From Algorithms to Arbitration: AI-Based Judgments, Corporate Law, and the Future of Dispute Resolution Under Free Trade Agreements
Keywords:
Investor-State Dispute Settlement, Procedural Fairness, Algorithmic Accountability, Digital Adjudication, International Arbitration, Treaty Interpretation, Legal Automation, Transparency In Decision-Making, Cross-Border Investment DisputesAbstract
The increasing incorporation of artificial intelligence AI into legal decision-making is reshaping the landscape of corporate dispute resolution, particularly within the framework of Free Trade Agreements FTAs. This study explores the intersection of AI-based adjudication, corporate law, and ISDS mechanisms under FTAs. It critically examines whether algorithmic judgments can uphold the core legal principles of fairness, transparency, and accountability, especially in cross-border disputes involving private investors and sovereign states. Using a doctrinal research approach supplemented by case analysis and emerging treaty practices, this paper evaluates the legal and ethical implications of delegating adjudicative functions to AI systems. Key findings suggest that while AI offers potential benefits in terms of efficiency and consistency, it also poses significant risks related to due process, bias, and the opacity of decision-making. The study proposes a hybrid human-AI adjudication model, alongside the incorporation of AI-specific clauses in future FTAs to safeguard procedural rights. It concludes that proactive legal frameworks are essential to harness AI's advantages without compromising the integrity of international dispute resolution. The integration of AI into legal adjudication processes is transforming the landscape of corporate dispute resolution, particularly within the framework of FTAs. As AI systems increasingly participate in decision-making roles, concerns emerge regarding due process, accountability, transparency, and compatibility with international arbitration norms. This paper explores the theoretical and practical implications of AI-based judgments in the context of investor-state dispute settlement ISDS mechanisms, analyses the legal and ethical challenges posed by automated adjudication in cross-border corporate disputes, and proposes a regulatory framework to reconcile technological innovation with principles of procedural justice under FTAs.
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