Innovation in arbitration: The technological revolution in dispute resolution
Samaa Haridi
King & Spalding LLP, New York
sharidi@kslaw.com
The International Bar Association’s 23rd Annual Arbitration Day, which I had the honour of co-chairing in Istanbul in 2022, focused on a theme that has become increasingly significant: "Innovation 360: New and Novel Ideas for the Practice of Arbitration." As we navigate the complex and evolving field of international arbitration, one thing is clear—technology is revolutionising the way we resolve disputes, bringing efficiency, accessibility, and transformative change to our practice. Although disputes are an inevitable part of global commerce, we now have the tools to handle them in ways that were previously unimaginable. Arbitration, already a preferred alternative to litigation for its flexibility and efficiency, is on the cusp of even greater innovation. This article explores the ways in which technology is driving this change and how the arbitration community can thoughtfully embrace it.
The role of technology in arbitration
Arbitration has always been seen as a faster, more efficient alternative to litigation, especially in complex cross-border disputes. But technology has propelled these advantages even further, creating new paradigms for dispute resolution. A prime example of this is online dispute resolution (ODR), which allows parties to resolve conflicts entirely or primarily online.
ODR is not a new concept. Institutions such as the International Chamber of Commerce (ICC), the World Intellectual Property Organization (WIPO), and the American Arbitration Association (AAA) have been exploring its potential for years. As early as 2004, the ICC launched guidelines on the use of information technology in arbitration, laying the foundation for modern developments. More recently, in 2022, the ICC introduced "Case Connect," a secure online case management system that enables arbitrators, parties, and the Secretariat to communicate and share documents efficiently.
Other institutions have followed suit. For example, the Singapore International Arbitration Centre (SIAC) has introduced a draft of its seventh edition of the SIAC Rules, which includes provisions for the SIAC Gateway, an online case management system. SIAC has even introduced a default rule for expedited procedure hearings to be conducted online unless parties agree otherwise.1 These developments demonstrate a strong institutional commitment to leveraging technology to streamline arbitration processes.
Current innovations in international arbitration
Beyond ODR, one of the most impactful technological advances in arbitration today is artificial intelligence (AI). Initially, AI was used for relatively mundane tasks like classifying documents or generating privilege logs, but it has since evolved into far more sophisticated uses. Now, generative AI, which can create new text, images, and other forms of data, is changing the way we think about the future of arbitration.
Tools like ChatGPT, Jus Mundi’s AI-powered research assistant, and Thomson Reuters’ CoCounsel are already assisting arbitrators and lawyers in tasks ranging from legal research to document summarization. In China, AI is being tested as an assistant in drafting decisions, with institutions like the Shenzhen Court of International Arbitration exploring AI’s potential to help arbitrators analyze cases and review documents.2
These advancements aren’t confined to a single region or practice. In Singapore, the courts are testing AI for small claims tribunals, and the country’s Chief Justice has even suggested that there might come a day when judges need not be trained in law to administer justice, thanks to AI’s potential.3
But AI’s reach doesn’t end there. Large law firms, particularly those handling complex international arbitrations, are considering how to leverage AI in new ways. For instance, Burford Capital, a leading litigation funder, is exploring the use of AI to predict case outcomes based on their proprietary database of past cases.4 This suggests a future where AI could be integral not just to case management, but also to strategy development.
The benefits of innovation
The most obvious benefits of these technological innovations are efficiency and cost savings. Arbitration has long been favoured for its ability to reduce the time and expense involved in resolving disputes, and these tools only enhance those advantages. AI, for example, can help identify frivolous claims early in the process, allowing parties to focus their resources on substantive issues.
Moreover, the rise of AI tools may help smaller firms compete with larger, more established practices. By automating certain tasks traditionally performed by junior associates—such as sifting through documents or summarizing case law—smaller firms can produce high-quality work with fewer resources. This could democratize the practice of arbitration, offering smaller firms a more level playing field.5
Challenges and risks
Yet, for all its promise, the integration of technology into arbitration is not without its challenges. AI, in particular, raises significant ethical and practical concerns. The "black box" problem—where AI reaches conclusions through patterns that humans can’t fully understand—creates issues around transparency and trust.6 In the context of arbitration, where parties rely on fairness and due process, the opacity of AI decision-making can be particularly troubling.
Furthermore, the potential misuse of technology, such as "deepfake" videos or fake testimony in remote hearings, poses a real threat. As these technologies become more sophisticated, arbitrators and practitioners must remain vigilant against the risks of manipulation. For instance, it’s now possible to create live deepfake videos that could be used in remote testimony, potentially compromising the integrity of proceedings.
There’s also the question of confidentiality. Many AI tools, such as ChatGPT, do not offer guarantees of confidentiality, which is a cornerstone of international arbitration. While some AI services have developed systems that maintain privacy, it’s crucial for practitioners to remain cautious when using AI for sensitive matters.
The future of arbitration and technology
Looking ahead, it’s clear that technology will continue to play a transformative role in arbitration. But as we embrace these tools, we must do so thoughtfully. Generative AI, in particular, presents both opportunities and challenges. While AI can assist with document review, legal research, and even drafting decisions, it also introduces risks, such as bias, errors, and a lack of accountability.
Additionally, AI itself will likely become the subject of future disputes. For example, questions about AI’s role in decision-making could arise in annulment proceedings, where parties challenge the use of AI in the arbitration process. Similarly, disputes over intellectual property rights for AI-generated inventions—such as the case involving the AI system DABUS—could become more common, further complicating the legal landscape.7
Despite these challenges, arbitration remains well-suited to handle disputes arising from technological innovation. In fact, a recent survey by the International Bar Association suggests that arbitration is preferred over litigation for resolving disputes involving emerging technologies like AI, smart contracts, and cryptocurrencies.8
Conclusion: embracing innovation, thoughtfully
The integration of technology into international arbitration is not only inevitable but also necessary. These innovations hold the potential to make arbitration more efficient, accessible, and cost-effective. However, as we incorporate AI and other tools into our practice, we must remain mindful of their risks and limitations.
This is an exciting time to be an arbitration practitioner. We have a unique opportunity to shape the future of dispute resolution, using technology to improve the quality and efficiency of arbitration while safeguarding its core principles. By embracing these innovations thoughtfully, we can ensure that arbitration continues to be a leading method of resolving disputes in an increasingly complex and digital world.
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1 See SIAC, Arbitration Rules of the Singapore International Arbitration Centre (7th edition) (Consultation Draft) https://siac.org.sg/wp-content/uploads/2023/08/Draft-7-Edition-of-the-SIAC-Rules-Consultation-Draft.pdf.
2 Paul Mozur, ‘Beijin Wants A.I. to Be Made in China by 2030’, https://www.nytimes.com/2017/07/20/business/china-artificial-intelligence.html (accessed 6 September 2024). See also Tara Vasdani, ‘Robot justice: China’s use of Internet courts’, https://www.lexisnexis.ca/en-ca/ihc/2020-02/robot-justice-chinas-use-of-internet-courts.page; Zhuhao Wang, ‘China’s E-Justice Revolution’ 150:1 Duke Law School, Judicature (2021) (“This is not to say that legal AI is replacing human judges in making rulings and case decisions in China, as some reports have claimed. Such reports are overstatements and quite misleading. Even though expectations are higher than ever, AI judging in a real sense has not yet become a reality in Chinese courts. Nor is it likely to happen in the near future”), https://judicature.duke.edu/articles/chinas-e-justice-revolution/.
3 See Lydia Lam, ‘Generative AI Being Tested for Use in Singapore Courts, Starting with Small Claims Tribunal’, https://www.channelnewsasia.com/singapore/artificial-intelligence-court-small-claims-singapore-chatgpt-3801756. (accessed 6 September 2024).
4 Christopher Bogart, “Generative AI and arbitration finance: Not Yet a Paradigm Shift.”
5 Maxim Osadchiy, “Will AI fundamentally disrupt international arbitration as a practice and as a profession for young lawyers?”
6 Rahim Moloo & Praharsh Johorey, ‘Why Artificial Intelligence Cannot Deliver Justice’
7 Thaler v Comptroller-General of Patents, Designs and Trade Marks [2023] UKSC 49. See also Commissioner of Patents v Thaler [2022] FCAFC 62.
8 Neil Hodge, Companies Prepare for Disputes as AI Use Increases, https://www.ibanet.org/disputes-AI-use-increases (accessed 6 September 2024).