Incorporating Artificial Intelligence into Arbitration

Introduction

Artificial Intelligence (AI) refers to the ability of computers or computer-controlled robots to perform tasks that require human intelligence and human capabilities. This means programming machines in such a way so that complex human tasks are completed in a fraction of second without the need for human interference.

The world is no stranger to the concept of Artificial Intelligence. A lot of advancements and developments have been made since the concept was first founded in the year 1955 by John McCarthy. It has become the centrepiece of the technological revolution and has managed to influence almost every aspect of our personal and professional life including raising and resolving disputes. Over the years, there have been numerous speculations about its impact on various sectors of the economy. International Arbitration has also become prey to these discussions.

In the post-COVID-19 world, unprecedented changes, and the ability to adapt to those changes have been need of the hour. Even before the pandemic, the process of digitization has helped in the storage of almost every kind of information required in arbitration such as pieces of evidence, details of arbitrators and the witnesses, and any kind of communication between parties to the dispute.

Today, there is a rise in apprehensions regarding the time taken and the resources required for the settlement of disputes. AI can potentially help in alleviating this problem by bringing down the time and costs involved in the settlement of disputes and assist in eliminating the risks and discouraging unsubstantiated claims, thereby motivating to settle early. However, simultaneously, several eyebrows are being raised about the efficacy of AI to dispense justice based on algorithms and their impact on the decision-making process. There have also been doubts regarding its transparency of arbitral data and the capability to protect personal data. These reasons alone may discourage the need to use AI for settling disputes.

How the use of AI will be beneficial for International Arbitration

AI today is at play in various fields like transportation, education, and healthcare and has shown satisfactory results. In International Arbitration as well, a stronger AI has the potential to change the way disputes are settled.

1. Unlike a human brain which tends to be influenced by an external environment during the decision-making process, AI will be independent of any such influence and will be capable of dispensing justice rationally and more effectively.
2. The reason why most parties to a dispute opt for arbitration is because of its ability to settle disputes in a time-effective manner. AI technology would supplement this objective by reducing the burden of people involved in the arbitration proceedings.
3. It can help in eliminating the inefficiency and errors of Human Arbitrators during various stages of arbitration like interpretation and translation of documents, selection of the panel, and during the decision-making process by identifying these flaws and prescribe suggestions to attenuate them.
4. When an award is passed in an arbitration proceeding, there is usually a delay between pronouncement and enforcement of the award. AI aims to reduce this delay and help in the immediate enforcement of the award.

Drawbacks of using AI in Arbitration

Since every coin has two sides to it, so does AI in International Arbitration. Regardless of the advantages, it also has some negative impacts. These are:

1. AI is by no means a cheap form of technology. Due to developments that are taking place daily in this field, there is a constant need to develop new systems and upgrade the existing ones. Also, there is a need to train humans to be able to make use of this technology. Huge investments would be required for this purpose.
2. The purpose of the creation and utilization of AI is to reduce the burden on humans. Therefore, once the system is developed and is put to work, there will be no need to hire qualified individuals since AI would be capable of completing similar tasks in a much more efficient manner and this would result in unemployment.
3. Each case has its own facts, and the awards are also different based on those facts. Since AI renders its decision based on a fixed algorithm, then it won’t be able to pass a reasoned decision which will require human interference at some point, and this shows the lack of flexibility in the system.
4. Machines are emotionless, unlike humans. They don’t have any feelings towards either the parties to the dispute or the award being made. This may lead to the passing of correct but unfair decisions.
5. There is also a threat to data protection. Since these systems are based on algorithms, there is a chance that these systems get attacked by a virus or may even get hacked and all the confidential information gets stolen.
6. Finally, AI systems are programmed by humans. During programming, there is a possibility of errors occurring. Once these errors make their way into the system, the system may generate inaccurate conclusions.

The Future

Currently, there isn’t any legislation that explicitly talks about the usage of AI in the arbitration process. If somehow these systems do get approval from the legal community to be incorporated in arbitration, then, certain regulations and guidelines would be necessary to protect the interest of the parties and the legal community at large or it may lead to the role of human arbitrators becoming completely irrelevant.

Whether one likes it or not, there is no denying that Artificial Intelligence is ready to disrupt the traditional practices in International Arbitration. AI is the future. Like every invention, it has its merits and shortcomings. It depends on us whether we can take advantage of its potential for creating a better world.

Today, a lot of people are opting for alternate forms of dispute resolution, arbitration being the preferred choice of most. It becomes, even so, more cardinal for us to try and incorporate the use of AI in the legal sector. Artificial Intelligence provides arbitration with a golden opportunity to be able to achieve its goal of becoming a time and cost-effective form of dispute resolution.

ABOUT THE AUTHOR

Shreyans Jain is an advocate practicing before the High Court of Delhi and the district courts in Delhi. He is a graduate of VIPS, GGSIP University, Batch of 2014-19. His interest lies in International Commercial Arbitration and International Trade Law.