Dispute Resolution

The virtual worlds of the metaverse are no more immune to disputes than the real world. Trading in digital real estate, non-fungible tokens (NFTs) and cryptoassets, or providing or using online services can trigger conflicts between users and metaverse platform operators or between the users themselves. All this requires a new approach to fundamental procedural issues.

There is plenty of potential for disputes to arise: A platform operator might double the number of available properties, halving the value of each. A user might fail to transfer an NFT artwork. Or a platform operator might cancel a metaverse store owner’s account, leaving them to face a substantial loss of profits. These few examples show that the metaverse – like the real world – will be no stranger to conflict.

Many of the procedural issues this raises are entirely new. Which court has jurisdiction – and which law applies – if the platform operator is organised decentrally, the property in dispute is in the metaverse and the contracts say nothing about jurisdiction or applicable law? Who does an injured party sue if the identity of platform operators or metaverse users is not publicly known? Are the available statutory enforcement instruments sufficient, or are new metaverse-specific mechanisms needed – for example, for transferring cryptoassets? Will entirely new automated dispute resolution mechanisms emerge? And what role will (online) arbitration play?

Gleiss Lutz has long been a market leader in dispute resolution in Germany. Our wealth of experience and cross-practice expertise in all aspects of the metaverse enable us to provide our clients with top-level advice and representation in metaverse disputes – whether before ordinary courts, arbitral tribunals or under new automated dispute resolution mechanisms.