Is private international law tech-proof? Conflict of laws and FinTech: selected issues

Abstract

The advances in technology over the past few years have deeply impacted the financial sector. While legal systems are still accommodating FinTech at the substantive-law level, the same task at the level of private international law proves to be even more challenging. The authors note that traditional private international law methodology is based on connecting factors which seek to anchor legal relationships to a particular State. FinTech, on the other hand, is essentially decentralized and delocalized; traditional connecting may thus not work. While the HCCH has already dealt with the first wave of technological challenges in the 2006 Securities Convention, especially distributed ledger technology (DLT) defies traditional approaches given its global reach, the lack of intermediation and the absence of central authorities. After a brief introduction to DLT, the authors consider selected issues concerning DLT in the financial sector from a private international law perspective, testing traditional Savigny’an approaches and arguing that a number of issues could benefit from uniform regulation. They focus on the law applicable to proprietary aspects of securities registered in blockchains and present the different connecting factors that may be considered for a choice of law rule. The Chapter then discusses token sales and the law applicable to smart contracts deployed in such sales. The authors contend that ultimately, any solution which is intended to be effective must be adopted at an international level, hence being highly relevant for the future work of the HCCH.