Summary
- The normalisation of AI use in everyday life raises fundamental questions with regard to human surveillance for both lawyers and arbitrators. On top of that, technological innovation increasingly questions the need for human arbitrators. While digital pro-gress evolves rapidly, clear-cut rules for its handling are still absent.
- The rising number of geopolitical conflicts, disrupting international supply chains, puts pressure on contractual risk allocations. At the same time, countries’ mutual imposition of sanctions and counter-measures following Russia’s invasion of Ukraine challenges the functioning of international arbitration.
- The CJEU’s Seraing judgement has deepened the tensions between EU law and inter-national arbitration, thus recalibrating the role of arbitration autonomy.
- Numerous countries and arbitration institutions significantly reformed their arbitration laws in 2025 and 2026. Exposed to increasing competition, the overall spirit is to in-crease speed, digital-friendliness and transparency.
The normalisation of artificial intelligence
The role of AI in practice has rapidly shifted from an experimental to an everyday tool, with 92% of practitioners using AI for presumed cost, time and precision benefits, a Wolters Kluwer study reveals. In line with this development, the essential question is no longer if AI is reliable, but how to manage the well-known AI risks. The ethical debate centres around the tendency to rely on convincingly presented AI output without critically assessing its content (“epistemic defence”). National courts increasingly consider the dan-gers of such nonreflective AI use. In Ayinde v. The London Borough, for example, the English High Court recently highlighted lawyers’ professional duty to verify the accuracy of AI output. And US lawyers, including prestigious law firms, suffer rising sanctions for quoting hallucinated authorities, in addition to the reputational damage.
Parallel to rising AI use by lawyers, AI systems increasingly simulate the role of the arbi-trator. A landmark event in this regard was the introduction of the “AI Arbitrator” by AAA-ICDR in November 2025. The tool can evaluate the merits of claims, generate ex-plainable recommendations and draft arbitral awards. Even though the use of the “AI Ar-bitrator” is currently restricted to very specific scenarios in construction arbitration, its ad-vantages are significant: it speeded up proceedings by 20-25% and reduced costs by 35-45%. Another AI tool by AAA, the “Resolution Simulator”, followed in March 2026. The programme provides parties with a simulated arbitral award, thus enabling parties to better calculate their prospects of success. Tools like these are expected to raise the parties’ will-ingness to settle by confronting them with a realistic evaluation of their case.
Landmark court decisions on the use of AI by arbitrators are still rare. The most prominent case in this field, LaPaglia v. Valve Corp., resulted in a dismissal of action due to lack of jurisdiction in December 2025. Hence, the underlying question whether undisclosed use of AI can justify the setting aside of an arbitral award remained unanswered. Then, in April 2026, however, a Canadian court set aside an arbitral award because the single arbi-trator had allegedly delegated his decision-making to AI, thus not complying with the agreed arbitral process. Essential parts of the award are said to have referred to hallucinat-ed authorities.
Regulation of AI-related subjects such as provability and utilization limits remains frag-mented. In this context, VIAC published a “Note on the Use of Artificial Intelligence in Arbitration Proceedings” in April 2025. Meanwhile, the number of open questions relating to AI use continues to grow. Agentic AI, AI-generated evidence (deepfakes) and the im-plications of unequal access to AI tools for the equality of arms are just some of the many unsolved issues to be addressed.
For more information see our podcast: Gleiss Lutz on International Arbitration – Season 2 | Episode 1: Artificial Intelligence in International Arbitration: A 2026 Update
The impact of geopolitical conflicts
The growing list of geopolitical conflicts continues to significantly affect international ar-bitration. In this context, contract clauses which seek to anticipate and settle large-scale disruptions gain relevance. Scenarios like, most recently, the closure of the Strait of Hor-muz interrupt international supply chains and impact the contractual equilibrium of obliga-tions, thus raising questions of risk allocation. Particularly with regard to force majeure clauses, one further difficulty lies in a suitable definition of predictability at a time when events previously regarded as unforeseeable are accumulating.
The consequences of Russia’s military aggression against Ukraine remain a concern for arbitration as well. Western parties seek to enforce arbitral awards against Russian parties outside Russia while Russian courts regularly order foreign claimants to discontinue arbi-tration proceedings and impose very significant fines in case of non-compliance. Vice ver-sa, Russia tries to enforce Russian judgements and arbitral awards outside so-called “un-friendly states”. Meanwhile, western sanctions produce ever more legal ramifications. Re-cently, because of the sanctions, Germany was sued on the basis of its Bilateral Investment Treaty with Russia (as the successor state of the USSR). A billionaire sued Canada in an ICSID arbitration because sanctions were enforced against him although he had renounced his Russian citizenship. And the Swiss Federal Tribunal did not permit an Angolan dia-mond mine operator to enforce an LCIA arbitral award against a western European party because the mine operator is controlled by a Russian company. In parallel, the number of sanctions keeps growing, with some measures from the EU’s 20th sanctions package di-rectly addressing international arbitration. Two of these measures stand out. First, authori-ties are allowed to release frozen funds to satisfy adverse cost awards where the sanc-tioned party itself commenced arbitration. Second, EU companies are enabled to seek damages in EU courts when they are targeted by Russian proceedings asserting extraterri-torial jurisdiction.
Rising tensions between EU law and arbitration autonomy
The CJEU’s Seraing judgement of 1st August 2025 (C-600/23) has deepened conflicts be-tween EU law and international arbitration. The court held that national courts must not treat as binding arbitral awards by the Court of Arbitration for Sport (CAS) if EU law is af-fected and if the award’s compliance with EU law could not previously be assessed. Thus, the CJEU extended its control over international arbitration. The Seraing judgement was heavily criticized, among others by the Swiss Federal Tribunal which accused the CJEU of leading “a crusade” against international arbitration.
A preliminary ruling procedure which is still pending before the CJEU centers around the question whether EU sanctions also prohibit the reimbursement of prepayments made by Russian companies, even if the contractual delivery has not taken place. German Higher Regional Courts previously held that such prepayments violate EU law.
On a more conciliatory note, the Council of the EU has meanwhile agreed to ratify the UN Mauritius Convention on transparency for ISDS.
Reforms in arbitration
2025 and 2026 have seen numerous reforms in arbitration law, with regard to both nation-al law and rules of international arbitration institutions. The high number of reforming countries and institutions makes it necessary to concentrate on a few examples here. The common tendency, however, is to increase speed of arbitral proceedings and to raise pre-dictability of outcomes.
Among the reforming countries, Germany has published a draft bill to significantly amend its arbitration law by modernizing and aligning it with international standards. The draft fosters digitalization by easing form requirements and allowing digital oral hearings. Fur-thermore, it seeks to enable the publication of (anonymized or pseudonymized) arbitral awards, dissenting opinions, the enforcement of interim measures from foreign arbitral tri-bunals, the setting aside of a procedural award where the tribunal wrongly denied jurisdic-tion and (in principle) arbitration-related court proceedings in English.
While Germany has not gone beyond the stage of a draft, the UK has already passed its Arbitration Act in 2025. Among other changes, the reform imposed a new statutory dis-closure duty for arbitrators, allows for summary awards disposing of issues with no real prospect of success and introduces a new default rule in favor of the law of the seat for the law governing the arbitration agreement.
Among the arbitral institutions, the SIAC, the KCAB, the ICC and the AIAC all presented their new arbitration rules in 2025 and 2026. Their reforms all put a heavy focus on streamlined, fast track and highly expedited arbitral proceedings, but differ with regard to the applicable thresholds.
Forward
