AI in International Arbitration: Reforming Justice

AI in International Arbitration
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The integration of artificial intelligence (AI) in international arbitration garnered attention well before ChatGPT’s debut in late November 2022. 

AI’s role in the legal sector is undeniably beneficial, offering significant time and cost efficiency in tasks like legal research and document review. 

Its growing presence in law, including AI in international arbitration, raises an important question: Is AI on the brink of, or already assuming, the key roles of lawyers and arbitrators?

This article touches on the effects of AI on international arbitration and the potential onset of an era dominated by “AI arbitrators.”

Are AI-Driven Legal Solutions Outperforming Human Lawyers?

With the advent of AI technology, there’s growing concern about machines replacing human roles, particularly in areas where they may outperform humans. 

For example, research shows AI’s superior efficiency over human attorneys in specific legal tasks. An AI can draft five Non-Disclosure Agreements (NDAs) in 26 seconds with 94.55% accuracy, while human lawyers take much longer and achieve 84.84% accuracy on average.

However, AI is not flawless. A notable incident involved two U.S. lawyers being fined $5,000 for relying on ChatGPT for case law in a submission, only to discover the referenced cases didn’t exist. This underscores the delicate balance needed in using AI, particularly in critical legal areas such as international arbitration. 

The lack of regulation in AI applications in arbitration highlights the need for careful consideration and guidelines, as initiated by organizations like the Silicon Valley Arbitration & Mediation Center (SVAMC). In August 2023, they released the Draft Guidelines on AI Use in International Arbitration for feedback before finalization.

These guidelines propose rules for parties, legal representatives, and arbitrators, distinguishing between appropriate and inappropriate AI uses. Improper use includes AI applications without human oversight in tasks like selecting arbitrators or preparing legal documents.

Legal Community’s Perspective on AI in International Arbitration

Recent surveys, including one by Bryan Cave Leighton Paisner, reveal that many lawyers are cautious about using AI in international arbitration. 

They express concerns about AI’s role in drafting critical arbitration elements, emphasizing the need for transparency in its utilization. 

The legal sector’s apprehension extends to AI-related risks like cybersecurity and maintaining data integrity. 

These concerns highlight a growing trend towards regulating AI in legal practices, as seen in the European Union’s legislative considerations and initiatives like the American Bar Association’s Task Force on Law and Artificial Intelligence. 

This trend underlines the legal community’s focus on balancing AI’s benefits with ethical and professional obligations.

What are the Benefits of AI in International Arbitration?

Embracing AI in international arbitration and the legal field broadly presents substantial advantages. However, it’s crucial to scrutinize the theoretical benefits of AI technology in the legal field, which is still a relatively new application. 

AI’s capabilities, particularly in predictive coding, include the following:

  • Swiftly pinpointing pertinent documents among vast disclosures.
  • Accelerating legal research.
  • Rapidly analyzing transcripts and other tasks.
  • AI enhances efficiency by reducing the time and costs of lengthy arbitrations.

Practical applications, like Brainspace for document review, demonstrate AI’s effectiveness in identifying relevant information quickly. Similarly, generative AI tools from Open-AI, Microsoft, Google, and IBM are gaining traction in arbitration for their analytical prowess. 

However, complexities can lead to AI inaccuracies, like false citations. The event also underscored AI’s utility in crafting legal submissions and procedural templates, enhancing efficiency. Despite AI’s strengths, human oversight remains crucial for ensuring AI outputs’ accuracy and judicious application. 

The collaborative interaction among legal practitioners, arbitrators, and AI is complex, contributing to the organization of evidence, the development of arguments, and the analysis of evidentiary materials. However, human involvement remains essential for the interpretation of AI-generated results.

How is AI Used in Arbitration Proceedings

As mentioned earlier, AI has become integral to various stages in international arbitration, showcasing its potential for significant transformation. 

Let’s look into the key applications of AI in international arbitration:

E-Discovery and Document Review

AI-driven platforms like Retrieval and RelativityOne leverage technologies such as “continuous active learning” and large language models to enhance the efficiency and accuracy of document review. This includes self-training mechanisms and pre-training exercises, reducing the time legal teams spend on repetitive tasks. AI modules like DLA Piper’s Ascension focus on pre-trained detection of specific issues, leading to substantial cost savings.

Legal Research

Platforms like Co-Counsel, Westlaw Edge, and Lexis+ AI analyze legal text to provide prompt guidance, statutes, and precedents. As AI tools evolve, the automation of complex legal research tasks, including drafting legal notes, becomes plausible. However, it is emphasized that lawyers remain responsible for verifying AI-generated content against accurate and reliable sources.

Video source: YouTube/LexisNexis Legal

Language Processing and Drafting

Generative AI is employed for essay-like text creation and is anticipated to see widespread use in legal drafting. For instance, tools like Jus Mundi’s Jus-AI specifically target arbitration and State-State disputes, offering concise summaries from a vast legal database. This enables lawyers to focus on application rather than information sourcing.

Translation and Transcription Services

Automation in transcription, driven by voice recognition and speech-conversion technologies such as those from Opus 2 and TrialView, is on the rise. This is beneficial for virtual hearings in international arbitration. Similarly, translation services are increasingly machine-driven, with human oversight. Tools like Microsoft Teams generate transcripts, aiding lawyers in preparing witness statements, though attention to legal privilege is essential.

Arbitrators and lawyers wearing smart earpieces for instant language translation in a virtual arbitration room, symbolizing seamless global communication.

Selecting Arbitrators

Tools like Arbitrator Intelligence offer nuanced insights into international arbitrators, evaluating their track records in vital case aspects. It generates informative reports by analyzing document rulings, proceeding durations, hearing questions, and final awards. Parties leverage this data for a fee to make well-informed decisions on customized arbitrator nominations. Data quality underscores AI efficacy, which is crucial in confidential commercial arbitrations. Similarly, Jus Mundi’s Conflict Checker assesses relationships among legal entities to prevent conflicts, ensuring integrity in arbitrator selections.

Predictive Analytics

As seen in platforms like LexisNexis’ Lex Machina and Context, predictive analytics uses AI to assess likely case outcomes based on precedents and decisions. While confidentiality in commercial arbitrations limits data availability, these tools are anticipated to see increased use, especially with initiatives for greater transparency in publishing arbitration awards.

What are the Risks of AI in International Arbitration?

Using AI in arbitration hinges on the specific context and the roles of involved parties. Parties might use AI for tasks like document gathering without disclosure but may need to inform others when complying with tribunal orders. For example, while AI might be acceptable for drafting an award’s procedural history, its use in decision-making may require consent.

Implementing AI tools in arbitration also depends on other parties’ awareness and consent and may require tribunal permission. Transparency, such as disclosing AI training data, is crucial for understanding its impact on evidence and case outcomes.

Hallucinations

AI’s occasional confidence in inaccurate answers, termed “hallucinations,” poses credibility risks for lawyers. While developers aim to curb these issues, legal professionals must exercise caution. Treating AI outputs as drafts, lawyers should skillfully prompt and verify results to ensure accuracy. Cultural biases, evident in misinterpretations, demand heightened awareness, especially in international arbitration.

Video source: YouTube/The AI Storm

Procedural Concerns

AI’s use raises procedural concerns, such as potential inaccuracies from machine translations affecting evidence integrity. Predictive coding, one form of technology-assisted review, a procedure employed in e-discovery to accelerate and enhance document review efficiency, is an example of transparency in AI’s application being vital for procedural integrity.

Enforcement Issues

AI’s application may impact due process and fairness, potentially influencing enforcement issues. Emerging regulations could restrict AI’s use in judicial contexts, affecting arbitration compliance and award enforceability. AI usage by arbitrators presents risks, especially regarding the administration of justice and personal mandate fulfillment. The EU AI regulation categorizes some AI systems used in justice as “high-risk,” potentially impacting arbitrators’ tool selection.

Ethical Implications

From an ethical standpoint, legal counsel must carefully consider the implications of AI use, particularly in terms of client confidentiality and truthful representation. As the legal industry evolves with AI integration, regulatory bodies are actively developing specific guidelines that will shape counsel’s responsibilities in arbitration contexts. 

Some jurisdictions, such as the Court of King’s Bench of Manitoba in Canada, have implemented directives requiring the disclosure of AI usage in legal materials, signaling a movement towards greater transparency in arbitration proceedings.

Is AI the Future of International Arbitration?

Much of the legal dialogue surrounding general artificial intelligence (GenAI) revolves around its potential impact on the legal profession. Questions about job displacement, the repercussions of the traditional hourly billing model, and the responsibility for covering technology usage costs dominate these discussions.

Yet, more profound and intriguing considerations exist regarding how this technology might be harnessed for the advantage of arbitration end-users. While fully AI-driven arbitrations are not an immediate reality, the progressing technology suggests the potential to reform the arbitration process, leading to a substantial reduction in time and cost for businesses to resolve disputes – a development viewed favorably.

AI and Blockchain for Secure Arbitration Documents
Legal professionals accessing secure blockchain-stored arbitration documents on a digital wall, ensuring transparency and security in a high-tech room.

Until such advancements materialize, it is imperative for arbitration lawyers and clients to familiarize themselves with the technology, cultivating comfort and expertise. Stakeholders should evaluate the capabilities of these tools in a secure and confidential environment, distinguishing between exaggerated claims and genuine opportunities and leveraging the latter to the fullest.

Numerous critical questions must be addressed, including whether justice administered by machines retains its essence and whether such a transformation is even desirable. Engaging in the ongoing debate and positioning oneself to contribute meaningfully to the conversation is essential. If this engagement does not occur, there is a risk of not being part of the decision-making process when these significant questions find resolution.

AI in International Arbitration: Key Takeaways

The integration of AI in international arbitration represents a significant shift in the legal landscape. The potential for AI to assume key roles in arbitration proceedings signals a transformative era in the legal sector, but it also demands careful consideration and balanced application.

AI platforms like Retrieval, RelativityOne, and Jus Mundi showcase significant advantages in saving time and costs. Yet, instances of ChatGPT misuse in legal submissions underscore the necessity for strict oversight and regulatory guidelines, as advocated by organizations like the Silicon Valley Arbitration & Mediation Center.

The legal community’s cautious approach towards AI underscores the importance of transparency, ethical considerations, and legal process integrity. As AI continues to evolve, it is crucial for legal professionals to stay informed and engaged in the discourse, ensuring that the use of AI in international arbitration aligns with the principles of justice and fairness. 

Ultimately, while AI presents exciting opportunities for innovation in arbitration, its successful integration relies on a collaborative and responsible approach, balancing technological advancements with human expertise and ethical standards.

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Neil Sahota
Neil Sahota (萨冠军) is an IBM Master Inventor, United Nations (UN) Artificial Intelligence (AI) Advisor, author of the best-seller Own the AI Revolution and sought-after speaker. With 20+ years of business experience, Neil works to inspire clients and business partners to foster innovation and develop next generation products/solutions powered by AI.