In the first installment , María Arias Navarro, counsel of the Spanish Court of Arbitration (CEA) and the Madrid International Arbitration Center (CIAM-CIAR) and Legal Director of the Spanish Mediation Center (CEM); Cecilia O'Neill, arbitrator in Lima and Madrid; Benito Zelaya, managing partner of Lexincorp Honduras; Mario Reggiardo, partner at Payet, Rey, Cauvi, Pérez Abogados, conducted a comprehensive analysis of the current arbitration landscape in Latin America, focusing on the countries facing the most claims before the ICSID and the sectors with the highest volume of arbitrations, both commercial and investment-related. The role of arbitration in attracting investment between Latin America and Spain was also discussed with specialists, as was the progress Latin America has made in modernizing its legal frameworks for arbitration, particularly in terms of regulations.
Today, in this second installment, we will explore how arbitration has become a crucial mechanism for resolving disputes and fostering a favorable environment for foreign investment in the region. We will also delve into the growing relevance of AI and international arbitration, address the challenges the arbitration community will face in the coming years, and examine the progress made in women's representation within this field.
AI and its relevance in international arbitration
The debate was opened by María Arias Navarro, who stated that the relationship between AI and international arbitration is a complex and increasingly relevant topic in the legal field. As AI continues to transform various industries, its impact on international arbitration is becoming ever more evident. “The emergence of AI is significantly transforming the way arbitration proceedings are conducted.
A notable milestone in this regard is the Draft Guidelines on the Use of Artificial Intelligence in International Arbitration, published by the Silicon Valley Arbitration and Mediation Center (SVAMC) in August 2023 for public comment. These guidelines represent an important step toward regulating AI in this area by establishing standards for parties, their legal representatives, and arbitrators, differentiating between compliant and non-compliant use of AI.
For its part, the Artificial Intelligence Law for 2024, approved by the European Parliament on March 22, presents relevant aspects that must be considered in Private International Law and in the resolution of conflicts through international arbitration.
In this context, the imperative need arises to address the regulation of AI in international arbitration. While arbitral institutions and international bodies, such as the IBA and UNCITRAL, are called upon to propose specific rules to address this issue, it is essential that international arbitration not remain inactive while awaiting broader regulations. The growing influence of AI entails a significant responsibility for arbitral institutions, which must respond to the demands for oversight and regulation that arise in this context.
Cecilia O'Neill agreed that the relationship between artificial intelligence (AI) and international arbitration is expanding. AI is being used to improve efficiency in case management, predict outcomes, and automate certain administrative processes. AI tools are assisting in document review and identifying patterns in large volumes of data, thus accelerating the arbitration process. However, there are ethical and privacy challenges that must be addressed, especially regarding impartiality and transparency in the use of these technologies.
Benito Zelaya believes that artificial intelligence is causing a revolution in international arbitration, transforming both the administration of the process and the resolution of disputes. “Generally speaking, AI offers a number of benefits that are redefining arbitral practice.
First, AI's ability to analyze large volumes of data and documents is accelerating and supporting case reviews. Advanced tools enable faster and more accurate evidence review, which not only reduces associated time and costs but also improves the effectiveness of the analysis. Furthermore, automating repetitive and administrative tasks frees arbitrators and lawyers to focus on more complex and strategic issues.
However, integrating AI into arbitration is not without its challenges. The technology raises questions about ethics and accountability, particularly regarding transparency in the use of these tools and the balance between automation and human judgment.
Therefore, AI is driving international arbitration toward a more efficient, accurate, and transparent future. As the technology continues to advance, its role in dispute resolution will likely continue to expand, offering new opportunities to improve arbitration practice worldwide.
Mario Reggiardo said that there isn't widespread use of AI in international arbitration yet, but that we're getting there. "Potential uses of AI are being explored, including drafting memorials, searching for case law, and even replacing arbitrators."
Current uses include selecting case law with Jurimetría, selecting arbitrators in AIQ, and evaluating witnesses in Advokate. It is also interesting how the Colombian Superintendency of Companies implemented the Siarelis Robot for resolving corporate disputes.
Among the potential risks that can arise from the use of AI is the lack of transparency in the processes used by AI generators to reach their conclusions. They do not explain how they arrived at the result, making it difficult for the opposing party to challenge the conclusions since they do not know how they were formed. It also makes it difficult for the arbitrator to assess the evidence presented. Due to the lack of transparency regarding the origin of the answer, the tool may be unreliable.
The information provided by AI is also criticized for being biased and, in some cases, insufficient. Any information provided through AI must be verified. The effectiveness of AI is limited to the quality of the data it possesses. The data it processes may be insufficient if it does not access confidential, unknown, or unapproved documents for uploading to a platform. For this reason, in 2023, some lawyers were fined after using Chat GPT to present case law that the tool had generated from nonexistent cases.
There are also concerns regarding confidentiality and data protection, as it could be questioned who will have access to the data and for what purpose. Last year, Samsung employees also breached confidentiality by using ChatGPT to troubleshoot internal technical issues. They shared sensitive source code without authorization to develop a new program. This transferred that confidential data to ChatGPT, where it can now be accessed by anyone.
We are in a trial-and-error process that could lead to benefits such as lightening the workload and complementing existing work. Implementing AI in arbitration can reduce the workload of arbitrators and lawyers by automating document review and the organization of relevant information. This technology not only complements human work but also optimizes available time, allowing professionals to focus on strategic and analytical aspects of the case.
AI in arbitration can also contribute to cost savings by reducing the need for large teams to perform tasks that can be automated. Furthermore, improving the predictability of arbitration can facilitate settlements that avoid arbitration costs.
AI can support strategy development by providing detailed analyses of precedents, patterns, and potential outcomes. This analytical capability allows lawyers to develop more informed approaches, increasing the likelihood of success. By integrating data and trends, AI helps anticipate scenarios and design strategies that are better aligned with the realities of the case, thereby strengthening the parties' positions.
The main initiative from the legal community in recent years regarding AI and arbitration has been the “Guidelines on the Use of Artificial Intelligence in Arbitration” from the Silicon Valley Arbitration and Mediation Center. Published in April of this year, it compiles opinions and recommendations from lawyers and arbitrators internationally to provide guidance to both parties and arbitrators on the use of AI.
Adapting to technological changes: a major challenge for arbitration in the coming years
Adapting to technological changes is one of the main challenges arbitration will face in the coming years. As technology advances at a rapid pace, it is essential that arbitration professionals stay up-to-date and adopt innovative tools that optimize their processes and improve the efficiency of their procedures.
This challenge not only involves the incorporation of new technologies, but also the continuous training of referees and the parties involved, thus ensuring that everyone is prepared to take full advantage of the opportunities offered by digitalization.
In this context, and in the opinion of María Arias Navarro, three of the major challenges that the arbitration community will have to face are AI and the metaverse; international climate law; and diversity broadly considered.
“AI and the metaverse are disruptive technologies poised to become increasingly prevalent in international arbitration. Their combination will revolutionize the parameters of the business world. The global metaverse market is expected to reach €750 million by 2026, representing a tremendous opportunity for international arbitration. These technologies offer significant opportunities for the development of international arbitration. These opportunities, of course, also entail risks; therefore, how to approach their use will be one of the main challenges for the arbitration community.”
Regarding international climate law, conflicts arising from or related to the effects of climate change and new environmental policies will continue to grow in the coming years, particularly those directed against states seeking to induce legislative reforms aimed at combating climate change. Similarly, the energy transition process will bring new risk profiles for green energy projects worldwide.
Furthermore, the unequal position that will result from the EU's withdrawal from the Energy Charter Treaty (ECT) between intra-EU and non-EU investors, and the effects of the sunset clause, will have significant implications for international arbitration, the full scope of which we will begin to see in the coming year. Moreover, arbitration must not only contribute to mitigating the impact of global climate change in a substantive way, but it must also be a benchmark in adapting its practices and protocols to the ambitious goal of net-zero greenhouse gas emissions. In this regard, the Green Pledge, launched in 2019 as an initiative to reduce the environmental impact of international arbitrations, has gained particular relevance.
Finally, there is much room for improvement in all aspects of diversity, not only in terms of gender but also geographic, racial, and age diversity. The arbitration community is undertaking initiatives to address diversity goals. In this regard, it is worth mentioning the ERA Pledge, which has established subcommittees focused on promoting women arbitrators from diverse racial and ethnic backgrounds, including Africa, Asia, the Middle East, and Latin America, and the GAR Pledge Award, which, in 2022, expanded to recognize and celebrate diversity initiatives that transcend gender.
At CEA and CIAM-CIAR, we make continuous efforts to implement the most demanding practices in equality and diversity, and for this reason we have joined the international initiative Equal Representation in Arbitration (ERA Pledge), whose general objective is to improve the profile of women arbitrators and increase their representation, and the CEIA-CINDA Commitment to the Inclusion of Disability in Arbitration, in order to promote and facilitate the incorporation of people with disabilities.We are committed to the inclusion of people with disabilities in arbitration, without discrimination of any kind, and to eliminating all physical barriers to facilitate their full participation. We also have a collaboration agreement with Women Way in Arbitration (WWA) LATAM, with the aim, among others, of promoting recognition, equitable treatment, and equal opportunities for women in the development of the various professional roles related to arbitration.
Notwithstanding the foregoing, it is true that these initiatives are insufficient and that diversity is one of the major challenges facing international arbitration if we want it to be perceived as a fair mechanism adapted to the 21st century."
Cecilia O'Neill also believes that the main challenges for arbitration in the coming years include adapting to technological changes, improving the accessibility and efficiency of the process, and addressing growing concerns about transparency and impartiality. Additionally, “there are other problems that must be solved to improve the accessibility of arbitration and the quality of the proceedings. These include the rising cost of proceedings, the litigiousness of lawyers, which prolongs arbitration, and the various conflicts of interest that arise concerning arbitrators.”
Benito Zelaya points out that, in the coming years, international arbitration will face several significant challenges that reflect both global changes and internal evolutions in arbitration practice.
These challenges will include:
- Geopolitics, Economic Tensions, and Legislative Changes : International disputes stemming from geopolitical conflicts, such as the war between Russia and Ukraine, and trade tensions between the United States and China, will continue to affect the arbitration landscape. These situations generate an increase in arbitration claims, especially in sensitive sectors such as energy and raw materials. Likewise, legislative changes in Latin American countries will continue to generate investment arbitrations before the ICSID.
- Technology and AI : The integration of advanced technologies, including artificial intelligence, presents both opportunities and challenges. While these technologies can improve the efficiency and accessibility of arbitration, they also raise questions about data security, fairness in access to technology, and the ability of arbitrators to handle complex technical issues.
- Climate Change and ESG (Environmental, Social, and Governance) : The growing importance of environmental, social, and governance issues is creating new areas of dispute. Companies must adapt to changing regulations and expectations, and controversies related to climate change and sustainable practices are on the rise. This requires arbitration professionals to be well-informed and prepared to handle these new dynamics.
To the above, Mario Reggiardo added that “the challenge is to reduce three situations: corruption in domestic arbitration, conflicts of interest through greater transparency, and the costs generated by the excessive use of resources in international arbitration. The use of artificial intelligence is something we will also begin to see in arbitration practice.”
Female participation in the refereeing community remains insufficient
María Arias Navarro began her speech by noting that “women’s social progress in all areas is evident, but despite the apparent equality of opportunity between men and women, obstacles still exist that hinder effective equality. The refereeing community is no stranger to this reality,” she said.
According to the lawyer and arbitrator, the presence of women in arbitration practice has experienced remarkable progress in recent decades, both domestically and internationally.
“Fortunately, it is no longer unusual for a woman to preside over an arbitral tribunal, act as an arbitrator in a single-judge tribunal, or hold important positions on the governing bodies of arbitral institutions. Nevertheless, the fact remains that women are still underrepresented in this sector, and there is still a long way to go to achieve gender parity globally. The impact of unconscious bias, the existing difficulties in retaining women in the legal profession, and the lack of information about qualified female candidates are some of the barriers that hinder women's access to arbitral tribunals.”
In any case, it is necessary to recognize and celebrate the efforts of arbitral institutions in general and organizations such as the ERA Pledge, Arbitral Women, WWA LATAM, or CEIA Mujeres, which fight every day to shorten the path to achieving effective equality in all its facets.
In this regard, I always like to highlight that the Spanish Court of Arbitration (CEA) was the first Spanish arbitration institution to be chaired by a woman and has one of the highest rates of female representation in its governing bodies: 40%. Although there is still a way to go, we are also very proud of the effort made to implement the best and most demanding practices in gender equality.”
Meanwhile, Cecilia O'Neill explained that while the presence of women in arbitration has improved in recent years, it still faces challenges. “Although there has been an increase in the number of female arbitrators and lawyers in the field of arbitration, statistics still show unequal representation compared to their male colleagues. For example, in 2023, the confirmation and appointment of female arbitrators represented 29.7% of the total. While this is an improvement compared to the 2022 figure, there is still a noticeably higher participation of men. In response, initiatives to promote gender equality, such as women's arbitration networks and mentoring programs, are helping to increase the visibility and opportunities for women in this area.”
Benito Zelaya agreed with his colleagues that while women's presence in arbitration has made significant progress, there is still a long way to go. “We are seeing more women taking on leadership roles in arbitration, from referees to dispute resolution experts. This growth is the result of collective effort and global initiatives that promote the active participation of women in arbitration, which have been crucial in opening doors and promoting equality in a field historically dominated by men.”
The International Chamber of Commerce reports, in its most recent annual report of 2023, that, in Latin America, female participation in arbitration panels is approximately 28%, indicating a growing trend towards greater female inclusion in arbitration.
Finally, Mario Reggiardo asserts that the trend is steadily increasing. “In the last 20 years, Latin America has gone from an area where female presence was marginal and exceptional to having female lawyers and arbitrators in positions of leadership, prestige, and influence. It is no longer unusual to see all-female teams of lawyers or arbitration tribunals composed entirely of women. However, machismo still exists in the region, leading some lawyers or clients, for example, to admire or even question situations where women are in the majority of arbitrators.”
