International Commercial Arbitration in AI Era: From Evidence Verification to Legal Acceptance

INTRODUCTION

Artificial intelligence (AI) plays a pivotal role in the fast-growing technological era, simulating human intelligence into machines and paving the room for self-improvisation in decision-making. This refers to cross-boundary disputes arising from international business transactions, and therefore the parties approach arbitrators for outside court settlement. A survey by the International Chamber of Commerce (ICC) revealed that 67% of legal professionals believe AI will have a significant impact on dispute resolution processes like arbitration within the next decade. When artificial intelligence is integrated into the field of arbitration, there will be a potential improvement in the process of data analytics, but it also evokes complications in the authenticity and secrecy of such arbitration. Through this blog, we will be able to analyse and evaluate whether the current legal landscape of India is ready to consider the evidence verified by AI as authentic, beholding its confidentiality and data security. 

IS THE ADR, NATIONAL AND INTERNATIONAL LEGAL FRAMEWORK READY TO ACCEPT AI-VERIFIED EVIDENCE?

In India, there has been a rapid change in the legal frameworks in the last few decades. The amendment of the Indian Evidence Act, 1872, into the Bharatiya Sakshiya Adhinayam, 2023, has taken a positive approach towards the admissibility of electronic evidence. Similarly, the Arbitration and Reconciliation Act, 1996, provides flexibility in interpreting the inclusivity of AI-based evidence in the arbitration process. Now, let us delve into this. Sections 61 and 63 of BSA 2023 have widened the ambit of electronic devices and their authenticity in being used as evidence. It explores the wide array of electronic devices and documents that can be used as e-evidence, which also enhances the scope of AI-generated and analysed evidence. Subsequently, Section 19 of the Arbitration and Reconciliation Act, 1996, provides the arbitral tribunal with the power to decide the procedure to be followed in the conduct of the arbitral process and provides room for interpretation, including the presentation and admissibility of various kinds of evidence, which may include AI-based evidence. Even though the integration of AI in arbitration and evidence analysis is not implicitly mentioned in the Indian legal framework, it has provided flexibility in decision-making to the tribunal or the judicial authorities in considering whether such evidence will be reliable and authentic. In a futuristic approach, the developments in law and judicial interpretation bringing up various precedents will solidify the scope of integration of AI into legal proceedings and their implementation in arbitration both nationally and internationally.

Shedding light on international commercial arbitration, the major arbitration rules do not currently address AI. In 2020, the recent amendment of the International Bar Association's (IBA) rules on considering evidence did not make any specific revisions in rules connecting to AI, but there was a prominent upgrade as provisions related to cyber security and data protection were added (Article 2.2(e)). Likewise, India has adopted the UNICITRAL model law on international commercial arbitration, which provides a comprehensive framework for arbitration. It evokes flexibility in procedural matters, enabling the use of AI for better functioning. It is to be noted that this is the only international obligation that India needs to follow. Apart from that, there are other international rules and principles on arbitration, but their application may differ across different boundaries. Thus, we can infer that even though AI is used by judges and lawyers for case analysis and draft preparation. It will take significant time for the direct inclusion of the concept of AI into legal frameworks and to consider it as an authentic source for evidence evaluation as there is a huge conspiracy regarding the confidentiality and authenticity of AI-based information.

EVALUATING THE RISK IN SECURITY AND CONFIDENTIALITY OF AI-ANALYSED EVIDENCE AND AI-ARBITRATORS: AN OVERVIEW

“Technology is here to stay for the future, forever.”-Hon’ble Chief Justice D.Y Chandrachud.

AI is expected to peak in its abilities in the upcoming years. Currently, AI focuses on replenishing and gathering information from different parts of the world in adherence to the command prompts received from the users. However once it attains a state of equilibrium, it can be improved into a more secure and authentic platform for the users. In a field like arbitration, such setbacks of the AI can become a huge risk as it involves handling sensitive and confidential information of the parties. This gives rise to conducting analysis to understand the limitations and risks connected to data security and authenticity while handling AI-based evidence and considering AI as arbitrators. 

Arbitration is a field that gives importance to accuracy and credibility. Firstly, AI may confidently assert to provide incorrect answers due to the irregularities in the vast amount of data stored in it. Data that is stored can also contain biases that may affect the reliability of the resources. This could undermine the standard of legal procedures and deprive parties of opting for arbitration both in national and international contexts. 

Secondly, data analytics through AI may detect patterns and try to imitate them with different prompts. This could sometimes lead to misinterpretation, especially in international commercial arbitrations, as it may not necessarily reflect an actual understanding of what it is asked for, leading to failure to convince the parties when performed as AI- arbitrators. This is because arbitration is an intellectual and consensual process where an arbitrator maintains neutrality and puts himself in the shoes of the parties to bring the dispute to a proper conclusion. Thus, we can understand that there are limitations in AI replacing human arbitrators due to emotional constraints. 

Third, while examining the secrecy and security of the information saved, it is clear that sensitive information was exchanged through AI platforms and was regenerated as a result of AI contingencies for identifying and safeguarding such information. A recent example underscores the legitimacy of these concerns. Recently, a Samsung developer uploaded lines of sensitive code to CHATGPT while attempting to patch a defect on two different occasions. Later, users from other companies were able to replicate the information since CHATGPT stores it for training its model. Along with the risk of accidental disclosure by AI tools, there were also times when volumes of confidential data stored together were inevitably prone to the risk of cyber security breaches. In 2015, hackers invaded the website of the Permanent Court of Arbitration through malware to seize information while the arbitration between China and the Philippines regarding disputed territory in the South China Sea was still pending. There are methods to counter risk, but currently, it does not deal with the risk emanating from using AI. 

Finally, another issue is with AI forgeries, as unscrupulous parties may tend to create fake documents, photographs, or video evidence. Even though there are high chance that it might show inaccuracies in identifying the manipulations, various mechanisms and innovations are emerging to improve the authenticity of such evidence and documents. It also helps in enhancing its acceptance in public and legal frameworks.

 CONCLUSION

In a Nutshell, the role of AI in evidence analysis is comparatively less controversial than its application in the decision-making process of international commercial arbitration. Its potential in reviewing documents, data extraction and anomaly detection is commendable, and this makes them prominent giants in the technological era. Artificial Intelligence allows legal practitioners and arbitrators to focus on the tactical and innovative aspects of the case without procrastinating in analysing vast amounts of data. However, the benefits of AI come with certain challenges which need to be overlooked. This evokes the need for governmental authorisation of the use of AI in legal frameworks and improving the data security credentials of the parties by assigning squads under the government to monitor and authenticate the works of AI-Arbitrators. Ultimately, the inclusion of AI into the legal world should not be restricted but be welcomed with a conscious approach.

REFERENCES

1.Intelligence in Arbitration: Evidentiary Issues and Prospects, Global Arbitrationreview  com. (n.d.). Artificial  [online] Available at: Artificial Intelligence in Arbitration: Evidentiary Issues and Prospects - Global Arbitration Review [Accessed 25 Sept 2024].

2.Gopal, V.R.N. (2023). Harnessing the power of Artificial Intelligence in Arbitration: A comprehensive analysis of Indian jurisprudence. [online] Bar and Bench - Indian Legal news. Available at: Harnessing the power of Artificial Intelligence in Arbitration: A comprehensive analysis of Indian jurisprudence (barandbench.com) [Accessed 25 Sept 2024].

3.Iareporter.com. (2015). Permanent Court of Arbitration website goes offline, with cyber-security firm contending that security flaw was exploited in concert with China-Philippines arbitration | Investment Arbitration Reporter. [online] Available at: http://www.iareporter.com/articles/permanent-court-of-arbitration-goes-offline-with-cyber-security-firm-contending-that-security-flaw-was-exploited-in-lead-up-to-china-philippines-arbitration/ [Accessed 25 Sept 2024].

4. IBA Rules on the Taking of Evidence in International Arbitration Adopted by a resolution of the IBA Council 17 December 2020 International Bar Association. (n.d.). Available at:  MediaHandler (ibanet.org) [Accessed 25 Sept 2024].

5.United Nations (2012). UNCITRAL Model Law on International Commercial Arbitration (1985), with amendments as adopted in 2006 | United Nations Commission On International Trade Law. [online] Un.org. Available at: https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration [Accessed 25 Sept 2024].

ABOUT THE AUTHOR Maria Shiyon K.B is a second-year BBA LL.B (HONS.) student at the School Of Legal Studies, Cochin University Of Science And Technology, Kerala.