Summary
- Russia’s war of aggression against Ukraine has proven to be a breeding ground for arbitral disputes, while introducing significant risks for European companies, lawyers and arbitrators alike.
- As in most industries, AI is playing an ever-expanding role in international arbitration. This development should be cause for both optimism and caution, since efficiency gains from AI must be weighed against the associated risks.
- Arbitrators are being held to greater standards. As social media increases access to arbitrators’ past conduct and personal views, the International Bar Association (IBA) has published new guidelines on managing conflicts of interest. The IBA remains committed to advancing ethnic diversity in international arbitration.
- International and domestic public law obligations are increasingly relevant to corporate operations, and frequently generate or influence arbitral disputes.
Disruptive times fuelling and threatening arbitration
Global disruption has complex and conflicting effects on international arbitration. On the one hand, international arbitration thrives on disruption. In unstable times, swift and impartial resolution of international commercial disputes becomes all the more desirable. On the other hand, international arbitration is not immune from falling victim to that same disruption. Conflict and geopolitical destabilisation undermine the effectiveness of arbitration and may even lead to personal risk to lawyers and arbitrators. These contradictory effects of disruption have been on full display in the Russian war of aggression against Ukraine.
Russian companies have sought to evade international arbitral proceedings by obtaining anti-arbitration injunctions from Russian courts (see our article of 2 January 2025). These injunctions prohibit the other party from initiating proceedings outside Russia and force the parties to the dispute to bring their cases before Russian courts. Meanwhile, European companies have succeeded in obtaining anti-suit injunctions from English courts but, upon receiving threats of Russian fines, have had to get their own injunctions withdrawn (see, for example, UniCredit Bank GmbH v RusChemAlliance LLC [2025] EWCA Civ 99). Most recently, Russia has taken direct action against arbitrators and law firms representing arbitration claimants. Russia’s Prosecutor General sought a EUR 7.5 billion penalty against Wintershall Dea, a German company that had pursued a EUR 7.5 billion claim against Russia under the Energy Charter Treaty. In an extraordinary step, the Prosecutor sought to hold the three appointed arbitrators and the law firm representing Wintershall Dea jointly and severally liable for the penalty.
For those European companies with assets facing execution risk in Russia, or even in third states, this scenario presents a dire dilemma. With significant cases pending, and the geopolitical situation subject to constant change, the disruptive consequences of Russia’s invasion on international arbitration are far from over.
For more information see our podcast: Gleiss Lutz on International Arbitration – Episode 1: Disruptive times fuelling and threatening arbitration
The growing role of artificial intelligence
The rapid development of artificial intelligence (AI) presents both opportunities and challenges for international arbitration. The great promise of AI is its capacity to process vast amounts of data and radically increase the efficiency of certain processes. This technology already plays a role in arbitration, particularly in document review, case management and transcription. That role is set to expand, however.
For example, arbitrator selection is one area in which the use of AI could imminently become commonplace. Given the abundance of qualified arbitrators in 2025, AI could be used to sift through vast quantities of data on arbitrators’ previous decisions, public statements and resumes, potentially enabling a broader and more diverse group of arbitrators to be given due consideration. By way of another example, Three Crowns and Stanford University have developed an “AI-powered cross-examination training platform”. Platforms like this could create opportunities for practitioners to refine their advocacy skills and strategy ahead of significant proceedings.
Yet, where there is great promise, there is also profound risk. The performance of AI is entirely dependent on the data it is trained on. This, amusingly, is known as the garbage-in, garbage-out principle. In arbitrator selection, for example, AI could reflect and even entrench existing biases. Moreover, generic Large Language Models such as ChatGPT are optimised for plausibility and user satisfaction, rather than legal precision. Several US lawyers have learnt this the hard way, incurring fines for the submission of court documents containing “hallucinated” citations (see, most recently, Ellis George and K&L Gates receiving a USD 31,000 sanction). These flaws mean that, among other things, a trustworthy AI arbitral tribunal remains a distant prospect. Nevertheless, efforts are underway to develop automated arbitration.
Given the importance of balancing the good, the bad, and the ugly aspects of AI, the industry is moving to establish best practices. The Silicon Valley Arbitration and Mediation Center (SVAMC), for example, published guidelines on the use of AI in arbitration in April 2024. These guidelines describe best practices for the use of AI while identifying the associated risks. The use of AI in arbitration is also likely to be affected by general AI regulations, such as the EU AI Act. Of course, with the push to regulate AI in arbitration, care should be taken to ensure that any imposed burdens are proportionate. Example: While transparency is a worthy objective, there is clearly no need to disclose the use of spell-check. Drawing such lines is a difficult, but necessary, task for regulators.
For more information see our podcast: Gleiss Lutz on International Arbitration – Episode 2: The role of artificial intelligence in international arbitration
Heightened demands on arbitrators
For good reason, arbitrators are being held to greater standards particularly with regard to independence and impartiality. In 2024, the IBA revised and supplemented its Guidelines on Conflicts of Interest in International Arbitration in order to increase uniformity in the treatment of potential conflicts. The IBA’s actions come amid increasing challenges and annulment requests based on evidence from social media of arbitrators’ past conduct or personal opinions.
The IBA has also recently published an empirical study on ethnic diversity in international arbitration. Despite recent headwinds in the US, the IBA has remained committed to its pursuit of ethnic diversity. As with impartiality standards, this pursuit of diversity objectives contributes to upholding the legitimacy and integrity of the arbitral process.
For more information see our podcast: Gleiss Lutz on International Arbitration – Episode 3: Arbitrator standards
Greater influence of international and domestic public law
In response to climate change and human rights abuses, states are increasingly shifting the burden of prevention directly onto the private sector. Human rights and environmental standards from public international law have been enshrined in domestic statutes that impose monitoring and due diligence obligations on corporate actors (see, for example, the German Supply Chain Act, Lieferkettensorgfaltspflichtengesetz). As such, environmental, social, and governance (ESG) is no longer just a moral obligation for corporations, but a legal one. Likewise, as discussed above, humanitarian crises such as Russia’s invasion of Ukraine force companies to engage directly with public international law through sanctions regimes.
The emergence of these legal obligations has significant ramifications for international arbitration. Tensions can emerge between public and private obligations, such as contractual obligations being rendered unlawful under a sanctions regime. Such scenarios can trigger arbitral disputes. More generally, in tumultuous times like these, arbitration can play an important role in mitigating global challenges by providing structured, predictable and fair dispute resolution procedures.
A comprehensive review of the year 2024 in international arbitration by some of our arbitration experts, along with an outlook for 2025, has been published in Issue 3 of SchiedsVZ 2025. If you have any questions, please do not hesitate to contact us.
For more information see our podcast: Gleiss Lutz on International Arbitration – Episode 4: Public international law
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