The Integration of AI in International Arbitration: Streamlining Efficiency or Introducing New Complexities?

Introduction

Artificial intelligence is the ability of machines to carry out tasks like intelligent individuals. Arbitration, like many fields of work, has been influenced by artificial intelligence. Invented by John McCarthy in 1955, AI is now being applied to enhance the efficiency and effectiveness of arbitration processes. Coupled with machine learning, natural language processing, and speech recognition, this technology glibly reshapes the legal landscape. It presents unparalleled opportunities, while introducing striking challenges. While technology can enhance and support international arbitration in myriad ways, artificial intelligence obviously remains a long way from completely replacing human arbitrators. This is fortunately because it would seem the essentially human element in the resolution of conflicts still prevails.

The Role of AI in Legal Research and Document Review

The biggest game changer that AI brings to the field of international arbitration is efficiency in legal research and document review. In the past, this process was very laborious with human arbitrators or lawyers manually reading many of these documents and conducting research. But this process is revolutionized form AI. By using machine learning and natural language processing, tools such as IBM's Watson are able to unearth a trove of data that allows lawyers instantly identify relevant information and analyze the other parties' submission. This should increase speed, lower costs and ultimately make arbitration more practically available.

In addition, AI can review documents as they are being developed in a case (contracts, emails and other records) to strengthen the arguments you put forward. However, with the support of stronger arguments and defenses by finding supporting evidence for these claims early on through AI, attorneys would also be able to make arbitration more robust. Nevertheless, ethical and procedural concerns are raised by the use of AI-for example, deep fakes in audio, video, and picture files. In an endeavor to bridge this lacuna, on 31 August 2023, the Silicon Valley Arbitration and Mediation Centre released draft Guidelines on Artificial Intelligence in Arbitration (SVAMC AI Guidelines). The Guidelines propose that standards be set by which to manage the use of AI. 

Lastly, Microsoft revealed "Copilot," which embeds GPT-4-based AI across the full suite of applications in Microsoft 365. This technology also has the potential to help attorneys analyze the submissions and summarize material, showing relevant patterns or trends from recent case decisions or tribunal rulings. AI can transform the disclosure process since, instead of the search terms, the search phrases are run in its ability to find responsive documents while reducing false positives. Apart from the preparation of preliminary statements and interviewing fact witnesses, voice recognition AI may also serve to stop distortion of the memory of witnesses. Perhaps the most interesting use of AI in court would be the potential ability of searching not only for evidence but also for counter-arguments - and it can do this while listening to the hearing and looking at the transcript developing in real-time. The guidelines on AI from the SVAMC allow AI to be used in investigation.

AI and Speech Recognition in Arbitration

Other AI-driven innovation that has found its niche in international arbitration includes speech recognition technology. SP technology is able to accurately transcribe spoken words, identify individual voices, and even translate languages. This capability turns out to be particularly useful in arbitration, where real-time transcription and translation are often required. In this respect, AI reduces costs and enhances the efficiency of hearings by lessening human interpreters and hastening the transcription process.

Also, the speech recognition facility of AI can enable the drafting of arbitration awards by automating routine sections and hence enables the arbitrators to pay more attention to complex areas of the case. This does not only save time but ensures greater consistency and accuracy in the preparation of the draft. 

AI in the Appointment of Arbitrators

Selection of arbitrators is a very crucial part of international arbitration, and AI can bring revolutionary changes in this area also. AI will support the parties in appointing the arbitrators by analyzing factors such as language proficiency, expertise in specific legal areas, and past arbitration performance. The data-driven approach can hence make better decisions and ensure that the chosen arbitrator is well-suited for the case at hand.

It is, however, important to note that there are some challenges in applying AI to the selection of arbitrators. AI models may retain biases and stereotypes through the data that train their algorithms. Guideline practices, such as the Silicon Valley Arbitration and Mediation Centre's AI Guidelines, for example, specify that "AI is not the sole driver of decisions relating to the constitution of the arbitration panel." There must always be intervention of human judgment on recommendations provided through AI.

Ethical and Procedural Challenges of AI in Arbitration

While AI presents several advantages in arbitration, it also has a number of important ethical and procedural issues. One of the significant problems is that AI may yield biased results, or even false ones. The algorithms within AI are rather sensitive to what they train on, meaning that they may easily mimic biases occurring in the data they are fed and thus make wrong judgments on cases. Also, AI will lack transparency in decision-making processes that can make it difficult for parties to understand and challenge its conclusions.

To help rein in these issues, some courts have developed practice notes designed to guarantee that the use of AI will at least be disclosed in arbitration proceedings. In addition, a fast-evolving view that such AI tools must be audited regularly for bias and inaccuracy may ensure high ethical standards in respects expected in legal areas.

A further procedural issue comes from the integration of AI with prevalent legal frameworks. Most national arbitration laws have not taken an express stance on this issue. Therefore, legal inconsistencies may well arise. Whereas, for example, some jurisdictions permit the use of non-human arbitrators, others do explicitly provide that an arbitrator shall be human. It is this legal uncertainty that may be reflected in disputes about the validity of AI-assisted arbitration awards, especially in cross-border cases under a number of different systems.

The Future of AI in Arbitration

Nevertheless, the future of AI in international arbitration is very promising. With more growth in development into AI technologies, it is expected that AI in the future will play an even greater role in enhancing the efficiency of arbitration, reducing cost, and improving the quality of the award. However, for AI to be effectively integrated within the ambit of international arbitration, the ethical implications that it will usher in have to be taken into consideration along with developing a strong legal infrastructure to regulate its use.

One of the areas where AI will have great impact is in case prediction and assessment. Some AI tools, including Solomonic and LexMachina, already help attorneys understand large data sets of judgments in evaluating case strengths and weaknesses; they can afford lawyers with better judgment prediction in cases with greater sophistication. For example, Expert Manager Dispute Resolution (DRExM) has lately been used in Egypt to resolve construction disputes, because it has the ability to recommend the most apt dispute resolution technique, depending on the nature of the dispute and the evidence, not to mention its relation between the parties. At the outset it should be noted that most of the national laws do not expressly prohibit neither do they expressly provide for machine arbitrators. Arbitration Acts of Brazil, Ecuador, Peru, and Colombia address the arbitrators explicitly as 'humans' or demand acting on their own. For example, the Peruvian Arbitration Act provides that "any person with full capacity to exercise his civil rights may be an arbitrator" By contrast, the laws of Chile, Colombia, Mexico and the Model Law do not have a provision requiring that arbitrators be 'human' nor that they are in the position of having their civil rights exercised. This would, disputably, be the legal lacuna to permit users in these countries to appoint a computer as an arbitrator. AI tools currently in use in German courts, established to support mass processes concerning air passenger rights claims and diesel emissions scandals, respectively, are FraUKe and OLGA.

Conclusion

In this regard, AI's entry into the field of international commercial arbitration cuts both ways: enormous opportunities, yet enormous challenges. While AI has the potential to enhance efficiency, cost-effectiveness, and access to arbitration, it also raises critical ethical and procedural questions that have to be dealt with carefully to safeguard the integrity of the arbitral process.

The arbitration community will need to define certain guidelines and best practices as AI continues to evolve in ways that maximize benefits of AI while limiting its risks. In this way, the legal profession can ensure that AI serves as a tool to enhance-not detract from-the fairness and efficiency of international arbitration.