The Digital Revolution in International Commercial Arbitration: Investigating Potential of Artificial Intelligence in Dispute Resolution

Hosseini, Seyed Amirali; Hashemizade, Kahni,, Seyed Alireza

doi:10.48308/eclr.2025.237427.1102

The Digital Revolution in International Commercial Arbitration: Investigating Potential of Artificial Intelligence in Dispute Resolution

Document Type : Original Article

Authors

seyed amirali hosseini ¹

Seyed Alireza Hashemizade, kahni, ²

¹ PhD student in private law, Department of Law, Karaj Branch, Islamic Azad University, Karaj, Iran.

² Assistant Professor of Private Law, Department of Law, Karaj Branch, Islamic Azad University, ,

https://doi.org/10.48308/eclr.2025.237427.1102

Abstract

The development of technologies in recent years, particularly artificial intelligence (AI), has transformed the structure and processes of arbitration. These advancements allow AI to predict new disputes by analyzing and comparing judicial decisions. Consequently, some countries are utilizing these technologies to resolve minor and small-scale disputes. This paper aims to clarify how adaptable the existing legal framework in international commercial arbitration is to AI arbitration.

However, AI as an arbitrator faces several challenges. These include the lack of precedents, the inability to reason and justify decisions, and concerns regarding impartiality and independence. AI cannot address the complexities and standards of arbitration effectively. Therefore, it is more beneficial to use these technologies to assist human arbitrators in resolving disputes. This research was conducted through a library study using an analytical-descriptive and applied approach. It examined domestic and international sources, comparing and evaluating the existing legal capacities in international commercial arbitration .

Keywords

Artificial Intelligence

International Commercial Arbitration

Artificial Intelligence Arbitrator

Robotic justice

independence and impartiality of the arbitrator

References

Books
1. Abdel Wahab, Mohamed S., M. Ethan Katsh, and Daniel Rainey. Online Dispute Resolution: Theory and Practice: A Treatise on Technology and Dispute Resolution. The Hague, Portland, OR: Eleven International Pub. 2012.
2. Born Gary. International Commercial Arbitration, 2nd Ed, Kluwer Law International, Netherlands, 2014.
3. Bostrom, Nick, Superintelligence: Paths, Dangers, Strategies Oxford University Press, Oxford, 2014.
4. Kurkela, Matti S., Turunen, Santtu, due process in international commercial arbitration, 149-50, 2nd ed, 2010.
5. Mafi, Homayoun, Commentary on the Law of International Commercial Arbitration of Iran, 2nd edition, Tehran: University of Judicial Sciences Press, 2015. (in Persian)
6. Nikbakht, Hamidreza, International Commercial Arbitration "Arbitral Proceedings", 1st edition, Tehran: Institute of Business Studies and Research, 2009. (in Persian)
7. Paulsson, Jan, The Idea of Arbitration, Oxford: Oxford University Press, 2013.
8. Rubino-Sammartano, Mauro, International Arbitration Law and Practice, 2nd ed., Kluwer Law International, The Netherlands publisher, 2001.
Articles
1. Afzali Goroh, Rouhollah, Mohammadi, Bahman. "The Position of Public Order in the Execution of Arbitration Rulings International Business". Modern Jurisprudence and Law, 3(10), 2022, pp 173-152. (in Persian)
2. Bahmaei, Mohammad Ali., Solhi, Ehsan. “The Challenges of Recognition and Enforcement of Arbitration Agreements under Article 2 of the New York Convention 1958”, The Judiciary Law Journal, 85(114), 2021, pp. 107-134. (in Persian)
3. Bakhtiarvand, Mostafa, Ahmadi, Mitra, "Different Types of Awards in International Commercial Arbitration with an Emphasis on Iranian Law", International Law Review, 35(Issue 58, Spring and Summer 2018, pp. 273-298 . (in Persian)
4. Bennett Moses, Lyria, “Recurring Dilemmas: The Law's Race to Keep Up with Technological Change”. UNSW Law Research Paper No. 2007.
5. Borumand Bibi Fatemeh, Shahbazinia, Morteza, Arabian Asghar. "Procedural Good Faith of Arbitration Parties in England and Iranian Law”, CLR; 24 (4), 2020, pp 1-24. (in Persian)
6. Burrell, Jenna, “How the Machine Thinks: Understanding Opacity in Machine Learning Algorithms”, 2015.
7. Calo, Ryan, “Robots as Legal Metaphors”. Harvard Journal of Law and Technology, 2017, Vol. 30, No. 1, 2016, University of Washington School of Law Research Paper No. pp 2017-04.
8. Cole Dorsey, “Hypothetical AI Arbitrators: A Deficiency in Empathy and Intuitive Decision-Making”,13 Arb. L. Rev. 2021.
9. Crootof, Rebecca, “Cyborg Justice the Risk of Technological-Legal Lock-In”. Columbia Law Review Forum, 2019.
10. Cuniberti, Gilles, "Rethinking International Commercial Arbitration", University of Luxembourg. 2017.
11. Eidenmüller, Horst, Faidon, Varesis, “What is Arbitration? Artificial Intelligence and the Vanishing Human Arbitrator”, 23, 2020.
12. Eskini, Rabia, Khakpour, Ahad. "The Tension between Transparency and Confidentiality in International Arbitrations", The Quarterly Journal of Judicial Law Views, 24, 86, 2023, pp 45-64. (in Persian)
13. EsmailPour, Mohammad Amin, "Feasibility of Using Artificial Intelligence in the Evaluation of Arbitration Evidence in Transnational Rules", Journal of Legal Research, 2024. (in Persian)
14. Gandomkar, Reza Hossein., Salehi Mazandarani, Mohammad., Hamidi, Mohammad Mahdi, "A Comparative Study of the Possibility of the Existence of Legal Personality for Intelligent Systems in Islamic Jurisprudence, Iranian law and Law of the West', Comparative Studies on Islamic and Western Law, 8, No 4, 2021, pp 235-266. (in Persian)
15. Gilles, Myriam, The Day Doctrine Died: Private Arbitration and the End of Law”. 2016 U. Ill. L. Rev. 371, 2016, Cardozo Legal Studies Research Paper No. p 436.
16. Gülüm Bayraktaroğlu-Özçelik & Ş. Barış Özçelik, Use of AI-Based Technologies in International Commercial Arbitration, 12(1) EUR. J. L. & TECH. 1, 2021, pp 4-5.
17. Haji Deh Abadi, Mohammad Ani, Khaleghi, Abolfath, Saghafi, Parisa, "The Probative Value of Smart Proofs Looking at the Thematic and Methodological Evidence'”, ModernTechnologies Law, 5 No 10, 2024, pp. 183-197. (in Persian)
18. Hope, James, "Can a Robot Be an Arbitrator?", Stockholm Arbitration, 103, 2019, p 111.
19. Horton, David, “Forced Robot Arbitration”. Cornell Law Review, Vol. 109, 2023, forthcoming 2023.
20. Kasap, Gizem Halis, “Can Artificial Intelligence (AI) Replace Human Arbitrators?” Technological Concerns and Legal Implications, 2021, J. Disp. Resol.
21. Khazaei, Hossein, "Private and Confidential Boundaries of Arbitration In Domestic and International Trade Law," Law Quarterly, 39, No 3, 2009, -.(in Persian)
22. Khedri, Saleh, "Procedural Principles in International Commercial Arbitration", Law Quarterly; 44, No 4, 2014, pp 527-543. (in Persian)
23. Knapp, Charles L. “Taking Contracts Private: The Quiet Revolution in Contract Law”, 71 Fordham L. Rev. 2002, p 761.
24. Lage-Freitas A, Allende-Cid H, Santana O, Oliveira-Lage L. “Predicting Brazilian Court Decisions”. PeerJ Comput Sci. 2022.
25. Lindquist, Derick H. and Ylli Dauta, “AI in International Arbitration: Need for the Human Touch”, 2021 J. Disp. Resol. 2021.
26. Liu, Joe, “The Human Impact on Arbitration in the Emerging Era of Artificial Intelligence”. Contemporary Asia Arbitration Journal, Vol. 17, No. 1, 2024, pp 91-116.
27. Mafi, Homayoun, Ghanad, Fatemeh, Esmaeilpour, Mohammad Amin, "The Place of Artificial Intelligence in the Validation of Arbitration Evidence", Fares Law Research, 6, No 18, 2024, pp 5-24. (in Persian)
28. Mafi, Homayoun, Ghavami, Behzad, Mohammadi, Sam, "The Independence and Impartiality of Arbitrator in International Arbitration with Emphasis on Judicial Judgments", Legal Research Quarterly, 25, No 97, 2022, (in Persian)
29. Marrow, Paul Bennett and Karol, Mansi and Kuyan, Steven, 2020. “Artificial Intelligence and Arbitration: The Computer as an Arbitrator — Are We There Yet?” (October 1, 2020). 74 Dispute Resolution Journal 35 (American Arbitration Association), 2020.
30. Mostafa, Mozaffari, Mirzaei Moghadam, Morteza, ''The Feasibility of Arbitration of Legal Entities Regarding the Jurisprudence", Ray (Judicial Case Review), 9, No 32, 2020, pp 15-33 (in Persian)
31. Niknejad, Javad, Heydari, Nosrat, "Justification, Documentation and Reasoning of the Court's Verdict and Judging the Guarantee of Its Execution", Private Law Research, 9(35), 2021, pp 157-186. (in Persian)
32. Olumi Yazdi, Hamidreza, Derakhshan nia, Hamid. "Study Court Intervention in the Appointment of Arbitrator, Review Law, Jurisprudence and Presentation Template", Private Law Research, 6, No 22, 2018, pp 93-117. (in Persian)
33. Peng, Zhao, Run Zong Fu, Han Peng Chen, Kaede Takahashi, Yuki Tanioka and Debopriyo Roy. “AI Applications in Emotion Recognition: A Bibliometric Analysis.” SHS Web of Conferences, 2024.
34. Petrin, Martin, “Corporate Management in the Age of AI”. Columbia Business Law Review, Forthcoming, UCL Working Paper Series, Corporate Management in the Age of AI (No.3/2019), Faculty of Laws University College London Law Research Paper No. 3/2019.
35. Rahbari, Ebrahim, Shabanpoor, Ali, "The Challenges in Employing of AI Judge in Civil Proceedings", Legal Research, Vol. 25, 2023, pp: 419-444. (in Persian)
36. Rhim, Young-Yik, Park, Kyung Bae, “The Applicability of Artificial Intelligence in International Law”, 12 J. EAST ASIA & INT’L L. 7, 2019, pp 21-22.
37. Scherer, Maxi, “Artificial Intelligence and Legal Decision-Making: The Wide Open? Study on International Arbitration”, Queen Mary School of Law Legal Studies Research Paper No. 2019, p 318.
38. Shams, Abdollah, "Legal Nature of Arbitration", Legal Research Quarterly, 18, No 70, 2015, pp 1-29. (in Persian)
39. Shih, Sean, Chang, Chin-Ru, "The Application of AI in Arbitration: How Far Away Are We from AI Arbitrators?", Contemporary Asia Arbitration Journal, Vol. 17, No. 1, 2024, pp 69-90.
40. Sternlight, Jean, "Creeping Mandatory Arbitration: Is it Just?", Stanford Law Review. 57. (2007) 10.2307/40040228.
41. Strong, S. I. “Reasoned Awards in International Commercial Arbitration: Embracing and Exceeding the Common Law-Civil Law Dichotomy”, 37 Mich. J. Int'l L. 2015.
42. Surden, Harry, “ChatGPT, Artificial Intelligence (AI) Large Language Models, and Law Fordham Law Review”, Vol. 92, 2024, U of Colorado Law Legal Studies Research Paper No. 2024, pp24-15.
43. Vij, Abhilasha, “Arbitrator-Robot: Is A(I)DR the future?”. 39 ASA Bulletin 1/2021 (March) 2020, pp 123.
44. Wang, N., Tian, M.Y. “Intelligent Justice: Human-Centered Considerations in China’s Legal AI Transformation”. AI Ethics 3, 2023, pp 349–354.
45. Yang, Inae, "Procedural Public Policy Cases in International Commercial Arbitration", 69 DISP. RESOLUTION J. 2014, pp 61- 65.
46. Yu H & Shore L. “Independence, impartiality and immunity of arbitrators - US and English Perspectives”. International and Comparative Law Quarterly, 52 (4), 2003, pp 935-967.
Cases
1. Commonwealth Coatings Corp. v. Cont’l Cas. Co., 393 U.S. 145, 150, 1968.
2. R v. Gough [1993] AC 646 (Eng.).
3. Roberts v. AT&T Mobility LLC, 877 F.3d 833, 844 (9th Cir. 2017)
4. Smart Systems Technologies Inc. v. Domotique Secant Inc., [2008] J.Q. No. 1782, 2008 QCCA 444.
5. United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 598, 1960.
6. Volt Info. Scis. Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 479, 1989.
Law
1. European Parliament legislative resolution of 13 March 2024 on the proposal for a regulation of the European Parliament and of the Council on laying down harmonised rules on Artificial Intelligence (Artificial Intelligence Act) and amending certain Union Legislative Acts, COM (2021) 0206 – C9-0146/2021 – 2021/0106 (COD) (2024).
Websites
1. ClauseBuilder, AM. ARB. ASS’N, https://www.clausebuilder.org/ (last visited 29 March 2024).
2. Fazio, Giorgio. Elon Musk Predicts AI Will Surpass Doctors and Lawyers: Are Humans the New Backup for Intelligence? November 29th, 2024, https://hackernoon.com/elon-musk-predicts-ai-will-surpass-doctors-and-lawyers-are-humans-the-new-backup-for-intelligence.
3. Guidelines on the Use of Artificial Intelligence in Arbitration: Draft of 31 August 2023, SILICON VALLEY ARB. & MEDIATION CTR. (2023), https://thearbitration.org/wp-content/uploads/2023/08/SV AMC-AI-Guidelines-Consutattion-draft-31-August-2023-1.pdf.
4. Jose Maria de la Jara, Alejandra Infantes, and Daniela Palma, Machine Arbitrator: Are We Ready? kluver arbitration blog, 2017, http://kluwerarbitrationblog.com/2017/05/04/machine-arbitrator-are-we-ready/.
5. Wallace, Jocelyn Turnbull Sandra (Aigbinode) Lange, Goldenberg, Adam Arbitration and AI–Friends or Foes? LEXOLOGY (Aug.29,2022),https://www.lexology.com/library/detail.aspx?g=3d3c0c40-4255-4d4c-95be-abf4865ac191.