Author: Kusum Verma, IMS Law College
To the point
Arbitration is the favoured form of Alternative Dispute Resolution (ADR), and artificial intelligence (Al) is changing the legal landscape. Al-powered arbitration (sometimes known as “robo-arbitration”) is being explored all around the world with the promise of less delays, lower costs, and increased efficiency. But the essential query still stands: Will Al ever be able to completely replace human arbitrators in India’s legal system? The scope, difficulties, and prospects of Al-based arbitration in India are examined in this paper, which advocates for a hybrid model in which technology supports but does not control the decision-making process.
LEGAL JARGON
Arbitration a private judicial procedure in which a disagreement is settled out of court by an impartial third party (arbitrator). Artificial intelligence, or Al technology that makes predictions or choices by simulating human intellect. Automated Arbitration Dispute resolution in which Al performs or supports arbitration, frequently without the need for direct human intervention ADR, or alternative dispute resolution
Arbitration, mediation, conciliation, and other legal procedures are used to settle disputes outside of the conventional court system. Due Process the mandate that all parties be treated equally under the law.
Al’s Black-Box All systems that do not allow users to see or understand their internal decision-making process. Model Hybrid A system that combines human monitoring and decision-making with Al efficiency.
The proof
Traditional Arbitration Delay: According to NITI Aayog (2019), the majority of arbitrations in India still take more than three years, even though they are an ADR
Approach. 2. Al Success Abroad: Al-human cooperation helps the EU’s ODR systems effectively handle consumer complaints, while Al courts in China have used Al instruments to settle 3.1 million cases. 3.
India’s Adoption of Al: The Supreme Court’s SUPACE tool demonstrates India’s willingness to consider Al while making judicial decisions. 4. Cost-Effectiveness: Al can save arbitration expenses by 30-50%, which makes it feasible for both individual litigants and small enterprises.Current Use Cases: Al is already used for arbitration activities like scheduling and document sorting by Indian platforms like
Sama and Presolv360. 6. Legal Framework
Support: Al can strengthen institutional arbitration, which is encouraged by the Arbitration and Conciliation Act of 1996, particularly the modification made in 2019.
7. Accuracy and Consistency: Al technologies that provide data-driven objective conclusions, such as CARA AI and Lex Machina, exhibit over 90% accuracy.
ABSTRACT
Abstraction With an emphasis on India’s arbitration ecosystem, this study critically investigates the rise of Al-powered arbitration as a cutting-edge method of resolving disputes. It examines the ways in which countries such as China, Estonia, and the UK are experimenting with technology in arbitration and identifies lessons or things India may do differently. Even if Al technologies have many advantages, like automation, speed, and cost savings, there are still issues with prejudice, transparency, and a lack of human empathy. The article’s conclusion is that the best approach for digital automation, particularly in delicate situations, is a hybrid model that embraces technology while maintaining the human aspect. This approach may jeopardise justice, fairness, and legal validity.
Case law
Durga Trading Corporation v. Vidya Drolia, 2021) 2 SCC 1 Held: The rules of natural justice and fair hearing must be followed in arbitration.
Relevance: If parties fail to comprehend or contest Al’s logic, complete automation in arbitration may be a violation of these rules
Vedanta Aluminium Ltd. V. Trimex International FZE, (2010) 3 SCC 1 Held:Arbitration procedures and agreements must be freely chosen and expressly accepted. Relevance: It may cast doubt on the validity of consent if parties are not fully informed about AI- based proceeding.
Consultancy Services by Tata v. Andhra Pradesh State, 2005 1 SCC 308 Held: Software was acknowledged as “goods,” demonstrating the legal recognition of technology instruments in business operations. Relevance: Makes it possible for Al tools to be legally recognised in commercial and legal settings, including arbitration.
Conclusion
Al-powered arbitration raises significant issues even if it provides appealing answers to India’s overworked court system, including speed, cost-effectiveness, and consistency. These include a lack of human empathy, algorithmic bias, accountability, and transparency. Instead of replacing human arbitrators, India should develop a hybrid dispute resolution approach in which human arbitrators maintain ultimate authority, particularly in delicate or high-stakes cases, while Al tools facilitate and support arbitration. Tech-assisted justice, not tech-dominated justice, must be the aim.
FAQS
1.Does India allow Al arbitration? As of yet, no particular law exists. However, parties may consent to tech-based solutions as long as due procedure is observed because India’s Arbitration and Conciliation Act, 1996, permits party autonomy.
2.. Can Al completely take the position of Indian arbitrators? No, Al lacks moral reasoning, empathy, and contextual judgement. It can currently support human arbitrators but not take their place .
3.What is the future course of action for India?
India ought to: Use a hybrid approach that blends human oversight with Al efficiency.
Create legal protections for Al’s use. Make sure Al’s tools are equitable and comprehensible. Pilot Al is used in straightforward or routine situations rather than delicate or complicated ones.
4.What advantages does Al have in arbitration?
Quicker resolution of disputes Reduced expenses Reduced human error in everyday tasks Reliability in comparable situations
