The Ethereum platform provides for a “smart contract”. Smart Contracts are computer script, coded contracts, residing on the blockchain, that are fully executable without human intervention. Since they execute and do precisely what they were coded to do, there should be little room for misunderstanding, obfuscation or misdirection. However, what is there is a dispute between parties, and a need for resolution?
Like any contract there should also be a provision for this in a smart contract. This may lead to resolution through a court of law or an arbitrator. For this to be enforceable by governments there simply has to be an arbitration clause inserted in the smart contract. If it is a commercial contract there just needs to be provision, according to the New York Convention (the Convention on the Recognition of Foreign Arbitral Awards signed by 150 nations), which requires governments to recognize and enforce most foreign arbitration awards.
Such a clause must include a choice of jurisdiction, laws and processes. The scope of possible disputes and provisions must be stated.
If done correctly such an arbitration clause will make the awards from a properly constituted and executed arbitration process fully enforceable, off the blockchain, in the real world. A local court must uphold and enforce such an award without the lengthy processes and costs associated with legal proceedings. The details of the arbitration process can be tailored to the situation – language, duration, location, medium (in person or via video call), arbitrators, etc.