International arbitration: efficiency, enforcement of awards and artificial intelligence among the major challenges today

On 7 October, during the International Bar Association (IBA) Annual Conference in Copenhagen, the panel “Current Issues in International Arbitration”was held to discuss the main issues affecting the practice, procedure and professionals involved in international commercial arbitration.

The session was chaired by Joel Quek, of WongPartnership, Singapore, and featured Sanjeev Kapoor, of Khaitan & Co, New Delhi; Maude Lebois, of GBS Disputes, Paris; Felipe Ossa, of Claro y Cía., Santiago; and Dan Stampe-Terkildsen, of Magnusson, Copenhagen.

One of the main themes of the discussion was the tension between the drive for efficiency and the need to fully respect due process. Expedited proceedings and early dismissal mechanisms can reduce the time and cost of arbitration, but may also limit a party’s ability to present its case or lead to subsequent challenges to the award.

The panellists noted that imprecise drafting of the arbitration clause is often the source of many such disputes. The problem is particularly clear when a contract provides for a three-member tribunal, but the institutional rules allow a sole arbitrator to be appointed in expedited proceedings.

The differing approaches taken by national courts confirm that there is no uniform interpretation. Parties should therefore expressly define in their contracts the composition of the tribunal and the scope of any expedited mechanism.

The risk of ultra petita

Felipe Ossa examined the risk of an arbitral tribunal granting relief that the parties did not seek. As an example, the panellists discussed a Chilean decision that set aside an international award because the tribunal had granted a price reduction that the claimant had not requested.

The case shows that arbitrators must stay within the scope of the parties’ claims. A decision that exceeds that mandate may jeopardise the validity and subsequent enforcement of the award.

The Danish experience reflected a more flexible approach. Courts may consider an issue to have formed part of the debate where its essential elements were set out in the pleadings, even if it was not expressly framed as a separate argument.

Enforcement of set-aside awards

Another central issue was the treatment of awards set aside at the seat of arbitration.

The French approach allows an international award set aside at the seat to be recognised and enforced in France in certain circumstances. This approach is based on the view that an international award does not belong exclusively to the legal system of the country chosen as the seat.

In several Latin American countries, including Brazil, Argentina and Chile, a different view prevails: if an award has been set aside at the seat, the effects of that decision are generally fully recognised.

This divergence makes it necessary to plan enforcement strategy from the earliest stages of a dispute. The location of assets and each jurisdiction’s position on set-aside awards may be as relevant as the choice of seat itself.

India and interim measures

Sanjeev Kapoor explained that India currently takes a pro-enforcement approach to final foreign awards. However, difficulties remain in giving effect to interim measures issued in arbitrations seated outside the country.

In such cases, parties may have to bring proceedings before the Indian courts to obtain equivalent relief. The need to return to the local courts may reduce the practical effectiveness of the protection granted by the arbitral tribunal.

Artificial intelligence: support, not substitution

The panel also examined the use of artificial intelligence in arbitration. Participants agreed that these tools can help organise information, identify relevant issues and locate potential arguments.

However, they warned that AI can produce convincing but incorrect statements. Examples included fabricated testimony, reliance on non-existent legal authorities and summaries presented as if they were verbatim quotations.

The panellists recommended limiting the tools to pre-selected sources, requiring verifiable references and subjecting every output to human review. They also stressed the need for clear terms on confidentiality, data retention and the use of data to train models.

Key takeaways

• Procedural efficiency must not come at the expense of the right to be heard.
• Arbitration clauses should clearly define the composition of the tribunal and the application of expedited procedures.
• An ultra petita decision may lead to the award being set aside or enforcement being refused.
• France takes a more autonomous view of the international award, while several Latin American jurisdictions give priority to the decision of the seat.
• Enforcement strategy should take into account the location of assets from the outset.
• India is favourable to the enforcement of final foreign awards, but interim measures remain difficult to enforce.
• Artificial intelligence can assist counsel or arbitrators, but it does not replace their judgment or professional responsibility.
• Confidentiality, source traceability and human verification are essential.