THE AUTHORS<\/strong>: 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) <\/a>is one of the most comprehensive pieces of AI legislation to date, and its implementation details carry significant consequences for the dispute resolution community.<\/p>\n\n\n\n On 19 May 2026, the European Commission published its long-awaited draft guidelines on the classification of high-risk AI systems<\/a>. 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.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n \u201cWe 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 \u201cDraft Guidelines\u201d). We warmly welcome the Commission\u2019s 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.<\/em><\/p>\n\n\n\n Our observations concern the treatment of arbitral institutions within the notion of \u201cADR bodies\u201d for the purposes of Annex III, point 8(a) of Regulation (EU) 2024\/1689 (the \u201cAI Act\u201d), 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.<\/em><\/p>\n\n\n\n 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.<\/em><\/p>\n\n\n\n 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 \u201ccourt\u201d, \u201ccommission\u201d, or similar designations in its name.[1]<\/a><\/em><\/p>\n\n\n\n Paragraph 428 of the Draft Guidelines correctly observes that the AI Act does not define which entities constitute \u201cADR bodies.\u201d Paragraph 429 then includes within that notion \u201ccommercial arbitration institutions (e.g. national and international arbitration bodies) or investment dispute bodies that resolve disputes between businesses.\u201d<\/em><\/p>\n\n\n\n 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 \u201cADR body\u201d for the purposes of Annex III, point 8(a) of the AI Act risks attaching the resulting obligations to a wrong actor.<\/em><\/p>\n\n\n\n Concerning judicial activities, paragraphs 411\u2014412 of the Draft Guidelines state that judicial administration (i.e., \u201cinstitutions or bodies that are responsible for the management, governance, and support of the judiciary, rather than for the adjudication of cases themselves\u201d) 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.<\/em><\/p>\n\n\n\n The same reasoning applies to other forms of ADR where the relevant body\u2019s 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. <\/em><\/p>\n\n\n\n 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.<\/em><\/p>\n\n\n\n Relatedly, we respectfully suggest that the Commission might consider the implications of the statement at paragraph 429 of the Draft Guidelines that \u201cinvestment dispute bodies [\u2026] resolve disputes between businesses\u201d. 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 \u201cbetween businesses.\u201d<\/em><\/p>\n\n\n\n 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.<\/em><\/p>\n\n\n\n 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\u2019s disposal for any further information that may be of assistance.\u201d<\/em><\/p>\n\n\n\n
Professor Maxi Scherer<\/strong>, President of the LCIA (London Court of International Arbitration)<\/a> Court<\/strong>
Veronika Pavlovskaya<\/strong>, Counsel, LCIA (London Court of International Arbitration)<\/a><\/strong><\/p>\n\n\n\n
\n\n\n\nDraft Letter<\/strong><\/h2>\n\n\n\n
1. The essence of international arbitration and the role of arbitral institutions<\/em><\/strong><\/h3>\n\n\n\n
2. Paragraphs 428\u2014429: the risk of attaching obligations to the wrong actor<\/em><\/strong><\/h3>\n\n\n\n
3. Paragraphs 411\u2014412: consistency with the treatment of judicial administration<\/em><\/strong><\/h3>\n\n\n\n
4. The characterisation of investment dispute bodies<\/em><\/strong><\/h3>\n\n\n\n
5. Conclusion<\/em><\/strong><\/h3>\n\n\n\n
Current List of Signatories<\/strong><\/h3>\n\n\n\n
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