment standard for global online arbitration. On July 30， 2021， the Arbitration Law of the People's Republic of China（Revised） （Draft for Comments） （hereinafter referred to as the Arbitration Law 2021 （Revised）） was released， whichspecifies， in particular， Article 30 and Article 34， that arbitration hearings may be conducted over the Internet and ser?vice of arbitration may be effected by e-mail or instant messenger， setting the legal framework for the implementationof cyber-arbitration.

Since 2020， international commerce has been hampered at the level of goods， people， and capital due to the COV?ID-19 epidemic. In this context， cyber-arbitration has its unique advantages. In essence， cyber-arbitration is the trans?plantation of traditional arbitration rules into the Internet platform， thus enabling commercial entities in different spac?es to communicate across geographical boundaries at the same time， thus reducing arbitration costs and improving arbi?tration efficiency. However， in China's established practice， although several arbitration institutions such as CIETACand GZAC have found a practical framework for cyber arbitration， they have not effectively addressed the \"structuralconflicts\" caused by the transplantation of the model， nor have they established procedural， evidentiary， and servicestandards for arbitration， nor have they established a complete cyber platform. More crucially， online arbitration is notan isolated system; its effective operation depends on the effective interface and efficient cooperation of different meth?ods. It is also necessary to clarify the relationship between online arbitration and other legal services and judicial trialsto optimize the overall environment of cyber-arbitration. This paper will discuss and analyze the issues mentionedabove with a view to proposing valuable suggestions for the development of online arbitration in China and the revisionof the Arbitration Law.

2 The Theoretical Logic of Transnational Commercial Cyber-Arbitration

The logic of the mechanism of transnational commercial cyber-arbitration must be clarified by returning to an ex?amination of international commercial arbitration itself， which， as a late legal phenomenon， plays a vital role in currentinternational commercial activities and reflects many evolutionary trends.

2.1 Characteristics of Transnational Commercial Arbitration

The core characteristics of transnational commercial arbitration are self-determination and transnationality. Selfdeterminationmeans that the parties to an arbitration often agree to an arbitration clause at the time of the main con?tract. The arbitration clause covers the parties' agreement on the application of the arbitration procedure， excluding thejurisdiction of the courts over the matter in dispute， and the parties' choice of venue and applicable rules， thereby mak?ing the arbitration procedure a matter of self-determination for the parties[1]. For example， Article 16 of the UNCITRALModel Law on International Commercial Arbitration expressly provides that the arbitral tribunal may rule on jurisdic?tional issues only if there is a dispute between the parties as to jurisdiction and that a finding of invalidity of the maincontract itself does not affect the jurisdictional clause. Article 17 of the ICC Rules of Arbitration expressly providesthat the parties are free to agree on the rules of law to be applied by the arbitral tribunal in dealing with the substantiveissues of the case， or in the absence of such agreement， the arbitral tribunal may designate the rules of law to be ap?plied.

Transnationality implies the transnational nature of arbitration institutions， the plurality of arbitration standards，and the convergence of the basis of arbitration rules. First， the globalization of the economy has led to the transnational?ization of commercial activities， and global business means that contracts are signed transnationally and are increasing?ly complex at the jurisdictional level due to the different jurisdictions involved， which often leads to the signing oftransnational agreements under the jurisdiction of a specific international arbitration institution[2]. In this regard， inter?national arbitration institutions such as the International Centre for Settlement of Investment Disputes （ICSID）， theHong Kong International Arbitration Centre （HKIAC）， the World Intellectual Property Organization Arbitration and Me?diation Center （WIPO ADR）， the International Chamber of Commerce Arbitration Court （ICC） and the China Interna?tional Economic and Trade Arbitration Commission （CIETAC） have played an essential role in the process of interna?tional commercial dispute resolution. The significant institutions have gradually formulated arbitration rules， summa?rized arbitration standards， expanded the pool of arbitrators， established arbitration offices， and standardized arbitra?tion procedures supporting current transnational commercial arbitration[3].

Secondly， the transnationalization of commercial activities has led to an increasingly innovative and complex busi?ness model， which has led to an expansion of the scope of admissibility of cases before arbitral tribunals and to moreflexible case admissibility criteria and forms of hearing. While parties' qualifications in traditional arbitration cases areoften examined by territorial principle or Ratione Personae， transnational commercial issues have developed dualisticadmissibility criteria， such as Article 1 of the UNCITRAL Model Law on International Commercial Arbitration， whichexamines both the materiality of the connection， i.e.， the transnationalization of the point of business of the signatoryparties to the agreement， and the transnational nature of the interests， i.e.， the fact that the matter in dispute involvesthe performance of contractual obligations in multiple countries. As long as one of these two criteria is met， the casecan be included in the arbitral tribunal[4]. At the same time， there is a parallel phenomenon of institutional and ad hocarbitration in transnational commercial arbitration， such as international maritime， commodity trade， maritime trans?port， and other areas disputes， where the parties often agree to have an ad hoc arbitration， which is suitable for the cur?rent fast-paced international business activities， helps reduce the cost of arbitration and facilitates the rapid stabiliza?tion of legal relations[5].

Thirdly， the continuous development of international commercial activities and arbitration activities will graduallyform a \"practice-approved\" norm， which is based on and premised on formal national laws， and then continuously en?riched and adjusted according to the needs of the practice， gaining statutory effect through the recognition of commer?cial subjects and the confirmation of arbitration institutions. As Teubner found， model contracts， institutional stan?dards， and commercial customs have become self-empowering merchant law in contemporary society[6]， and the selfempoweringmerchant law， which is based on commercial practice， is increasingly converging with the standardizationof commercial activities. Thus， the normative basis and enforcement support for transnational commercial arbitration isconnected with bilateral judicial assistance treaties， and international arbitration conventions concluded between differ?ent countries providing the normative basis for transnational enforcement of arbitration instruments， while internationalarbitration institutions and international guilds provide the normative basis for the fairness of transnational arbitrationby setting arbitration standards， establishing model contracts and implementing arbitration rules[7].

2.2 Basic Framework of Transnational Commercial Cyber-Arbitration

The current trend of transnational commercial arbitration provides the basis for integrating transnational commer?cial arbitration with Internet technology. The prominence of self-determination and the intensification of transnationali?ty have given international commercial arbitration a higher degree of autonomy. It is supported by the recognition of theinformal legal system and the binding force of the formal legal system[8]. The former provides the necessary space for in?stitutional innovation in transnational commercial arbitration， as the convergence of norms， the homogeneity of institu?tions， and the plurality of cases received enable international commercial arbitration to transform and innovate its ownoperation mechanisms in practice continuously; the latter provides the underlying support for institutional innovation intransnational commercial arbitration， as the recognition by the judicial organs of sovereign states of the instruments ofarbitral institutions of other states within the scope of the agreement enables innovation in transnational commercial ar?bitration and its operational mechanism.

The integration of transnational commercial arbitration with Internet technology is now embodied in transnationalcommercial cyber-arbitration. The concept of Online Alternative Disputes Resolution （OADR） provides the necessarytheoretical premise for cyber arbitration. Suppose OADR means going beyond litigation to seek a quicker and more eco?nomical dispute resolution path. In that case， the introduction of the \"online\" concept on top of this concept is a reshap?ing of the way information is transmitted throughout the dispute resolution process[9]. This means that the constructionof the concept of OADR needs to go through two steps： first， reshaping the source of statutory force. While the tradition?al litigation mechanism receives mandatory statutory support， the ADR mechanism also receives required supportthrough the authorization of the \"recognition rule\" in Hart's sense， and the arbitration mechanism can obtain its statuto?ry source of validity through the basic rule of \"adjudication or arbitration\"[10]. Based on this \"authorization\" behavior，the traditional litigation dispute resolution mechanism and arbitration dispute resolution mechanism are parallel， thusproviding more possibilities for dispute resolution. Second， reshape the way of information transmission. According toLuhmann， expanding social complexity means the proliferation of options， and the legal system's response to complexi?ty is to provide more institutional channels to accommodate the possibilities[11]. If the differentiation between traditionallitigation and arbitration mechanisms provides the first level of accommodation， the differentiation between offline andonline resolution within the arbitration mechanism provides the second level of capacity. With the differentiation of in?formation transmission methods， the arbitration mechanism can respond to different dispute situations more tailoredmanner， thereby simplifying complexity and reducing the cost of operating the system.

Under the above view， transnational commercial cyber-arbitration is a way to respond to the complexity of contem?porary international commercial activities with autonomous innovation. This requirement makes it necessary for trans?national commercial cyber arbitration to be based on two elements： The first is the online platform， which is the core oftransnational commercial cyber-arbitration. The arbitration process of filing， service， cross-examination， trial， and de?fense is completed online， and the transmission of information breaks through time and space， thus achieving the sec?ondary goal of instantaneous， swift， and simple arbitration. Secondly， the legal environment is the guarantee for transna?tional commercial cyber-arbitration. Although the online platform absorbs the complexity of transnational commercialactivities， it also allows the complexity to be reproduced in the conflict between the online platform and the existinglaw. The process of service of documents， submission of evidence， hearings， and enforcement of awards is placed in a\"black box\" information system， which undoubtedly brings new risks to the determination of evidence， data security， tri?al process， and judicial review， and may impact on the established legal system and practice of arbitration[12]. Further，the online platform and legal environment of international commercial cyber arbitration can be divided into two parts.

First， the structural composition of the online platform. An effective transnational commercial cyber-arbitrationplatform must have three parts： information input， interaction， and output. The information input endpoints to the sub?mission entry of disputed facts， legal documents， and evidentiary materials submitted by both parties， which must beboth standardized and secure， providing standardized input instructions for the parties and ensuring that the data sub?mitted by the parties cannot be tampered with， as well as providing the parties with a choice of mediation/trial and ruleapplication. The interactive end of the information refers to the voice interaction， legal interaction， and transcripts ofthe communication and argumentation between the parties in the trial， ensuring that the online communication betweenthe parties and the arbitrator is smooth enough while providing the parties and the arbitrator with legal references fromdifferent countries according to the progressive steps of the trial， as well as being able to recognize the voice of the par?ties to form an adequate transcript. The output end of the information points to the pre-trial service of documents andthe post-trial signing of records， which requires both online service of documents to the parties on a web-based plat?form and a convenient signature mechanism to ensure that the arbitration documents are legally valid.

Second， the elements of the legal environment. The construction of an online platform for transnational commer?cial arbitration requires normative support， which can be briefly divided into several dimensions： first， jurisdictionalsupport， which clarifies the jurisdictional basis of online arbitration; second， service support， which explains the validi?ty and timing of online service; third， evidentiary support， which describes the standards for online submission andcross-examination of evidence; and fourth， enforcement support， which clarifies the legal effect of online arbitrationdocuments.

3 Reflection on Practices of Transnational Commercial Cyber-Arbitration inChina

China's arbitration industry is developing rapidly， becoming the primary choice for commercial disputes. Accord?ing to the data of the CIETAC in 2020， 3615 cases were received by CIETAC， which is an increase of 8.5% year-onyear，and the amount in dispute reached RMB 112.13 billion for the year. Eight hundred sixty-three cases were re?ceived in the first quarter of 2021， an increase of 24% year-on-year. In addition to the rise in the number of cases， thecases themselves also show a series of characteristics such as diversified application of rules， novel types of cases， in?creased difficulty of issues and frequent transnational disputes， among which disputes over betting agreements， equitytransfer disputes and financial services disputes have shown an increase[13]. Transnational commercial arbitration is be?coming an essential category in China's arbitration field and is the focus of further development in China's arbitrationfield.

Given the growing importance of transnational commercial arbitration and the COVID-19 epidemic has blockedthe movement of people and goods since 2020， the use of Internet technology to transform transnational commercial ar?bitration has become inevitable. In recent years， major international arbitration institutions are establishing cyber-arbi?tration services. A number of them， such as the London Court of International Arbitration （LCIA）， the Singapore Inter?national Arbitration Centre （SIAC）， the International Chamber of Commerce Court of Arbitration （ICC）， and the Ameri?can Arbitration Association （AAA）， have explicitly recognized the status of electronic communications and the legitima?cy of the use of technology in the form of various documents allowing the use of electronic means for hearings. Most ofthese institutions use third-party platforms to conduct video court hearings. The AAA， for example， uses the multi-personcloud video conferencing software ZOOM to conduct video court hearings， sending the conference room ID and pass?word to the parties and arbitrators via an email link and proving their identity by showing identification to the cameraor answering questions from the arbitrators about their identity.

At the same time， domestic arbitration institutions have been improving their arbitration methods in line with theChinese context， even as China's attempts at cyber-arbitration have developed more rapidly than internationally. Asmentioned above， CIETAC has established a unique video court platform for identity verification， court hearings， andsignature of transcripts， which ensures the standardization and confidentiality of court hearings; GZAC and Nanjing Ar?bitration Commission launched their cyber-arbitration platforms as early as 2014 and 2018 respectively， which haveyielded promising results in practice. With China's valuable experience in opening cyber-courts earlier， China's cy?ber-arbitration has become more mature in terms of procedures and software， not only developing special video soft?ware for court hearings， avoiding the potential instability and insecurity of using third-party platforms， but also allow?ing online identity verification through the country's mature face recognition technology， guaranteeing the occurrenceof incorrect responses to lawsuits.

However， China's cyber-arbitration is not yet ready for transnational commercial cases. According to the data ofGZAC， the types of cases received by GZAC in 2020 were concentrated in traditional areas such as financial disputes，property sales， online contract disputes， and intellectual property disputes. While some small disputes were referred toonline arbitration， many significant transnational commercial disputes were still referred to offline arbitration[14]. Thissituation shows that transnational commercial activities are currently skeptical of online arbitration and still need to im?prove transnational commercial cyber-arbitration. In this regard， I analyze the current practice and underlying mecha?nism of transnational commercial cyber-arbitration in China to extract the current problems.

3.1 Lack of Supporting Legal System for Transnational Commercial Cyber-Arbitration

Currently， transnational commercial cyber-arbitration in China faces the complex problem of insufficient legal ba?sis in practice. The Arbitration Law of the People's Republic of China （hereinafter referred to as the Arbitration Law1995）， which was enacted in 1995， has a relatively administrative solid overtone and draws heavily on the more strin?gent judicial thinking in its procedural provisions， which is not conducive to the flexibility of arbitration institutions toenhance arbitration with institutional innovation， and also makes it difficult for arbitration institutions to respond to theneeds of transnational commercial activities due to the lack of legal basis[15].

The core of transnational commercial cyber-arbitration lies in reshaping the arbitration process through onlineplatforms， which inevitably imposes new requirements on the established legal environment—first， changes to the oper?ation of arbitration service. Cyber-arbitration makes the arbitration documents need to be delivered and signed usingonline. However， the Arbitration Law 1995 only provides in principle in Article 25 that copy of the arbitration applica?tion， the arbitration rules， the roster of arbitrators， and the statement of defense must be served within a \"prescribed pe?riod\". In practice， it is decided by the arbitration institutions' own rules. For example， Article 48-51 of the ArbitrationRules of GZAC provides for direct service， service by mail， and service by public notice. Article 8 of the ArbitrationRules of CIETAC provides for immediate service， notarial service， service by mail， service by the commission， and ser?vice by the lien， etc.， and specifies that if the address is a last known place and reasonably inquired， after the Arbitra?tion Court sent， the arbitration correspondence shall be deemed to have been adequately served. In practice， cyber-ar?bitrations are often done by e-mail and communication tools. Still， these service methods have not yet been incorporat?ed into the Arbitration Rules of the arbitration committees. They lack legal support， which may affect the judicial en?forcement of the arbitral award if the parties bring arbitration proceedings against the law.

Second， changes in the types of evidence in arbitration. Currently， cross-border commercial cyber-arbitration cov?ers cross-border e-commerce disputes， and cyber-arbitration of cross-border e-commerce disputes necessarily in?volves submitting electronic evidence[16]. Electronic evidence is different from traditional civil evidence because it isgenerated in cyberspace and exists in the form of electronic data. This feature gives electronic evidence the potential tobe a new type of evidence but also faces corresponding controversies and dilemmas in arbitration practice. On the onehand， electronic evidence's authenticity is the dispute's focus in the arbitral tribunal. Both parties often deny the au?thenticity of the other party's electronic evidence and apply for evidence identification to counter the claim， whichmakes it possible to consider setting up an electronic evidence review and certification mechanism to reduce the risk ofusing electronic evidence[17]; on the other hand， the collection of electronic evidence is also a problem in arbitrationpractice. Unlike litigation， it is often difficult for parties to apply for access to evidence from web service providers dur?ing arbitration due to privacy protection issues， which increases the need for the arbitral tribunal to access electronicevidence ex officio. This needs to be clarified by way of amending the Arbitration Law 1995.

Third， the clarity of the recognition and enforcement of arbitral awards. On the one hand， cyber-arbitration， as aproduct of the rapid development in the context of the COVID-19 epidemic， is often difficult for the parties to foreseesuch a situation， and most do not explicitly agree to cyber-arbitration clauses in their contracts. The arbitral tribunal isforced to conduct cyber-arbitration due to COVID-19 and is faced with due process issues. Whether or not the parties'autonomy is violated and whether or not the arbitration procedure is proper are the pain points for recognizing and en?forcing foreign arbitral awards. At the same time， due process is related to the issues mentioned above of service of pro?cess and evidence， which are fundamental to the solution of transnational commercial cyber-arbitration. On the otherhand， determining the place of arbitration is a prerequisite for recognizing foreign arbitral awards under the New YorkConvention on the Recognition and Enforcement of Foreign Arbitral Awards. Some scholars believe that transnationalcyber-arbitration relies on electronic communication in a virtual environment， and there are obstacles in determiningthe place of arbitration. However， cyber-arbitration does not change how the place of arbitration is recognized in tradi?tional arbitration， and the location of the hearing is not equal to the area of arbitration. According to Article 20 of theUNCITRAL Model Law on International Commercial Arbitration， if the parties have yet to agree on the place of arbitra?tion， the arbitral tribunal may determine the location of arbitration in light of the actual circumstances. The arbitral tri?bunal may exercise discretion based on the principle of closest connection， and the non-substantive nature of cyber-ar?bitration only affects the determination of the place of hearing and does not affect the judgment of the arbitral tribunal.Article 27 of the Arbitration Law 2021 （Revised） also clarifies the rule that the place of arbitration shall be the seat ofthe arbitral institution in the absence of agreement， providing a legal basis for the arbitral tribunal to confirm the loca?tion of arbitration.

Fourth， the inclusion of an ad hoc arbitration system. To a certain extent， cyber-arbitration has a natural affinitywith ad hoc arbitration， as the composition of the arbitral tribunal， the selection of arbitration rules， and the choice ofarbitration procedures are all based on the parties' consent. The parties often seek to resolve disputes quickly， whichmakes cyber-arbitration an essential basis for ad hoc arbitration of transnational commercial disputes[18]. However， thecurrent lack of a legal basis has somewhat limited the scope for using online platforms for ad hoc arbitration.

3.2 Inherent Problems of Transnational Commercial Cyber-Arbitration Mechanism Have Not been Solved

The process of transnational commercial cyber-arbitration is conducted on an online platform， from filing toaward. The inherent characteristics of online hearings shape the risks of online arbitration and are not conducive to en?hancing the experience of transnational commercial cyber-arbitration.

The current practice of transnational commercial cyber-arbitration has the following problems： the issue of net?work delay. I have been involved in a commercial cyber-arbitration， and the network delays prevented an efficient ex?change of views between the two parties during the arbitration process. At the same time， the defense often needed tobe repeatedly emphasized to be heard by the other party. Although theoretically， cyber-arbitration can improve the effi?ciency of information transmission across time and space， the existing cyber-arbitration platform needs to be more stan?dardized and specialized to accommodate the uncertainties in practice due to the high degree of uncertainty inherent inonline information transmission. Second is the issue of arbitration guidance. An essential advantage of cyber-arbitra?tion is its simplicity and economy， but a disadvantage is that parties to an arbitration often need more detailed adviceand feedback.[19] The lack of guidance can lead to procedural clarity， the need for timely review of incorrectly filled in?formation， and the international nature of transnational commercial arbitration choosing the language of the online plat?form as a critical factor. The third is the issue of data security. This means that the essential information and evidencesubmitted by the parties is stored in the form of data on the local client or cloud server， which raises the question of da?ta security， and the encryption and anti-tampering of sensitive data is a necessary step to enhance the reliability of cy?ber-arbitration. Fourth is the issue of procedural choice. While it is a typical trend in contemporary arbitration to giveparties full self-determination， the platforming of arbitration means that the arbitration has to be conducted step by stepaccording to pre-defined procedures， which undoubtedly highlights the contradiction and paradox between platformingand self-determination and requires further improvement and optimization of the platform itself to reduce this contra?diction.

3.3 Insufficient Interface between Cross-Border Commercial Cyber-Arbitration and Other Legal Services

Transnational commercial cyber-arbitration is not an isolated legal service; the optimization of its service effect al?so depends on the synergy with other legal services. The Opinions on Improving the Arbitration System and Enhancingthe Credibility of Arbitration， issued by the General Office of the CPC Central Committee and the General Office of theState Council， clearly state： \"Accelerate the reform and innovation of the arbitration system， support the integration ofarbitration into grassroots social governance， actively develop Internet arbitration， and promote industry collaborationand the regionalization of arbitration\". According to the spirit of the document， the development of China's current arbi?tration system needs to be oriented towards both internationalization， with institutional innovation to improve interna?tional competitiveness and respond to more international commercial disputes， thus improving the international compet?itiveness of China's arbitration institutions， and systematization， with the Internet as a carrier to reshape the arbitrationprocess and integrate legal services as the medium of the Internet， thus improving the overall quality of China's arbitra?tion services.

In light of the above policy direction， transnational commercial cyber-arbitration in China is still in the \"reshap?ing phase\" and has not yet entered the \"integrating phase\". The essence of the Internet is a change in how informationis transmitted. This reshaping of the arbitration process is only a change in how information is shared in the context ofthe \"arbitration system\". Still， without the synergistic integration of the arbitration system with other legal service sys?tems in the \"legal system\"， the quality of services provided by cross-border commercial cyber-arbitration cannot beachieved as a whole. The current cyber-arbitration practices in China do not consider integrating other legal services，nor do they promote the connection of arbitration data with judicial and administrative organs， leaving much room forimprovement.

4 The Optimization of China's Transnational Commercial Cyber-Arbitration

There are certain areas for improvement in the established practice of transnational commercial cyber-arbitrationin China. These conditions make it necessary to consider the way forward for its improvement. The improvement andoptimization of transnational commercial cyber-arbitration need to be based on both the progress of the online platformand the improvement of the legal environment， with the progress of the online platform providing the substantive vehi?cle for practice optimization and the improvement of the legal climate providing the core support for practice optimiza?tion.

4.1 Promoting the Revision of the Arbitration Law and Responding to Controversial Legal Issues in Prac?tice

The conservative and outdated nature of the Arbitration Law 1995 in practice limits the further development of thearbitration industry in China. As a whole， the provisions of the Arbitration Law 1995 are superficial and fail to effective?ly connect and incorporate foreign arbitration rules， thus making the arbitration law system appear as two sets of rulesat home and abroad; at the same time， it also fails to effectively connect to the Civil Procedure Law and the Civil Code，making the rules of service of arbitration， rules of evidence， and post-execution remedies lacking legal provisions，which is not conducive to the compelling connection between arbitration and justice[20]. In response， the Ministry of Jus?tice issued the Arbitration Law 2021 （Revised） in 2021， which essentially incorporates the current international arbitra?tion rules， judicial interpretations of arbitration， and the latest achievements in civil litigation. For example， it expandsthe temporary preservation measures for arbitration， allows the development of cyber-arbitration， emphasizes the inter?face between out-of-court mediation and arbitration proceedings， builds a mechanism for challenging the enforcementof arbitration by an outsider， incorporates an ad hoc arbitration mechanism， and clarifies the confirmation of the placeof arbitration. These new provisions are a concrete manifestation of the Arbitration Law's responsiveness to the develop?ment of the time and effectively expand the flexibility and innovation of China's arbitration system.

However， there are still some provisions in the Arbitration Law 2021（Revised） that need to be further dis?cussed and amended to accommodate the trend of cyber-arbitration better， optimize the legal compliance of arbitrationprocedures， respect the principle of party autonomy， and reduce the risk of non-recognition and non-enforcementof transnational cyber-arbitration awards. First， the reflection and amendment of the service clause. Article 34 para?graph 1 of the Arbitration Law 2021（Revised） provides in principle that the service of arbitration must be \"reasonableand bona fide\"， and then paragraph 3 provides for specific modes of service such as \"personal delivery， registered mail，courier， fax， e-mail， instant messenger\". In addition， paragraphs 4 and 5 provide for \"deemed to be served\" of arbitra?tion. However， the biggest problem faced by Article 34 is its \"deemed service\" clause. In cyber-arbitration， arbitral tri?bunals often notify and serve arbitration documents to the parties using communication tools or e-mails. Still， in prac?tice， the arbitral tribunal's delivery of documents to the corresponding e-mail address does not necessarily constituteservice. For example， if the email address entered by B at the time of the dispute between A and B is the email addressof his company employee， or if B has not entered his email address and A checks public information and finds B's ex?pired email address， in these two cases， although A serves the documents to his email address， B is not informed of thecorresponding situation and faces the risk of violating the statutory procedures; for example， if the arbitral tribunalsends the documents to B and the email system intercepts them as spam， this may also constitute ineffective service，and the arbitral tribunal may not be able to serve the documents. For example， suppose the arbitral tribunal sends docu?ments to B， and the mailbox system intercepts them as spam. In that case， it may also constitute a risk of violating thestatutory procedure by not effectively serving. A better solution to this problem is to place the burden of proof of servicein the case of disputed service on the person served in Article 34 and to add \"accuracy\" to the principle provision inArticle 34（1） to limit the occurrence of improper service with the principle provision of \"reasonable， bona fide and ac?curacy\" to limit the occurrence of improper service.

The reflection and amendment of the evidence clause. Articles 61 and 63 of the Arbitration Law （Revised） 2 givethe power to the arbitral tribunal to call evidence ex officio with the color of flexible proof and cross-examination in thearbitration process， which essentially adapts to the current development of cyber-arbitration. However， the ArbitrationLaw （Revised） still needs to clarify the evidentiary features of arbitration. Although both the Arbitration Law and theCivil Procedure Law are laws， the Arbitration Law， as a particular procedural rule， should clarify the rules of evidencein arbitration by the principle that special law prevails over general law. According to the current practice of arbitra?tion， many expressions of intent in commercial activities do not have a strict form of evidence. Still， such evidence canbe corroborated according to commercial practice; a paragraph can be added to Article 61 of the Arbitration Law 2021（Revised） to provide for the authenticity， relevance， and limited legality of arbitration evidence. Compared with the evi?dence provisions of the Civil Procedure Law， the Arbitration Law should relax the legality requirements while affirmingauthenticity and relevance and recognize specific evidence that is not in complete legal form but can be corroboratedby commercial practice， which will facilitate the adoption of evidence by arbitral tribunals in a more flexible manner inthe context of separate jurisdictions for transnational commercial activities， thus contributing to the development oftransnational commercial cyber-arbitration. In the context of different jurisdictions for transnational commercial activi?ties， such a provision would facilitate the admission of evidence by arbitral tribunals in a more flexible manner， thuscontributing to the development of transnational commercial cyber-arbitration.

4.2 Build Cloud Computing Cyber-Arbitration Platform and Promote the Intelligence of the NetworkPlatform

The amendment of the Arbitration Law 1995 provides the necessary legal environment for the development oftransnational commercial cyber-arbitration， on top of which the cyber-arbitration platform itself has to be further opti?mized， thereby improving the quality of service and efficiency of arbitration. First， the construction of a cloud comput?ing cyber-arbitration platform is the foundation. Cloud computing means that the interaction， storage， and analysis ofdata are located in the cloud， and the cloud server provides services to decentralized customers， which not only reducesthe learning and maintenance costs of the software for customers but also facilitates the integration and analysis of databy the cloud platform to improve its services[21]. The cloud computing of cyber-arbitration means that arbitration institu?tions must establish a standardized and universal arbitration platform and allocate a certain amount of cloud computingspace to the proposed arbitration parties to store relevant materials. Then the parties' arbitration activities are done onthecloudcomputingarbitrationplatform，andtheparties'audio，video，andevidentiarymaterialsareallstoredinthe cloudfor reference. The cloud computing platform reduces the efficiency of arbitration due to differences in the parties'equipment environment and facilitates the submission and storage of relevant information.

Second， detailed improvements to the cyber-arbitration platform are central. The development of China'scyber-arbitration platform is still in the process of exploration， and there are still many possible directions to be ex?plored. In the case of cross-border commercial arbitration， the cyber-arbitration platform needs to be improved in fourways： first， by giving the parties the right to choose the procedure on the platform. Transnational commercial disputesare not always decided by arbitration， and often parties resort to arbitration to gain time to negotiate and achieve a moreeconomical resolution of their disputes[22]. This situation makes it necessary for cyber-arbitration platforms to provideparties with procedural options in the filing process， such as an \"assisted negotiation option\" or an \"arbitration media?tion option.\" If the parties choose this option， the platform may set up automated negotiation aids with a multilingual in?terface that displays the laws and regulations involved in the dispute， as well as similar cases to provide a reference forthe parties to negotiate; the parties can assign an arbitrator to participate in the mediation， who can mediate with theparties online， and if the negotiation or mediation fails， the process will move to arbitration， providing the parties withan award[23]. Second， it is necessary to pay attention to the confidentiality of the platform data. Transnational commer?cial disputes often involve submitting evidence involving certain commercial secrets and electronic proof that is easilytampered with. This makes it possible for the platform to set up a \"prior automatic verification\" option to identify tam?per-proof evidence submitted by the parties. Only those that pass the identification can be forwarded to the system. Atthe same time， confidential evidence can be handed over to third-party professional institutions for identification andstorage with the parties' consent. Third， a feedback mechanism should be set up， i.e.， for each step of the arbitrationprocess， the platform should clearly indicate the status of the process and automatically notify the parties by email，phone， SMS， etc.， according to the contact information provided by the parties， to avoid procedural irregularities causedby the lack of timely notification， and also significantly reduce the unnecessary burden of the secretary of arbitration[24].Fourth， it is essential to focus on the rigid constraints of the platform， while also leaving room for the parties to choosetheir agreement. Since online platforms are often formatted and standardized for various steps and processes， thus donot fit the current \"autonomous\" orientation of arbitration practice. The parties can be given the space to choose byagreement in the filing process and the arbitration steps.

Third， there is a trend toward the development of intelligent cyber-arbitration platforms. In the foreseeable future，there will be bulk disputes in cross-border commercial cyber-arbitration， with consumer disputes being the most typi?cal example. In this case， the online arbitration platform can set up a simple and complex triage mechanism so that cas?es with clear facts and simple application of law can be triaged in advance. The intelligent arbitration mechanism canprovide an initial award on such issues， which can then be reviewed by the arbitrators， thus achieving a batch solutionfor simple cases. For complex cases， the arbitration platform integrates laws and regulations， commercial customs， andjudicial precedents from different countries to provide a reference for arbitrators' awards[25]. At the same time， the arbi?tration platform can also provide the necessary AI support to arbitrators by converting documentary evidence， forensicopinions， electronic data， and other evidence types into a standardized reference for decisions using AI scanning.

4.3 Promoting the Synergy with Legal Service and Constructing the Large Pattern of Socialization of Ar?bitration

According to Luhmann， the legal system in modern society has a multi-layered pattern， with judicial activitiesrepresented by court proceedings， quasi-judicial activities described by arbitration practice， and activities of a judicialnature represented by the defense， mediation， notarization， and accreditation， which together build the operating mech?anism of the legal system[26].

The necessary support from the judiciary is the basis for transnational commercial cyber-arbitration. In respect ofthe enforcement of arbitral awards， the Arbitration Law 2021 （Revised） is consistent with the Arbitration Law 1995 inthat the conditions for enforcement are stipulated in Chapter 6， which specifies that the enforcement of arbitral resultsrequires confirmation and enforcement review by the court and if no party has filed a request for setting aside the arbi?tral award. No party or outsider has filed an objection to the enforcement. Because the arbitration awards shall be finaland binding， the judiciary plays a vital role as the only remedy for the parties. However， it is more difficult for an execu?tor to apply to the court for non-enforcement or annulment of an arbitral award. If the case is contrary to the public in?terest or there are severe errors in the arbitration process， the court may support the request for non-enforcement orannulment. For example， in the case of non-enforcement of an arbitration award between a company in Shandong andMr. Xu heard by the Rizhao Intermediate Court in Shandong， the court held that because finance is a licensed industryand is not allowed to operate without a license， the company could not provide its relevant qualification documents andcould not prove the legality of its loan business. It charged high-interest rates in disguise in its loan business， which se?riously disturbed the financial order. The court finally ruled not to enforce the arbitration award in question. Undersuch circumstances， the exemplary operation of transnational commercial cyber-arbitration requires the support of ju?dicial organs and the cooperation of legal service institutions to improve service quality and reduce operating costs.

In the current context of transnational commercial cyber-arbitration， arbitration institutions can further connecttheir online platforms with the databases of court enforcement divisions so that they can promptly transfer the basis andevidentiary materials of the awards to the enforcement divisions upon the parties' applications， thereby speeding up theenforcement of the prizes. At the same time， the online platform of arbitration institutions can also set up a relief channelafter the award is made; for example， if the parties request to revoke the arbitration award or object to enforcement， theycan submit materials through the relief channel of the platform. The platform will then transfer the application for with?drawing or objecting to the case and the case materials to the competent court， thus reducing the legal cost for the parties.

The synergy between arbitration institutions and other legal service providers is the key to developing transnation?al commercial cyber-arbitration. The properties of the Internet itself provide the premise for breaking down the barri?ers between different legal service providers and increasing the degree of sharing of legal services and legal data. Inthis context， Chinese arbitration institutions should deepen their cooperation with legal service providers such as foren?sic institutions， notaries， and law firms by holding regular meetings to discuss legal issues related to arbitration in trans?national commercial activities and gradually realizing the docking of service excuses. For example， if a party chooses tonegotiate or mediate after filing an arbitration， the arbitration authority can send its lawyer to participate in the negotia?tion process[27]; if a party submits digital evidence that requires authentication or notarization， the arbitration authoritycan send its notary or appraisal agency to authenticate or notarize it. On this basis， it is possible to explore further theintegration of transnational commercial cyber-arbitration into the public legal service platform under the unified man?agement of local judicial and administrative departments to achieve the integration of various legal services.

5 Conclusion

As the Arbitration Law is being revised， it is imperative to look at the future of the arbitration industry in China.Arbitration is an essential solution to current international commercial disputes， and the construction of a better arbitra?tion framework will play a critical role in improving the business environment in China. Despite the current enthusiasmand hope for cyber-arbitration， there are undoubtedly many legal and practical obstacles to its advancement and devel?opment. The transplantation of cyber-arbitration into the field of transnational commercial arbitration will place evengreater demands on cyber-arbitration， not only in terms of improving cyber-arbitration itself but also in terms of form?ing an integrated structure with other legal services to respond to the current needs of transnational commercial arbitra?tion from a holistic legal service perspective.

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