Joi Ito's conversation with the living web.
An article I prepared for the Inter-Pacific Bar Association about Cyber Abitration.

For the Inter-Pacific Bar Association Newsletter

February 4, 1999

by Joichi Ito

Technology, Security and Cyber Arbitration

As the technical advisor for the Cyber Arbitration program held at the IPBA annual conference in Auckland last year and for the Cyber Arbitration program to be held at the IPBA annual conference in Bangkok this year, I am responsible for providing assistance and advice regarding the technical requirements of the Cyber Arbitration programs and providing guidance as to what the future will hold for Cyber Arbitration. In this article, I would like to discuss the technology used at the Auckland program, future technical possibilities, and various security concerns related to Cyber Arbitration.

Auckland Cyber Arbitration Demonstration

At the IPBA annual conference in New Zealand, we conducted the Cyber Arbitration demonstration using PictureTel video conferencing technology, which is widely used internationally. PictureTel has many configurations with various quality levels. We chose to use the 128K system, which is equivalent to two ISDN channels, because ISDN is either deployed or is being deployed in most countries and is the most common transmission speed used for video conferencing today. The purpose of using such technology was to give a true-to-life example of what a Cyber Arbitration might look like using widely available technology. Because a videoconferencing bridge was used to allow split screen multi-point video conferencing this also caused an inevitable delay in sound and picture transmission since the bridge has to decode everyone's video signals and create a multi-screen signal to send to each participant.

Cyber Arbitration and the Internet

Although the Auckland Cyber Arbitration demonstration showed that an arbitration using multipoint videoconferencing technology was feasible even given the low-level of current widely available technology (and, per force, will be much more feasible with the rapid advance of the general level of technology), one of the critical issues highlighted by the demonstration was cost. ISDN, telephone and leased lines offer dedicated circuits which allow high quality communications, but the cost of creating a network of high speed ISDN connection worldwide for several hours can become prohibitive.

This is where the Internet comes in. The Internet promises to lower the cost of communications by allowing multiple users to share circuits, making communications much more efficient, thus lowering the cost. Nevertheless, at present, one of the primary problems with trying to conduct video conferencing over the Internet is that the Internet is what is called "best effort" connectivity. On the Internet, one traditionally does not have a dedicated circuit, but instead, shares the circuit with everyone else who happens to have their routes going over the same lines. When any segment of the chain of routers, leased lines or servers that one would go through to reach each other gets crowded, the connectivity slows down and video frames freeze up and audio starts to cut out. This sort of "lossy" video is now quite common on the Internet, but is used primarily for non-critical or entertainment applications. It is absolutely inadequate for the requirements of a real Cyber Arbitration, and is why we were unable to demonstrate a Cyber Arbitration using the internet in Auckland.

Nevertheless, high quality video transmission and video conferencing is currently being tested around the world. Using high speed lines with special routing technology, Internet service providers will be able to guarantee bandwidth to users requiring high quality and high speed lines. Applications are being developed to allow personal computers and hardware from many vendors to communicate using open standards, thus lowering the price of video conferencing equipment. It is likely that, over the next several years, it will be quite common to find video conferences being conducted over the Internet at quality levels equivalent to, if not superior to the quality currently being achieved using 128K ISDN and PictureTel. Until such time, however, it will still be of benefit to use the infrastructure and technology available to us today to work out many of the legal and procedural issues that we can identify only through actually conducting Cyber Arbitrations.

The Internet and Security

One of the primary concerns in the age of open networks is security. E-mail and other internet communications (such as the types that would be necessary to conduct Cyber Arbitrations) are typically transferred through several servers and travel over open networks. It is a trivial matter for even a minimally computer-literate individual to, for example, intercept and even replace e-mail while it is traveling between a lawyer and his client. In the age of advanced digital technology, wiretaps are not conducted by people "listening" to phone calls, they are conducted by voice recognition software which can scan thousands of connections or scan stored conversations in databases. E-mail is searched by keyword or intelligent pattern matching software that can search through and organize billions of pages easily. Not surprisingly, therefore, thousands of computers which serve mail are penetrated each year and corporate espionage on computer networks has become a growing concern and a real threat.

This is why cryptography and digital signatures are essential to ensure the integrity of a Cyber Arbitration system. Digital signatures using public key cryptography are becoming more and more widely used. Digital signatures allow e-mail or any other form of electronic message to be digitally signed by the sender and for that signature to be verified by the recipient. Digital signatures are typically authenticated by a certification authority ("CA"). The CA uses some method of identification verification and then certifies the key which is used to sign documents.

Using public key cryptography, documents can also be encoded in a way that allows only the holder of a particular key to decode and view the document. Public key cryptography is unique in comparison to other forms of cryptography in that the key used to encode (encrypt) the document is different from the key used to decode (decrypt) the document. The key used to encrypt the document is referred to as the public key and the key used to decode the document is referred to as the secret key. By distributing one’s public key widely, anyone who receives the public key can then send confidential encrypted documents to the holder of the secret key without fear of the un-encrypted (plaintext) data falling into the hands of unauthorized viewers.

In combination with digital signatures which use the same public and secret keys as public key encryption technology, public key technology allows people to conduct private and authenticated communications over the internet. It also allows the creation of tamperproof documents and allows electronic documents to be presented "in writing" which can not be modified without breaking the digital signature associated with the document.

The risk that a public key that you believe belongs to a trusted colleague is not actually the correct key is supposed to be managed by the CA. The problem with the CA is whether one can trust the CA. Companies running CA's are not infallible and possibly more importantly, they are overseen by government agencies which may be incentivized to allow forgeries or deception to occur in order to collect information about unfriendly governments, organizations or individuals.

A CA managed by the IPBA with an identification verification procedure which is open, capable of being audited, and conducted face to face at the IPBA’s annual meetings could easily become one of the few trusted forms for authentication of keys. Such an authentication mechanism could be used not only to ensure the integrity and confidentiality of Cyber Arbitrations, but also could be used to manage membership, standardize document execution, store and date evidence, conduct encrypted telephone and video conferencing, and a myriad of other applications.


New technology will allow international arbitration and negotiation to become faster, more efficient and less expensive. Although procedures and law will have to be developed and modified as technology develops, many of the issues (including security issues) will only become apparent as these new technologies are deployed and tested by real lawyers and arbitrators. This is why continued research and development of a Cyber Arbitration system by the IPBA is so important to ensuring a bright and new technological future for international arbitrations. The IPBA is in a unique position to create a testbed for developing a workable Cyber Arbitration system and should not let this opportunity slip from its grasp.

By Joichi Ito


  1. Nobuo Miyake, Esq., The Future is Now: The IPBA and Cyber Arbitration, IPBA Journal, September 1998, pp. 16-18
  2. David F. Day, Esq, Conducting the Electronic Arbitration, IPBA Journal, September 1998, pp. 19-20
  3. Jasna Arsic, International Commercial Arbitration on the Internet, Journal of International Arbitration, pp. 209-231

Release Notes

  1. Draft Version 1by Joichi Ito February 3, 1999
  2. Edited by Joseph Gourneau February 4, 1999 for submission to IPBA
  3. Edited by Joichi Ito February 16, 1999 for web publication (In particular, modified the 128K = ISDN edit by jg and re-included the bibliography)


Copyright 1999, Joichi Ito

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