THE AUTHORS:
Professor Maxi Scherer, President of the LCIA (London Court of International Arbitration) Court
Veronika Pavlovskaya, Counsel, LCIA (London Court of International Arbitration)
Artificial intelligence is reshaping the way disputes are managed, processed, and decided. As AI tools become increasingly embedded in legal practice, the regulatory frameworks governing their use are catching up fast. The EU AI Act (Regulation (EU) 2024/1689) is one of the most comprehensive pieces of AI legislation to date, and its implementation details carry significant consequences for the dispute resolution community.
On 19 May 2026, the European Commission published its long-awaited draft guidelines on the classification of high-risk AI systems. The associated targeted consultation, originally due to close on 23 June, has since been extended to 23 July. The stakes for international arbitration are high: under Annex III of the AI Act, AI systems used in the context of “ADR bodies” may be classified as high-risk, triggering a stringent set of obligations. How the Commission ultimately defines that category will determine who bears those obligations and under what circumstances.
At the LCIA, we were pleased to support the coordination of a cross-institutional response involving leading arbitral institutions with strong ties to the European Union. The resulting joint letter reflects the collective position of the LCIA and nine other institutions. Its message is measured but important: the draft guidelines, as currently written, risk attaching regulatory obligations to the wrong actor. Arbitral institutions administer proceedings; they do not decide the merits of disputes. That distinction, well understood within the arbitration community, is not yet fully reflected in the Commission’s text.
Below, we reproduce the full text of the joint letter and the current list of signatories. The initiative remains open: any institution or stakeholder wishing to join or comment is invited to do so before 20 July 2026.
Draft Letter
“We write in our respective capacities as representatives of the undersigned international arbitration institutions, in response to the targeted consultation on the draft Commission Guidelines on the classification of high-risk AI systems under Article 6 of Regulation (EU) 2024/1689 (the “Draft Guidelines”). We warmly welcome the Commission’s initiative to bring clarity to this important area, and we are grateful for the opportunity to offer a small number of observations, made in a constructive spirit and out of a shared concern for the sound administration of international dispute resolution.
Our observations concern the treatment of arbitral institutions within the notion of “ADR bodies” for the purposes of Annex III, point 8(a) of Regulation (EU) 2024/1689 (the “AI Act”), and the characterisation of investment dispute bodies. We respectfully suggest that these are areas in which the Draft Guidelines would benefit from refinement before they are finalised.
1. The essence of international arbitration and the role of arbitral institutions
International arbitration is a consensual means of resolving cross-border disputes, in which the parties agree to submit their dispute to an independent and impartial arbitral tribunal as an alternative to the national courts. The arbitral tribunal is constituted for each dispute in accordance with the procedure agreed by the parties, and includes one or more individuals (arbitrators). The decision on the merits of the dispute (an arbitral award), which generally has binding and final effect on the parties, as stated at paragraph 431 of the Draft Guidelines, is rendered by that arbitral tribunal.
Arbitral institutions, by contrast, perform a distinct function: they administer proceedings (e.g., receiving the request for arbitration, assisting with the constitution of the tribunal, managing the costs of the arbitration, and safeguarding the integrity and efficiency of the process) thereby rendering administrative and organisational services to the parties and to the arbitral tribunal. They do not decide the merits of the dispute. This remains the case notwithstanding that an arbitral institution, or one of its constituent bodies, may use terms such as “court”, “commission”, or similar designations in its name.[1]
2. Paragraphs 428—429: the risk of attaching obligations to the wrong actor
Paragraph 428 of the Draft Guidelines correctly observes that the AI Act does not define which entities constitute “ADR bodies.” Paragraph 429 then includes within that notion “commercial arbitration institutions (e.g. national and international arbitration bodies) or investment dispute bodies that resolve disputes between businesses.”
We would respectfully suggest that this might lead to misunderstandings. Because arbitral institutions administer proceedings and do not decide the merits of the dispute, as set out in the previous section, treating the arbitral institution as the relevant “ADR body” for the purposes of Annex III, point 8(a) of the AI Act risks attaching the resulting obligations to a wrong actor.
3. Paragraphs 411—412: consistency with the treatment of judicial administration
Concerning judicial activities, paragraphs 411—412 of the Draft Guidelines state that judicial administration (i.e., “institutions or bodies that are responsible for the management, governance, and support of the judiciary, rather than for the adjudication of cases themselves”) is not covered by the AI Act. We respectfully submit that the same should apply to arbitral institutions, whose role is analogous: the management, governance and support of the arbitral process, rather than the adjudication of the cases themselves.
The same reasoning applies to other forms of ADR where the relevant body’s role is confined to administering proceedings, without any power to determine or influence the merits of the dispute. This may include, by way of example, bodies administering mediation, expert determination, or dispute board proceedings, where the outcome has legal effects for the parties within the meaning of paragraph 431 of the Draft Guidelines.
Such an approach is consistent with Recital 61 of the AI Act, which excludes from high-risk classification AI systems intended to be used solely for ancillary administrative activities that do not affect the actual administration of justice in individual cases.
4. The characterisation of investment dispute bodies
Relatedly, we respectfully suggest that the Commission might consider the implications of the statement at paragraph 429 of the Draft Guidelines that “investment dispute bodies […] resolve disputes between businesses”. Investment tribunals typically resolve disputes involving not only businesses, but also sometimes individuals as claimants and, most importantly, States as respondents. By their very nature, investment disputes are typically seen as disputes between an investor and a host State, rather than disputes “between businesses.”
5. Conclusion
For the reasons set out above, we would respectfully suggest the Commission (i) clarify that, where the high-risk classification under Annex III, point 8(a) of the AI Act is engaged in respect of alternative dispute resolution, it attaches to the AI system used by, or on behalf of, the arbitral tribunal in the exercise of its adjudicative function, rather than to the AI system used by the arbitral institution for rendering administrative and organisational services to the parties and to the arbitral tribunal; and (ii) revisit the characterisation of investment dispute bodies.
We would be glad to elaborate on any of the above in writing or in an in-person meeting, and we remain at the Commission’s disposal for any further information that may be of assistance.”
Current List of Signatories
- CAM Milan Chamber of Arbitration
- DIS German Arbitration Institute
- ICC International Court of Arbitration & International Centre for ADR
- LCIA London Court of International Arbitration
- NAI Netherlands Arbitration Institute
- SCC Arbitration Institute
- Swiss Arbitration Centre
- The Danish Institute of Arbitration
- The Finland Arbitration Institute
- VIAC Vienna International Arbitral Centre
[1] We note that Article I(2) of the 1958 New York Convention extends the term “arbitral awards” to awards “made by permanent arbitral bodies to which the parties have submitted”, and that courts have on occasion described certain arbitral institutions in those terms. That provision ensures the enforceability of institutionally administered awards; it does not suggest that the institution exercises the tribunal’s adjudicative function. In all such cases, the award remains one rendered by the arbitrators.
About the LCIA
The London Court of International Arbitration (LCIA) is one of the world’s leading institutions for the resolution of cross-border disputes. Established more than 130 years ago in the City of London, it operates today as a wholly independent, non-profit institution, not affiliated with any chamber, trade body, or government.
Over the past decade, the LCIA has administered cases involving parties from more than 170 jurisdictions, 80 seats of arbitration, and 110 governing laws. Renowned for its independence, efficiency, and impartiality, it administers many of the world’s most significant disputes. Independent analyses of its anonymised case data show that the LCIA is among the most cost-effective of the major arbitral institutions, particularly for high-value cases.
The LCIA’s work is supported by a balanced approach to transparency and confidentiality, established systems for electronic filing and remote hearings, and ongoing design and testing of legal technology and AI to support case management. With generations of administered arbitrations behind it, and a readiness for the arbitrations of tomorrow, the LCIA is recognised worldwide as a standard-setting institution and trusted leader in international dispute resolution.
For more information, visit https://www.lcia.org/
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
