A guide to Non-Fungible Tokens (NFTs), 2023 - Flipbook - Page 37
Additional practicalities
A key factor in dealing with enforcement of disputes will be the
applicable law and jurisdiction.
This is often not a simple task to determine, especially where any smart or
written contract is silent on this point. As discussed above at What are NFTs?,
due to the distributed ledger technology of NFTs, the precise location of the
NFT as an asset, and even the acts of the parties involved in any dispute, can be
difficult to pinpoint as the code may be stored on multiple servers in a variety of
jurisdictions. Secondary to this, once any judgement or order has been secured,
enforcing this may also prove problematic, as explored further below.
Jurisdiction
When deciding whether the English courts have a jurisdictional basis
for any NFT dispute, the courts are likely to apply the common law
rules on jurisdiction, except where the European regime (including
the Recast Brussels Regulation) or the Hague Convention on Choice
of Court Agreements applies.
Under the common law rules, the English court is likely to have jurisdiction if
the defendant has been served with the proceedings (either within or outside
the jurisdiction; note that if serving outside the jurisdiction it may be necessary
to obtain the court’s permission) or otherwise submits to the jurisdiction of the
English courts.
However, due to the cross-border nature of NFTs, complex questions are likely
to arise. Where the defendant disputes the jurisdiction of the English courts to
hear the claim, or contends that the English court should decline to exercise its
jurisdiction, the court will usually consider whether England and Wales is the
most appropriate forum, or the proper place to bring the claim.
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