Freshfields report: AI set to transform international arbitration
A new study by Freshfields reveals that artificial intelligence technology is poised to revolutionize international arbitration practices, although mounting worries about data protection and openness are driving demands for tighter controls.
The developments shaping arbitration field
In its milestone tenth edition, the 2025 International Arbitration Report identifies a dozen major developments shaping today’s arbitration field. Beyond AI’s dominance, the report examines several other crucial factors: geopolitical dynamics, disputes involving Russian entities, mediation between states and investors, human rights considerations in investment arbitration, and increasing pressure to address ESG matters.
Speaking about the findings, International Arbitration group Co-head Boris Kasolowsky emphasized the intricate challenges businesses face. His counterpart, Noiana Marigo (BOTH PICTURED), echoed this sentiment, stating that their analysis moves beyond mere observations to deliver concrete solutions for companies tackling complex issues.
The integration of AI into arbitration practices stands out as particularly significant, with 2024 witnessing major technological breakthroughs that led to wider adoption among practitioners. However, experts stress the need for proper safeguards to ensure ethical AI implementation.
Politics and arbitration
Political shifts worldwide are expected to heavily influence investment claims. Key developments include Mexico’s proposed judicial system overhaul, the return of the Trump administration in the United States, ongoing Ukrainian conflict, and China’s shifting stance on international trade and investment.
The report also spotlights Russian-related disputes and national courts’ increasing involvement in arbitration matters. Throughout 2024, there was notable growth in court intervention, particularly in cases involving sanctioned Russian entities.
Courts in Britain, Hong Kong, and Germany saw a rise in anti-suit injunctions and declaratory judgments supporting arbitration, with many cases reaching appellate courts. Meanwhile, Russian courts issued counter-measures through anti-arbitration and anti-anti-suit injunctions, a pattern likely to persist through 2025.
The ISDS factor
Mediation is presented as a viable alternative, particularly as traditional investor-state dispute settlement (ISDS) faces increasing criticism over its expensive and time-consuming nature, entrenched positions between governments and businesses, and public interest concerns.
However, these ISDS criticisms aren’t new – the 2020 report discussed reforms that are now being implemented, including the establishment of permanent investment courts in response to widespread dissatisfaction.
