What is an Arbitration? Artificial Intelligence and the Vanishing Human Arbitrator

15.07.2020

Abstract: Technological developments, especially digitization, artificial intelligence (AI), and blockchain technology, are currently disrupting the traditional format and conduct of arbitrations. Stakeholders in the arbitration market are exploring how new technologies and tools can be deployed to increase the efficiency and quality of the arbitration process. The COVID-19 pandemic is accelerating this trend. In this essay, we analyze the “Anatomy of an Arbitration”. We argue that, functionally, fully AI-powered arbitrations will be both technically feasible and should be permitted by the law at some point in the future. There is nothing in the concept of an arbitration that requires human control, governance, or even input. We further argue that the existing legal framework for international commercial arbitrations, the “New York Convention” (NYC) in particular, is capable of adapting to and accommodating fully AI-powered arbitrations. We anticipate significant regulatory competition between jurisdictions to promote technology-assisted or even fully AI-powered arbitrations, and we argue that this competition would be beneficial. In this competition, we expect that common law jurisdictions will enjoy an advantage: machine learning applications for legal decision-making can be developed more easily for jurisdictions in which case law plays a pivotal role.

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