In Osbourne v Persons Unknown & Anor [2022] EWHC 1021 (Comm) (10 March 2022) Judge Pelling KC stated:

‘There is clearly going to be an issue at some stage as to whether non-fungible tokens constitute property for the purposes of the law of England and Wales, but I am satisfied on the basis of the submissions made on behalf of the claimant that there is at least a realistically arguable case that such tokens are to be treated as property as a matter of English law. [13] The other factor which is material to this claim is where such tokens are to be treated as being located as at the time when they were lost. … [N]on-fungible tokens are in effect a stream of electrons resulting in a credit item to a crypto account. As such, insofar as they have a physical manifestation at all, that is likely to be where the servers relevant to the account are maintained. However, attempting to litigate issues such as this by reference to a concept as ethereal as that would be difficult or impossible. [14] Unsurprisingly, therefore, in a series of cases relating to crypto currency fraud, it has been consistently held that crypto assets, are to be treated as located at the place where the owner of them is domiciled. There is no reason at any rate at this stage to treat non fungible tokens in any other way, assuming for present purposes as I do that they are to be treated as property as a matter of English law. [15].’

General principles of mediating commercial disputes apply to NFT disputes involving art, e.g:

• What is at stake?

• What is the value of what is at stake?

• What are the litigation & potential costs risks? – including jurisdiction.

• What are the benefits of litigation & trial?

• What is the ‘chance of winning’ multiplied by the ‘net financial gain’ versus the ‘chance of losing’ multiplied by the ‘net financial loss’?

• What are the benefits of doing a deal?– e.g., privacy & confidentiality.

• What is the ‘price of doing a deal’?

• What is the ‘commercial gap’?

• What ‘legal & commercial incentive/leverage’ is there to narrow & close the gap? – e.g., elimination of litigation risk & the time value of money.

A ‘Black Swan’ is the scope for lawful accounting & tax-efficient settlement to accommodate/cushion/mitigate the cost for each side of doing a deal that is ‘enough’. In my article – ‘Back to the future’ – Part 1 – Mediation and the tax-efficient settlement of probate disputes’, Taxation (Tolley) 01.03.2022 , I explain ‘Since this involves a technical analysis that requires the application of specialist knowledge about [each applicable tax regime & of complex/multi-jurisdictional accounting] principles, participants … prior to the mediation day [may separately appoint or] … agree to the joint-appointment of a single qualified [CTA], to provide a [Report] to … scope and explain the potential to expand the [commercial pie] through innovative … tax planning.’