Arbitration in the Time of Artificial Intelligence
CONTENTS By Andrés Larrea Savinovich
The future is here. Artificial intelligence (AI) has already taken on the stock market. Machine learning and algorithms capable of successfully predicting the stock market are everywhere on Wall Street. But AI has also disrupted another field: the legal profession. AI has changed the way lawyers think, analyze cases and –most importantly– process large amounts of data. Thus, it is not crazy to question whether machines are able to solve disputes. Simply put, the key question is: can robots adjudicate and replace judges and arbitrators? After all, robot judges have already predicted most verdicts of the European Court of Human Rights. Those same machine judges have reviewed and processed the information of more than 500 cases making a decision, which lined up with those made by senior judges in Europe[1].
Recently, international arbitration has faced criticism for getting slower and more expensive than litigation. Moreover, the impartiality of arbitrations has been called into question more than once. But can this technology boom save arbitration from a slow death? First, it is important to analyze what is the value of human judgment in adjudication proceedings. Assuredly, it is not hard to think of robot arbitrators organizing facts, and data and resolving issues of damages calculation in seconds. After all, we cannot deny that algorithms and programs are way more precise on such things compared to their human counterparts.
However, arbitral decisions involve other considerations such as justice, empathy and respect of due process, which might be more familiar for humans than to cold machines. Assuredly, one can think of arbitrators using the benefits that technology offers in order to solve disputes more accurately. Nevertheless, such an idea makes us reconsider the intuitu personae nature of the arbitrators’ mandate[2] in the sense that arbitrators should be the only ones in charge of the decision-making process. If a machine performs part of the arbitrators’ mandate or assists them during the decision-making process, then how is it different from another person (e.g. arbitral secretary) doing all the hard work for them? Maybe the answer to that question is to not have the human adjudicator at all.
It is certainly challenging to think about how technology might affect the practice of international arbitration. It is even more challenging to think about the possibility of having a robot. For those who remain skeptical, here are a few ideas that you might want to reconsider.
First, arbitrators should be impartial and neutral. An arbitrator is impartial when they do not have any direct or indirect link (economic interest, personal relationship) to the parties and their counsels. Hence, the arbitrator will decide the case based on its merits in an objective manner. An arbitrator is neutral when they do not have any prejudice or biases for or against the parties. In the international arbitral arena, it is common for arbitrators to be criticized for serving the interests of big law firms and multinational corporations. A machine arbitrator is programmed to be cold, analytical and impartial. Robots do not have feelings after all (as far as we know). AI arbitrators will analyze massive amounts of data, facts, answer questions of law or predict results eliminating the ever-fallible human element. By the end of the day, a party submitting their disputes to arbitration does not want to have the feeling that they lost their dispute because of an arbitrator’s preference or prejudice against them, or –even worse– finding out that the arbitrator has an economic interest in the outcome of the dispute. It is worth mentioning that some experts suggest that it is precisely the robots’ lack of emotion and empathy that affects their ability to recognize crucial facial expressions and gestures, which might result in them failing to analyze all the important information[3]. However, the outcomes of disputes resolved by robot arbitrators might seem more “fair” as they will strictly observe the merits of the case instead of mixing personal emotions. After all, justice must be blind.
Secondly, machine arbitrators might reduce the increasingly high costs of arbitral proceedings. Technology might be particularly helpful for video depositions, reaccepting testimonies of remote witnesses, reviewing complex documents, and assessing evidence. Robot arbitrators make feasible the opportunity to conduct arbitrations in a speedier manner, as they will take less time in the decision-making process in comparison to human arbitrators, who will take a couple of months to review large amounts of evidence and study facts and precedents in order to make a well reasoned decision. Certainly, robot arbitrators organizing big amounts of data within seconds seem appealing for parties, who do not have time to wait several months or even years for an arbitral award.
One of the biggest challenges of having robots as arbitrators might be related to the enforceability of arbitral awards. Although many countries are signatories to the New York Convention, it is worth noting that, under their internal legislation, local courts might refuse to recognize or enforce awards delivered by machines. Local laws regarding arbitration in most countries usually came into force at times where there was not even the possibility of having an IA arbitrator. But, given the technology development in recent years, it is important for countries to promote legal reforms in order to be more receptive to this reality and foster a more arbitration-friendly environment.
Finally, it is worth mentioning that the international legal framework (e.g. the UNCITRAL Model Law) does not require arbitrators to be humans. So as long as the arbitration agreement is valid and capable of being performed there is not a legal prohibition for parties to appoint robot arbitrators.
In conclusion, arbitration and AI should not be seen as mutually exclusive because they can benefit from each other. Technology certainly transforms alternative mechanisms of dispute resolution. However, it is the very nature of arbitration and other ADR forms to offer parties an alternative for solving their disputes outside the courts. Hence, arbitration practitioners should not close their eyes to the possibility of appointing robot arbitrators. After all, we have seen in many international arbitration cases the multiple benefits that technology has to offer. The purpose of this article is not to convince anyone that a machine is the answer to the crisis that international arbitration has been facing in recent years, but, simply, to offer some perspective on why it might be time to stop resisting change and start embracing technology as the means to a bigger end: the boost of international arbitration worldwide.
[1] Griffin A, 2016, online: < http://www.independent.co.uk/life-style/gadgets-and-tech/news/ai-judge-robot-european-court-of-human-rights-law-verdicts-artificial-intelligence-a7377351.html >
[2] Cohen P, 2017, online: < https://globalarbitrationreview.com/article/1080951/the-march-of-the-robots >
[3] De la Jara, J et al, 2017, online: < http://arbitrationblog.kluwerarbitration.com/2017/05/04/machine-arbitrator-are-we-ready/ >
[*] Andrés Larrea Savinovich is an associate at TOBAR ZVS and an Arbitral Secretary at the Quito Chamber of Commerce. Andrés holds an LL.M. degree from McGill University. The author can be contacted at [email protected]