Technology in the Field of Arbitration

It ensures hassle-free work by ensuring the speedy completion of projects. It allows large-scale information storage with the insurance that the data is well protected. Technology has increased productivity in all sectors of the economy. There are innumerable instances where technology has helped in enhancing the quality of work and led to an increase in efficiency.

Technology and Law

The ill effects of technology were soon understood when technology started being used for malafide purposes. Laws were established to regulate the proper utilization of technology. For example, the IT Act of 2000 is the law that creates a legal framework for electronic records and other e-sources. The IPC punishes those accused of cybercrime. Law ensures the positive utilization of technology. On the other hand, technology enhances the scope and extent of the law.

The legal field consists of innumerable paperwork. Using paper as a mode of legal work entails a lot of disadvantages. Over time the papers are lost, and the result is that important evidence and documents are lost.

International arbitration is a field of law where the subjects in disputes are nations. The loss of paperwork would result in a great loss to the entire nation. Therefore in recent times, the seats of dispute resolution through international standards of arbitration try to inculcate IT in the process of arbitration, thus ensuring greater efficiency and safety regarding the storage of such information.

Technology and Arbitration

“Computers, since their early development after World War II following Alan Turing´s work, have gradually changed the way we approach law, the way we practice it, the way we do business and, at the crossroad of these trends, computers have begun to change the way we resolve disputes. Setting up arbitration procedures that rely heavily on (IT) is in this regard not a spontaneous innovation, but merely a logical next step in the history of how computers penetrate the law. It simply follows the movement started some 20 years ago with the arrival of computers in offices.”[1]

“New technologies such as Big Data, blockchain, machine learning, and text-mining have made it to the legal world, simplifying all phases of the dispute resolution process. Arbitration and these new technologies share a mutually beneficial relationship.”

On the one hand, new technologies will improve efficiency, cut costs, promote the expansion of arbitration into new market segments, and improve client outcomes. On the other hand, the proliferation of new technologies will inevitably generate disputes that arbitration is best suited to resolve. For example, although self-execution limits certain litigation risks concerning the performance of smart contracts, conflicts regarding their definition, interpretation, and general framework are likely to arise.

The delocalized nature of the arbitral regime, the flexibility of proceedings, and the straightforward enforcement of awards are key features that make arbitration the optimal dispute resolution mechanism for new technology disputes. New technologies can thus reinforce arbitral proceedings, and arbitration can provide insurance to these emerging practices – these reciprocal benefits should be exploited.”[2]

ICCs Report on Information Technology in Arbitration

“In international arbitration, the use of IT can include, for example,

1. email and other electronic communications between and among the parties, the arbitrator or arbitrators (the “tribunal”), and the administering body;
2. storage of information for access by the parties and the tribunal using portable or fixed storage media (e.g. flash drives, DVDs, hard drives, and cloud-based storage);
3. software and media used to present the parties’ respective cases in an electronic format rather than a paper format; and
4. hearing room technologies (e.g. videoconferencing, multimedia presentations, translations, and “real-time” electronic transcripts).

When used – and especially when used effectively – IT can help the parties in international arbitration to save time and costs and to ensure that the arbitration is managed and conducted efficiently. On the other hand, if poorly managed, IT can increase time and costs, or – in the worst case – even result in unfair treatment of a party.”[3]

The above excerpt is a part of the report the “Information Technology in International Arbitration- Report of the ICC Commission on Arbitration and ADR” of the International Chambers of Commerce, which is one of the nodal bodies of international arbitration in which it has considered the importance of technology to increase the efficiency of the developing ADR system. the ICC has been very active in the inclusion of technology in the field of
ADR.

In 2004 the International Chamber of Commerce constituted a Task Force on the Use of Information Technology in International Arbitration. According to the reports given by the ICC, the technology used in arbitration has increased successively.

The ICC in its report mentions that predominantly there were changes in the style and format of international arbitration that had drastically changed with the inclusion of technological advancement. The communication is conveyed through an electronic format. PDF is generally used for written submissions.[4]

According to the countries with time, focus on the increasing safety of the information shared over digital spaces. Some of the features focused on by the parties to a dispute are as follows “a secure, confidential, flexible online “virtual data room” (e.g. a dedicated online file repository) with complex additional functionalities where the parties, arbitrators, and (if involved) arbitral institution could access all pleadings, correspondence, and other submissions continuously and in real-time, much as the ICC envisioned when it launched its innovative case management product, “NetCase”, in 2005”[5]

The ICC endeavours to ensure constant checks over the security of the content that the parties share through the arbitration platforms also in a manner suitable to all the economic and location-related considerations of the countries.

The ICC, through the report, had made guidelines for the use of IT in the field of international arbitration, which includes both parties agreeing to use IT during the time of the proceedings, the roles played by the organizations involved in the arbitration in the use of IT, the rules regarding the sharing of sensitive data through digital platforms and solution to other relevant IT-related problems that may arise at the time of the use of technology during the arbitration.

Different organization has different standards for the use of technology in the field of arbitration like the AAA require the parties to explicitly mention that they agree to use the said technology in the arbitration process.

As the arbitration process becomes more formal and complex and its scope increases, technology use and requirement in the arbitration sphere increase.

“Three ways of interaction between arbitration and technology are distinguished here. The first one is the most comprehensible, i.e. whereby parties and arbitrators make use of technology, e.g.online, and electronic tools, in support of the procedure. Costs and time are saved by communicating solely by way of email and filing submissions and exhibits on an online platform or ‘dropbox’, the access to which is provided by the arbitral institution or the arbitrator.

The second interaction is in full development: the creation and use of Online Dispute Resolution (ODR) platforms to facilitate dispute resolution. the third way that technology will interact with the arbitration i.e. the ever-growing science of artificial intelligence.

Data mining is gradually finding its way into the field of law. Systems exist whereby case law and doctrine are selected out of huge databases to generate a first opinion on a question of law. And just around the corner are systems that learn and therefore create such opinions to solve legal issues.”[6]

An important message titled “Algocracy in Arbitration”, was given by Ms. Sophie Nappert in “The present and near future of new technologies in arbitration” (by the Club Español de Arbitraje, Belgium Chapter (“CEA”)on 23 February 2018), who has been vocal about the impact of new technologies on arbitration. She explained that the term (“autocracy) was a derivative of “algorithm” and “democracy”. Ms. Nappert explained the developments in the field of artificial intelligence (“AI”), which, together with the internet, has created a democratic playing field for humans to operate and interact with technology. [7]

The use of IT has several positive implications. The workforce will reduce; the fallibility of the workforce will thus reduce. The decisions made by humans are extremely subjective. Humans tend to be influenced by their subjective observation of a particular situation. In this instance, using algorithms and, thus, IT would reduce the scope of the fallibility of the decisions taken by humans. Furthermore, using technology such as email and Dropbox facilitates the speedy arbitration process.

With the use of Video Conferencing techniques, the parties do not even need to be present at a place of arbitration. The decisions made and the arbitral awards given would be made available to the public, facilitating the proper dissemination of information.

Specifically, in the field of International Commercial Arbitration, the fast communication of information would mean that the business decisions which are at stake would be taken. With the use of technology, there will be no requirement of a place that would be the central depository of documents. The parties, at their individual countries, can easily access information and any document that is required.

This would not only save time but also will be economical. Communication is a major issue in a dispute where the countries are a party. The problem of communication is reduced when technology. The communication of information is fast and economical. Furthermore, in choosing an arbitrator, technology can be of special benefit. An algorithm should be fashioned so that the system chooses the correct arbitrator for the case. This facilitates neutrality which is one of the important factors affecting ADR.

Problems of using Technology in the field of Arbitration

There are many problems with the use of technology in arbitration, but the starkest is the imbalance in the availability of technical resources to all the nations Particularly in international matters, the parties may not have equal ability to exploit the technology in question. They may have unequal financial resources to deploy it, they may have unequal access to it, or they may have significantly unequal experience using it.[8]

Although information technology has become fairly commonplace in today’s business world, parties in arbitration may have differing financial or technical resources or technical “competencies,” which may affect their access to or ability to use a particular IT application, IT applications may be used in ways that are inherently unfair [9].

In addition to all the above, there is always a risk of information leakage when technology is concerned. The increase in cybercrime is evidence of the fact that crime related to cyberspace is on the increase. The risk is even more pronounced when sensitive information about countries is at stake. These cybersecurity threats are a major reason that nations must think before agreeing on an issue related to using high-tech and non-conventional methods of proceedings.

In this contemporary world, countries still prefer using conventional methods of proceeding than exploiting the available technology. There are several reasons behind this. The most prominent ones are the lack of awareness of the benefits of technology, the dearth of efficient training regarding modern technology and the fear of the mishandling of sensitive information.

“Many practitioners are reluctant to use IT in arbitration. Because arbitration is a quasi-judicial process, it must comply with procedural guarantees, which impose certain constraints on the process. In addition, in the last two decades, arbitration has evolved towards an increasingly formalistic, court-like procedure, which is often very antagonistic. Hence, parties and arbitrators fear that resorting to IT may jeopardize procedural rights and create grounds for useless procedural complications or even annulment of arbitral awards.”[10]

The pros and cons of technology have to be considered and used effectively for the betterment of the scope and the process of international arbitration. Proper guidelines on the use of technology with effective sanctioning power would be a proper way to deal with the problems of arbitration on the international stage.

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[1] Kohler, Gabrielle Kaufmann, and Thomas Schultz. “ The Use of Information Technology in Arbitration.” Jusletter5 Dec. 2005.

[2] Gauthier Vannieuwenhuyse, ‘Arbitration and New Technologies: Mutual Benefits’ (2018) 35 Journal of International Arbitration, Issue 1, pp. 119–12, Available Here

[3]“Information Technology in International Arbitration- Report of the ICC Commission on Arbitration and ADR – ICC – International Chamber of Commerce.” ICC, Available Here

[4] information Technology in International Arbitration- Report of the ICC Commission on Arbitration and ADR, Available here

[5] “Information Technology in International Arbitration- Report of the ICC Commission on Arbitration and ADR – ICC – International Chamber of Commerce.” ICC, Available Here

[6] Piers, Maud, and Christian Aschauer. Arbitration in the Digital Age: the Brave New World of Arbitration. Cambridge University Press, 2018.

[7] Pratyush Panjwani, Anne-Sophie Gidoin, and Danilo Ruggero Di Bella. “The Present and Near Future of New Technologies in Arbitration: If Not Us, Who? If Not Now, When?” Kluwer Arbitration Blog, 27 Apr. 2018, Available Here

[8] Halket, Thomas D. “The use of technology in arbitration: ensuring the future is available to both the parties .” 6 Apr. 2007.

[9] Halket, Thomas D. “Using Information Technology in Arbitration.” GPSolo, vol. 32, no. 1, 2015, pp. 44–47., Available Here

[10]Kohler, Gabrielle Kaufmann, and Thomas Schultz. “ The Use of Information Technology in Arbitration.” Jusletter5 Dec. 2005.

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