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Artificial Intelligence and Arbitration
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Artificial Intelligence and Arbitration

The major issue with AI in arbitration in India is the lack of a legal framework that could safeguard the process, with fewer complications

Post by RK News on Wednesday, May 24, 2023

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As per the M. Weik Standard Dictionary of Computers and Information Processing, (Rev. 2d ed. 1977), artificial intelligence (AI) can be defined as the capability of a device to perform functions that are normally associated with human intelligence, such as reasoning, learning and self-improvement. Coined in1956 by John McCarthy, a Computer Scientist, its usage, and scope have increased tremendously. AI is gradually becoming a part of almost every industry, with the efflux of time. Arbitration is one of the fields of law, where the use of AI is growingsignificantly but the adoption of AI inArbitration, brings with it, many intriguing questions for all of us. It will be interesting to see as to what role will human judgment play in the arbitration process, and also the suitability for computer-based technology to make decisions that will have significant effecton the lives of people. Also, how can AI bring confidentiality and data protection into the picture, are some of the questions on everyone’s mind and only time will reveal their answers.

Without a doubt, AI will helpin reducing the paperwork,management as well as the organization of evidence, along with it, making the process of consultancy less expensive.


Many countries like the United States, Singapore, United Kingdom, etc., have adopted the use of AI in Arbitration, aimed at reducing the workload on humans and making justice more transparent. However, many research studies suggest that AI cannot completely replace human practitioners in the field of arbitration. Currently, when it comes to the blockchain and other technology-driven aspects, there is a dearth of laws on such subjects. The use of AI in arbitration raises many legal implications that must also be considered. Firstly,the issue of bias appears before us. AI systems are only as unbiased as the data they are trained on. If the data used to train the AI system is biased, the decision-making process of the AI system will be biased as well. This can lead to decisions that would unfairly favour one of the parties in a dispute. The question of transparency is another issue as the algorithms used for arriving at a decision are frequentlychallenging to comprehend. Whether the use of AI in arbitration will increase the level of transparency in the decision-making process, that remains to be seen. The problem of accountability is another issue as the arbitrator is responsible for his / her judgement in conventional arbitration but who will be in-charge of taking decisions in an AI-based arbitration.


The UNCITRAL Model Law is being used as the foundation for deploying AI for arbitration. The application of AI to improve productivity and settle disputes is being studied. Translation is one of the main uses, and it is frequently carried out in arbitration. However, sometimes making decisions can be difficult. The application of AI was pioneered in the UK in the case of Pyrrho Investments Ltd. v. MWB Property Ltd. It was employed for both organizing and sorting documents. In such cases, AI can take over the roles of humans in a positive manner. The increasing impact of AI on all facets of society and the global economy has made it an important subject in international agreements. Countries are now debatingtheways to control and oversee the creation, implementation, and utilization of AI.The use of Dispute Resolution Expert System has been carried out recentlyfor resolving construction disputes. It is a machine-learning system created to deliver decisions based on industry rules and regulations. To train the algorithmmake reliable decisions, data from earlier disputes and court matters are used. Hence, the concept of machine arbitration is on the rise and is being adapted rapidly. The practitioners are also offered resolution services through mixed capabilities of humans and computers, which is giving rise to the use of AI in international agreements across the world.


Singapore is known for creating asystem that favors arbitration and has been using AI in arbitration effectively. To increase the effectiveness and speed of the arbitration process, the Singapore International Arbitration Centre (SIAC) recently unveiled the "SIAC AI" - an AI-based arbitration tool. The tool analyses legal papers using natural language processing to find pertinent legal concerns. By doing so, the arbitration procedure takes less time, is less expensive, and may even speed up the resolution of conflicts between the parties. The use of AI in arbitration has also been growing in the United Kingdom. A platform driven by AI named "LCIA-Digital" has been made available by the London Court of International Arbitration (LCIA) to enable virtual hearings and speed upthe arbitration process. The platform enables remote hearings and document management using video conferencing technologies and AI-powered tools.


This will help in reducing travel time and expensesand parties may be able to settle disagreements more rapidly.China is also quickly implementing AI in many sectors, including arbitration. A platform driven by AI has been introduced by the Beijing Arbitration Commission (BAC) to assist parties in online dispute resolution. The software analyses legal papers and finds pertinent legal concerns using natural language processing and machine learning. This again will help in the arbitration procedure, taking less time and may even speed up the resolution of conflicts. Further, Canada has been moving towards using AI for arbitration. A task group has been established by the Canadian Bar Association to investigate the possible advantages and difficulties of applying AI in arbitration. It is looking into how AI can be utilized to speed up and lower the cost of arbitration. The ethical and legal ramifications of deploying AI in arbitration are also being investigated.


The laws that govern AI arenot present in India. The government in the year 2018 stated that thepreparation of specific laws, and regulations when it comes to Artificial Intelligence is in process. A report by NITI Aayog in2021 talked about the future of dispute resolution in India and recognized the potential of AI in achieving better outcomes in the field of arbitration. The report highlighted that with the help of AI and other technological tools, the dispute settlement process will change by leaps and bounds. AI can efficiently structure complicated issues, point out trade-offs, and assist parties in finding the best course of action possible. Furthermore, technologies like AI can be scaled up to address multiple disputes at once, decreasing the time taken to resolve disputes. In the same way, the UNCITRAL Convention on Electronic Communications in International Contracts, 2007 in its articles 6 and 18, states the important factors that expand the scope of blockchain contracts and the flow of electronic data in the process of arbitration. If AI is used in India efficiently, with a view, to expand arbitration, it would also strengthen the technological legal framework of the country. The major issue with AI in arbitration in India is the lack of a legal framework that could safeguard the process, with fewer complications. With the coming of AI in the legal field, everyone is confident that the future of justice looks promising as justice must always be dispensed but only time will tell as to whether AI can be a game-changer in the legal field.




(Muneeb Rashid Malik is an Advocate practicing before the Supreme Court of India and Chetna Alagh is a final-year law student at the University of Petroleum and Energy Studies, Dehradun. The authors can be reached at muneebrashidmalik@gmail.com and alaghchetna@gmail.com respectively)

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