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THE ROLE OF ARTIFICIAL INTELLIGENCE IN ARBITRATION : THE FUTURE OF DISPUTE RESOLUTION IN INDIA

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Authored By: LEONA TOM

KRISTU JAYANTI UNIVERSITY

Introduction

Arbitration is an alternative dispute resolution mechanism that provides a quicker, more reliable, and simpler resolution process compared to traditional courtroom litigation. It is widely used in international commercial transactions, supported by prominent arbitration institutions that facilitate these proceedings. Artificial Intelligence (AI) technology has significantly improved overall efficiency in the legal domain, with applications ranging from document classification and legal research to legal drafting, analysis, and summarization.

A widely known technology-based approach in dispute resolution is Online Dispute Resolution (ODR), which resolves disputes virtually through the use of AI, smart contracts, and automated tools. Similarly, robo-arbitrators and AI-fortified systems are emerging as mechanisms to make arbitration procedures more efficient and cost-effective. India has adopted digital redressal mechanisms in dispute resolution for certain enterprises and online payment systems. Countries such as China and Singapore have already implemented technology assistance in arbitration and tribunal processes. The integration of technology in arbitration ensures quicker and more efficient procedures while maintaining greater flexibility compared to traditional litigation.

This article examines the role of AI in arbitration while considering the critical importance of human control over procedural decision-making. It analyzes the current state of AI adoption in Indian arbitration and explores how other jurisdictions integrate technology into their arbitral frameworks.

Legal Framework in India

Arbitration in India is primarily governed by the Arbitration and Conciliation Act of 1996 (hereinafter referred to as the “1996 Act”). However, this legislation contains no provisions specifically accommodating AI or advanced technology into arbitral procedures. The 1996 Act does support arbitration agreements conducted through electronic means, ensuring that a record of such agreement is maintained. Additionally, the Act provides flexibility in the manner of conducting arbitral proceedings, enabling the use of technology for filing statements and procedural documents. The 1996 Act also regulates fast-track procedures, which may incorporate technology use, although it does not mandate such integration. Despite these permissive provisions, any inclusion of technology in arbitration must adhere to the principles of natural justice.

The COVID-19 pandemic lockdown necessitated major arbitration institutions, including the Mumbai Centre for International Arbitration (MCIA) and the Delhi High Court International Arbitration Centre (DHC-IAC), to release protocols regulating virtual hearings. These protocols have reduced the time and expenses traditionally associated with in-person proceedings. The DHC-IAC provides electronic filing for arbitration cases, while the Mumbai Centre for International Arbitration Rules 2016 (MCIA Rules 2016) allows tribunals to determine the manner of conducting proceedings, thereby implying the permissibility of technology use.

Under the 1996 Act, tribunals possess authority to decide matters of jurisdiction, interim measures, and related procedural questions. The application of AI in arbitral decision-making raises significant questions regarding arbitrator impartiality, reasoning capabilities, and accountability. Furthermore, disputing parties should retain the power to determine whether AI or a human arbitrator will be used in their proceedings. A critical concern is how algorithmic AI systems would deploy the principles of natural justice in matters under dispute. The Supreme Court of India has emphasized that both natural justice and fair procedures must be ensured and complied with during all arbitration processes. These compliance requirements raise important questions about how AI systems would implement these fundamental principles in actual arbitral matters.

Challenges and Opportunities

The most evident advantage of integrating AI technology into arbitration is its capacity for high efficiency combined with relatively low operational expenses. AI uses minimal human resources while producing quality results comparable to traditional approaches. The Chartered Institute of Arbitrators (CIARB) has formulated comprehensive guidelines on AI use in arbitration that highlight its advantages in legal research, case analysis, evidence evaluation, authentication, translations, transcriptions, and related functions. However, these same guidelines enumerate significant risks associated with AI deployment, including concerns regarding confidentiality breaches through third-party AI systems, data security vulnerabilities, due process compliance, objective decision-making, lack of transparency (the “black box” problem), award enforceability, and environmental impact stemming from energy consumption.

CIARB provides general recommendations regarding the use of AI in arbitration and advises parties and arbitrators to investigate specific AI tools, including their functions, risks, and benefits. Importantly, the guidelines state that AI use does not diminish participant responsibility or accountability unless otherwise agreed, subject to applicable legal rules. This principle establishes that human accountability must remain central to all arbitral proceedings, regardless of technological integration.

Comparison with China

The China International Economic and Trade Arbitration Commission (CIETAC) released the Provisional Guidelines on the Use of Artificial Intelligence Technology in Arbitration in 2025. These guidelines were formulated in response to the rapid integration of AI into the legal field for analysis, research, and related functions. The CIETAC guidelines revolve around three core principles that emphasize human autonomy and control over arbitral procedures:

  • AI must be used only as an aid and never as a substitute for human judgment
  • AI use does not reduce or eliminate parties’ responsibility in the proceedings
  • Parties retain the right to decide how and whether AI will be used in their specific arbitration process

Beyond these core principles, CIETAC provides specific guidelines for tribunal implementation, including provisions addressing the necessity and extent of AI use in specific cases, reliability assessments of AI tools, law-related considerations, and the importance of expert consultation to understand technological complexities. China’s approach to AI in arbitration systematically protects human autonomy by prohibiting AI from major decision-making functions and maintaining responsibility and accountability with human arbitrators. As India’s use of AI in arbitration continues to develop, adopting the principle of human autonomy and authority over arbitral processes is essential to secure fair and just dispute resolution.

Future Prospects and Conclusion

The use of AI in arbitration must remain limited to preserve and protect human governance over arbitral processes. Such limited and controlled usage of AI must also maintain transparency in all applications and algorithms. Arbitration institutions across multiple jurisdictions have incorporated principles of human governance into their guidelines for AI integration. Notable examples include the Silicon Valley Arbitration & Mediation Centre, the International Council for Commercial Arbitration, and CIARB, all of which prioritize the protection of parties’ rights and human authority in arbitration proceedings.

The necessity of protecting human autonomy in arbitration rests upon fundamental principles including the basic rights of disputing parties, the sensitivity required in individual circumstances, human reasoning capacity, and other factors that algorithmic AI systems cannot adequately comprehend. Therefore, the role of AI in arbitration must be restricted to anything other than decision-making functions, and even then, only with meaningful human oversight.

AI systems are trained on large datasets of information but lack the emotional intelligence and human understanding essential to dispute resolution. The various legal frameworks governing arbitration have been developed to ensure that human judgment does not create bias or discrimination and to protect the rights of all individuals involved. In arbitration, where actual human beings are the parties to disputes, the role of AI in decision-making or the issuance of arbitral awards would be fundamentally detrimental to parties and their rights. Furthermore, reliance on AI systems raises concerns about whether such awards can be reliably enforced and respected across different jurisdictions and legal systems.

India must adopt an AI integration framework similar to that established by China, as this approach would protect basic human oversight and judgment while simultaneously supporting the beneficial inclusion of technology. Such a balanced framework would enhance arbitration efficiency without sacrificing the human elements essential to fair and just dispute resolution.

Table of Cases

  • Vidya Drolia and Ors. v Durga Trading Corporation and Ors. [2020] INSC 697

Table of Legislation

  • The Arbitration and Conciliation Act, 1996

Bibliography

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