Recent insights from the legal industry

Jurisdiction is often one of the first and most critical issues in cross-border litigation. Where proceedings are initiated in the English courts, defendants may have grounds to challenge jurisdiction, either because the dispute can be more appropriately heard elsewhere or because of procedural irregularities. Understanding the rules governing such challenges, particularly under Part 11 of the English Civil Procedure Rules (“CPR”), is essential for businesses and legal practitioners involved in international disputes.

This article explores the legal framework for disputing jurisdiction, the procedural steps involved and key developments following Brexit. It also examines recent case law and the practical implications for businesses managing cross-border legal risks.

Grounds for Challenging the Jurisdiction of the English Courts

A defendant may challenge the jurisdiction of the English courts on several grounds, including:

(a) Defective Service of Proceedings

A jurisdictional challenge can be based on improper service of a claim form. The CPR sets out strict requirements for service both within and outside the jurisdiction. If service has not been properly executed, the defendant can apply under CPR 11 to contest the court’s authority to hear the case. For example:

If the claim form was not served within the prescribed time limit, the court may declare it has no jurisdiction.
If service was attempted but did not comply with procedural rules, the claim may be struck out.

The case of Hand Held Products, Inc v Zebra Technologies Europe Ltd [2022] EWHC 640 (Ch) clarified that if a defendant claims that service was ineffective, they are not necessarily required to challenge jurisdiction under CPR 11 but may instead rely on CPR 7.7(3).

(b) Forum Non Conveniens (More Appropriate Forum)

Even if service is valid, a defendant may argue that the case should be heard in a different jurisdiction. The doctrine of forum non conveniens allows the English court to decline jurisdiction if another forum is clearly the more appropriate forum for the resolution of the dispute.

The test for forum non conveniens, established in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460, involves two stages:

Defendant’s Burden: The defendant must demonstrate that another jurisdiction is clearly the more appropriate forum for the dispute.
Claimant’s Burden: If the defendant succeeds, the claimant may still resist the challenge by showing real risk that it will not receive justice in the alternative forum.

(c) Exclusive Jurisdiction Clauses

Contracts often include jurisdiction clauses specifying which courts have authority over disputes. If an agreement contains a clause granting exclusive jurisdiction to the courts of another country, the English court will generally uphold absent exceptional circumstances.

Under the Hague Convention on Choice of Court Agreements 2005, the UK must respect exclusive jurisdiction clauses agreed with contracting states. However, following Brexit, the UK is no longer bound by the Recast Brussels Regulation, which previously provided for automatic recognition and enforcement of jurisdiction clauses within the EU.

(d) Arbitration Agreements

Where a dispute falls within the scope of an arbitration agreement, the defendant may apply for a stay of proceedings under Section 9 of the Arbitration Act 1996. In such cases, CPR 11 does not apply, and the defendant must follow the specific procedure under CPR 62.

Procedural Requirements Under CPR 11

Challenging the jurisdiction of the English court requires strict adherence to CPR 11, which governs how and when a defendant must apply:

Acknowledgment of Service (CPR 10)
- A defendant must file an acknowledgment of service within 14 days of being served with the claim form.
- The acknowledgment must indicate an intention to dispute jurisdiction.
Application to Challenge Jurisdiction
- The defendant must apply within 14 days of filing the acknowledgment of service.
- The application must set out the grounds for disputing jurisdiction, supported by evidence.
Hearing and Judicial Consideration
- The court will assess whether jurisdiction is properly established.
- If the challenge is successful, the court may strike out the claim or order a stay of proceedings.

Failure to comply with CPR 11 may result in the defendant being deemed to have submitted to the jurisdiction of the English court.

Impact of Brexit on Jurisdictional Challenges

Brexit has significantly altered the legal landscape for jurisdictional disputes involving UK and EU parties:

End of the Recast Brussels Regulation and Lugano Convention:
- The UK is no longer part of the Lugano Convention 2007, meaning jurisdictional disputes involving EEA countries are now governed by common law principles rather than EU regulations.
The Hague Convention 2005 as the Default Regime:
- The Hague Convention applies where contracts contain exclusive jurisdiction clauses.
- However, it does not cover non-exclusive jurisdiction clauses, leading to uncertainty in some cases.
Enforcement of Foreign Judgments:
- The lack of an automatic mechanism for enforcing UK judgments in the EU may increase the complexity of cross-border litigation.

The UK has also joined the Hague Judgments Convention 2019, which will come into force on 1 July 2025, improving the process for recognition and enforcement of judgments between contracting states.

Recent Case Law Developments

Several recent cases have clarified key aspects of jurisdictional challenges:

Public Institution for Social Security v Ruimy [2023] EWHC 177 (Comm): The court refused to stay proceedings in favor of Switzerland, emphasizing the importance of avoiding inconsistent judgments in multi-jurisdictional disputes.
Lungowe v Vedanta Resources Plc [2019] UKSC 20: The Supreme Court found that England was not the appropriate forum for claims against a Zambian defendant, despite the presence of a UK-domiciled parent company.
Punjab National Bank (International) Ltd v Srinivasan [2019] EWHC 3495 (Ch): The High Court set aside permission to serve out of the jurisdiction, finding that England was not the most appropriate forum given ongoing proceedings in India and the US.
Joyvio Group Co Ltd v Moreno [2024] EWHC 2493 (Comm): The Commercial Court granted a stay in favor of Chile, highlighting the need for strong connections to the English jurisdiction.

Conclusion

Disputing the jurisdiction of the English court is a complex but essential area of litigation, particularly in cross-border disputes. With the evolving legal landscape post-Brexit and recent case law developments, businesses must carefully navigate jurisdictional challenges to protect their legal interests.

LEGAL UPDATES

Expected Revisions to the Arbitration Act in 2025

The Arbitration Bill [HL] 2024-25 (the “Bill”) was introduced in the House of Lords on 18 July 2024. Following its completion of the Lords stages on 6 November 2024, the Bill was forwarded to the House of Commons and completed its second reading on 29 January 2025. The Bill is presently in the Committee stage.

Detailed explanatory notes and an update on the Bill's progress can be accessed on the UK Parliament website. Additionally, government resources such as a factsheet, impact assessment and memoranda on human rights and delegated powers are available on GOV.UK.

What Does the Bill Propose?

Arbitration involves resolving disputes through an impartial arbitrator or tribunal, which delivers a binding decision. The Bill aims to update the Arbitration Act 1996 (the “1996 Act”) based on the Law Commission's recommendations, aligning with the government's goal to maintain the UK’s status as a leading arbitration hub amidst global legislative developments.

Revisiting the 1996 Act

The 1996 Act governs arbitration in England, Wales and Northern Ireland. London is widely recognised as a premier arbitration centre, with English law governing many international commercial agreements.

In March 2021, the Conservative government tasked the Law Commission with reviewing the 1996 Act to ensure its relevance. Consultations on potential reforms were conducted in September 2022 and March 2023, culminating in a final report in September 2023. The report included proposals on arbitration agreements, arbitrator challenges, court support for arbitration and dismissing meritless claims.

The Law Commission acknowledged that the Act generally functions well and does not require comprehensive reform, recommending targeted updates instead. These recommendations were accepted by the government, leading to the introduction of the Arbitration Bill [HL] 2023-24. Although this bill was amended during its legislative process, it lapsed when Parliament was prorogued in May 2024 ahead of the General Election.

Current Progress

The Labour government reaffirmed its commitment to reintroducing the Bill in the King’s Speech on 17 July 2024. The revised Bill was introduced in the House of Lords the following day, incorporating amendments from earlier readings and changes related to arbitration agreements in investor-state treaties. On 11 September 2024, further amendments addressed appeals on stays of legal proceedings and revised the Bill’s long title. The Bill applies to England, Wales and Northern Ireland and is anticipated to take effect in 2025.

Key Proposals

The proposed amendments are designed to modernize the 1996 Act without fundamentally altering its framework. Key changes include:

Governing Law of Arbitration Agreements: Introducing a default rule that, unless otherwise agreed, the law of the seat of arbitration governs the agreement. Exceptions apply to agreements in investment treaties or under foreign laws.
Summary Disposal: Allowing arbitrators to summarily dismiss claims or issues with no real prospect of success unless the parties object.
Third-Party Orders (s.44): Clarifying court powers to assist arbitration in cases involving parties outside the arbitration agreement.
Disclosure Obligations: Codifying the duty of arbitrators to disclose any circumstances which may cast doubt on their impartiality, based on information they know or reasonably should know.
Jurisdiction Challenges (s.67): Restricting new evidence or objections during court challenges to the tribunal’s jurisdiction unless undiscoverable with reasonable diligence.
Arbitrator Immunity: Extending immunity to cover reasonable resignation and costs associated with removal applications unless acted in bad faith.
Emergency Arbitrators: Empowering emergency arbitrators to issue binding orders and grant permissions for court applications under s.44.

Recent court cases, such as UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30, have highlighted the practical implications of these changes. The Supreme Court confirmed that arbitration agreements are generally governed by the main contract’s law unless otherwise specified. This has enabled the English court to support foreign-seated arbitrations through anti-suit injunctions. However, the proposed reforms could limit the court’s ability to grant such relief in the future, particularly in disputes involving Russian parties.

LEGAL UPDATES

Civil Justice Council Extends Consultation on Litigation Funding Until 3 March 2025

On 28 January 2025, the Civil Justice Council (“CJC”) announced an extension to its consultation on litigation funding, which will now remain open until 11:59 pm on Monday 3 March 2025. This decision follows the initial launch of the consultation on 31 October 2024, alongside the publication of the CJC’s interim report on third-party litigation funding.

The consultation seeks views from legal professionals, funders and other stakeholders on the regulation and future framework of litigation funding in the UK. The CJC has clarified this extension will not impact the finalisation of the full report, which is expected to provide recommendations on how third-party litigation funding should be structured within the civil justice system.

The consultation is open to all interested parties and responses should be submitted in PDF or Word format to CJCLitigationFundingReview@judiciary.uk, along with a completed cover sheet. The CJC has also emphasized that respondents are not required to answer all questions—submissions can focus solely on the areas of particular relevance or interest to the contributor.

For any queries regarding the consultation, stakeholders can contact the CJC directly at CJC@judiciary.uk.

LEGAL UPDATES

LCIA’s Costs and Duration Report: Key Takeaways

On 30 December 2024, the London Court of International Arbitration (“LCIA”) published an updated analysis on arbitration costs and duration. This is the third such report, covering cases that reached a final award between January 2017 and May 2024. Instead of expanding on prior reports, the LCIA compared the latest data with figures from its 2017 analysis. The findings indicate an increase in both arbitration costs and case duration, with the median case lengthening from 16 to 20 months and overall fees rising from USD97,000 to USD117,653.

Despite these changes, the LCIA’s caseload has remained relatively consistent with 2013 levels, with areas such as commodities, loans and shareholder agreements continuing to feature prominently. However, comparisons with other arbitral institutions, such as the International Chamber of Commerce (“ICC”) and the Singapore International Arbitration Centre (“SIAC”), highlight varying trends. The ICC, for instance, has recorded longer case durations but a significantly higher percentage of cases reaching a final award. In contrast, SIAC has experienced a notable increase in arbitration filings; however, it has not yet surpassed the LCIA in terms of awards issued.

One of the most significant developments in the LCIA’s cost structure is the rise in administrative charges, which has had a particular impact on lower-value disputes. While the LCIA remains a cost-effective option for high-value arbitrations, the report raises questions regarding the affordability of its services for smaller disputes. The findings suggest the LCIA may need to consider greater transparency in its reporting and explore potential procedural reforms, including the introduction of expedited arbitration mechanisms, to maintain its competitiveness in the evolving arbitration landscape.

Legal Updates From Different Jurisdictions

BVI Commercial Court Orders Repatriation of Wrongfully Dissipated Funds in Support of Arbitration Award Enforcement

In a landmark decision, the BVI Commercial Court has, for the first time, issued a mandatory injunction requiring the repatriation of funds wrongfully transferred abroad to support the enforcement of an arbitration award. The case, Global Mining Development LP & another v China National Gold Group Hong Kong Ltd & another (BVIHCM2023/0070), involved a dispute over share ownership in a BVI company, Soremi Investments Ltd (“SIL”).

Following arbitration in Hong Kong, Global Mining Development LP was awarded full ownership of SIL, but China National Gold Group Hong Kong Ltd (“CNG”) failed to comply with the tribunal’s orders. Despite an undertaking given to Global Mining Development LP, CNG transferred approximately USD200 million from a Paris-based account to an entity in China. The BVI Court granted both a freezing injunction and a mandatory order requiring the funds to be returned to SIL’s French bank account.

While the discharge application remains pending, this decision underscores the BVI Court’s strong pro-enforcement stance and its willingness to take decisive measures to uphold foreign arbitral awards.

Legal Updates From Different Jurisdictions

HKIAC Issues Guidance on Arbitration Clause Compatibility for Consolidation and Multi-Contract Arbitrations

On 20 January 2025, the Hong Kong International Arbitration Centre (“HKIAC”) released a new Practice Note on Compatibility of Arbitration Clauses under its Administered Arbitration Rules. The guidance clarifies how the HKIAC determines whether arbitration agreements are compatible for consolidation (Article 28) and multi-contract arbitrations (Article 29) under the 2018 and 2024 Rules.

The HKIAC emphasizes that compatibility does not require identical clauses but must ensure procedural efficiency and uphold party consent. A significant factor affecting compatibility is the method of tribunal appointment. The guidance recommends using HKIAC’s model arbitration clause and ensuring consistency in seat, number of arbitrators, procedural language and governing law.

When reviewing compatibility, the HKIAC considers whether consolidation would be procedurally unworkable, affect party consent or alter procedural agreements, potentially exposing awards to challenge. The HKIAC has found clauses incompatible where they specify different numbers of arbitrators or procedural languages, though variations in governing law or co-arbitrator appointment mechanisms may still be deemed compatible in certain circumstances.

This new guidance provides practical insights for parties drafting arbitration clauses in multi-contract transactions, helping to reduce procedural complexities and risks in future disputes.

This guidance can be found through this link.

Legal Updates From Different Jurisdictions

Hong Kong Court Issues Injunction to Preserve Assets in Support of Foreign Arbitration

In Company A and another v Company C [2024] HKCFI 3505, the Hong Kong Court of First Instance grante a worldwide Mareva injunction and related relief to support an ongoing AAA-ICDR arbitration. The ruling followed delays and resistance by one of the respondents in complying with tribunal orders regarding an escrow arrangement to prevent asset dissipation.

Background

The arbitration involved two offshore companies pursuing claims against a Hong Kong company and its parent, a Shanghai Stock Exchange-listed entity (“Shanghai Parent”). The dispute centered on a settlement agreement under which the Hong Kong company had committed to facilitating the IPO of one of the claimants, in which it held a 44% stake. The claimants sought damages of approximately USD55.5 million, while the Hong Kong company and Shanghai Parent counterclaimed for USD2 million.

During the arbitration, the Shanghai Parent disclosed plans to sell 51% of its shares in the Hong Kong company, including its business operations and assets. Concerned that this could frustrate enforcement of any eventual award, the claimants sought an order from the tribunal requiring the Hong Kong company to deposit USD55.5 million into escrow. While the tribunal allowed the claimants to seek emergency relief from Hong Kong courts, it did not impose interim measures itself.

The claimants then applied under section 45 of the Arbitration Ordinance (Cap. 609) for an injunction preventing the Hong Kong company from transferring assets to the Shanghai Parent or related entities, along with a worldwide Mareva injunction restraining asset disposal up to USD55.5 million. The court initially granted interim injunctions pending a full hearing, after which the Hong Kong company provided undertakings not to transfer or remove assets. However, ongoing negotiations regarding the escrow arrangement remained unresolved.

Legal Issues and Court Ruling

Under section 45 of the Arbitration Ordinance, Hong Kong courts may grant interim relief in support of arbitration, including foreign proceedings, provided the relief is necessary to facilitate the arbitration process. The Hong Kong company opposed the injunctions, arguing:

The tribunal had already ordered escrow payments; making additional relief unnecessary.
Since the tribunal was still handling the interim measures application, court intervention was neither appropriate nor justified.

Justice Mimmie Chan ruled in favor of the claimants, emphasizing Hong Kong courts should exercise their power to grant interim measures sparingly. However, given the respondent’s delays and lack of compliance, judicial intervention was warranted. The tribunal had yet to finalise the escrow arrangement, and the Hong Kong company's conduct—characterized as "procrastination and obstruction"—threatened the effectiveness of the arbitration process.

The court also noted that even if the tribunal had granted interim relief, enforcement of its directions had been frustrated by the Hong Kong company's inaction. Granting the injunctions aligned with the objectives of the Arbitration Ordinance, which aims to ensure efficient dispute resolution without unnecessary delay or cost. Additionally, the court authorised enforcement of any interim measures issued by the tribunal under section 61 of the Arbitration Ordinance.

Implications

This decision reaffirms the Hong Kong courts’ willingness to grant interim relief in support of foreign arbitrations, particularly when:

the tribunal is unable to act promptly or effectively;
court intervention is necessary to prevent steps that could undermine the arbitration; and
the respondent’s conduct demonstrates obstruction or non-compliance with tribunal orders.

While Hong Kong courts generally defer to the tribunal and the courts of the seat, they will intervene in cases where it is necessary to uphold the integrity of the arbitral process. This ruling also highlights the court’s approach to enforcing tribunal-ordered interim relief under section 61, adding to recent jurisprudence on the subject.

Legal Updates From Different Jurisdictions

Svea Court of Appeal Annuls Intra-EU Investment Treaty Award for Public Policy Violation

On 23 December 2024, the Svea Court of Appeal (“COA”) annulled an arbitral award in Poland v Mercuria Energy Group Ltd (Case No T 2613-23), citing its incompatibility with Swedish public policy. The award, issued in a Swedish-seated arbitration under the Energy Charter Treaty (“ECT”), was deemed unenforceable based on the court’s consistent approach to intra-EU investment disputes.

The COA referenced significant rulings from the European Court of Justice (“ECJ”), including Achmea, Komstroy, and PL Holdings, as well as the Swedish Supreme Court’s decision in Poland v PL Holdings (Case No NJA 2022 p. 965). The court reaffirmed that intra-EU investment arbitration awards breach fundamental principles of EU law, making their enforcement in Sweden contrary to public policy.

Mercuria challenged the annulment, arguing it violated Article 1, Protocol 1 of the European Convention on Human Rights (“ECHR”), which protects property rights, and Article 13 ECHR, which guarantees the right to an effective remedy. However, the COA applied the Bosphorus presumption, holding that EU legal principles, when endorsed by the ECJ, are presumed compliant with ECHR protections. The court found no grounds to depart from previous ECJ rulings, maintaining that annulment did not infringe fundamental rights.

This decision aligns with Sweden’s broader judicial approach to intra-EU investment disputes, reinforcing the supremacy of EU legal principles over arbitration awards. The ruling also highlights the challenges in contesting the Bosphorus presumption, particularly when national courts defer to the ECJ in determining the compatibility of EU investment frameworks with the ECHR.

Legal News

U.S. Government Announces New Sanctions and Expands Export Controls on Russia and Belarus

Case Law Digest Series

Case Digest: Commercial Bank of Dubai PSC v Al Sari [2024] EWHC 3304 (Comm)

Commercial Bank of Dubai PSC v Al Sari concerns the enforcement of a Sharjah judgment in England and allegations of fraudulent obstruction by the defendants. The court ruled that the Sharjah Court of Appeal’s judgments were not preclusive, allowing fraud claims to proceed. It also upheld judicial proceedings immunity (“JPI”) in part and refused to permit service of a worldwide freezing order out of the jurisdiction. The decision reinforces key principles in cross-border judgment enforcement, JPI and limits on freezing relief.

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Legal News

U.S. Government Announces New Sanctions and Expands Export Controls on Russia and Belarus

Case Law Digest Series

Case Digest: Camper & Nicholsons International Ltd v Langmead [2024] EWHC 2135 (Comm)

The English court granted a domestic freezing order but refused a worldwide freezing order (“WWFO”) in support of Swiss arbitration proceedings. The claimant alleged that the respondent diverted commissions for personal gain. The court found a real risk of dissipation but ruled that a WWFO was not justified, as the respondent remained London-based. The decision underscores the limits on worldwide relief in foreign arbitration cases.

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Firm News

A Landmark Achievement in Luxembourg

We are delighted to share a historic win achieved by Jean-Baptiste (“JB”) Meyrier in Luxembourg, which is a pivotal moment in procedural law. For the first (known) time since 1910, an order for leave to serve an application for speedy redress on the merits (ordonnance de fixation d’une affaire au fond àbref délai) has been successfully granted. This remarkable accomplishment revives a legal mechanism long forgotten in Luxembourg but widely known in France as procédure à jour fixe.

This innovative procedural avenue allows applicants, upon ex-parte authorisation, to summon counterparties for a hearing on the merits with unprecedented speed. Instead of the typical multi-year timeframe, the matter can proceed to a hearing within days, significantly limiting procedural delays.

We filed the application for leave on 11 December 2024 with the order being granted on 19 December 2024 and a hearing fixed for 2 January 2025. The application was served on the counterparties on 23 December 2024, ensuring swift progress over the holiday period. The hearing was conducted as scheduled, with the parties exchanging final briefs and exhibits just minutes before the hearing began.

The decision, due to be issued on 20 February 2025, is expected to set a significant precedent in banking and financial law, offering hope for a positive outcome for our client despite the case's complex legal challenges.

This success underscores the extraordinary expertise, dedication and ingenuity of JB and the Belgravia Law team, which, with meticulous preparation, secured this remarkable result.

This milestone highlights our firm's commitment to delivering innovative legal strategies that achieve timely results for clients facing even the most challenging circumstances.

Firm News

Belgravia Law successfully obtains recognition and assistance at common law for foreign bankruptcy trustee in High Court proceedings

On 23 January 2025, Chief ICC Judge Briggs, sitting as Deputy Judge of the High Court, handed down judgment in Vesnin v Queeld Ventures Limited & Another [2025] EWHC 104 (Ch).

The trustee was appointed by the Russian Bankruptcy Court on 24 June 2022. Belgravia Law represented the trustee in applying to the English High Court for recognition at common law of the foreign bankruptcy and the trustee's appointment. Two off-shore companies were named as respondents in relation to assistance.

Chief ICC Judge Briggs ruled that the respondents had no standing to oppose recognition. The Judge developed the law in this area by confirming only parties with a "tangible economic interest in the bankruptcy and acting in the same capacity as that which gives rise to the tangible economic interest" may oppose common law recognition.

As the Judge found the foreign bankruptcy was not barred on grounds of fraud, breach of natural justice or public policy, he made an order recognising the bankruptcy and trustee's appointment. The Judge provided assistance to the trustee to enable him to fully participate in parallel High Court proceedings concerning the disputed ownership of replacement share certificates in an English AIM-listed company.

Our team consisted of Richard Beckwith (Of Counsel), Viktor Rykov (Senior Solicitor) and Aleks Sekulic (Paralegal), alongside the exceptional counsel team of Stephen Davies KC (Enterprise Chambers) and Lionel Nichols (4 New Square).

The judgment can be read here.

Belgravia Law will be representing the trustee in the parallel proceedings before the Court of Appeal in April 2025.

Artificial Intelligence Hub

The Role of Generative AI in Arbitration

The use of generative artificial intelligence (“GenAI”) is rapidly transforming various industries, and international arbitration is no exception. While the integration of AI-driven tools presents significant opportunities, it also raises important legal and ethical challenges which must be carefully navigated by practitioners and institutions alike.

Opportunities in Arbitration

Enhanced Legal Research and Drafting:
GenAI tools can efficiently analyse large volumes of case law, arbitral awards and legal texts, assisting counsel in drafting pleadings, memorials and submissions. The ability to generate well-structured legal arguments based on precedent may significantly reduce the time and cost associated with legal research.
Efficiency in Document Review and Evidence Analysis:
AI-powered tools can process and review voluminous documentary evidence, identifying patterns and inconsistencies more effectively than human review alone. This is particularly useful in complex disputes involving extensive electronic disclosure and data-heavy arbitration cases.
AI-Assisted Decision Support:
Arbitrators can leverage AI to cross-check reasoning, summarise submissions, and identify relevant authorities. While AI cannot replace human adjudication, it can serve as a tool to enhance decision-making by ensuring consistency and thorough analysis of available material.
Improved Procedural Management:
AI-powered virtual hearing platforms can facilitate smoother proceedings by automating scheduling, real-time transcription, and even language translation. These efficiencies make arbitration more accessible and cost-effective, particularly in cross-border disputes.

Risks and Challenges

Bias and Transparency Concerns:
AI models, including GenAI, can inadvertently reproduce biases present in training data. If AI-generated legal analysis is relied upon without scrutiny, there is a risk of perpetuating systemic biases that could affect procedural fairness and equality of arms.
Confidentiality and Data Security:
Arbitration is often preferred for its confidential nature. The use of AI tools, especially cloud-based systems, raises concerns about data protection and the risk of unauthorised access or data breaches. Practitioners must ensure that AI applications comply with applicable confidentiality obligations and data privacy regulations.
Accountability and Reliability:
AI-generated content may contain errors, hallucinations or misinterpretations of legal principles. The lack of accountability mechanisms for AI-generated outputs means practitioners and arbitrators must exercise caution when integrating AI tools into decision-making processes.
Regulatory and Ethical Considerations:
The regulatory landscape surrounding AI use in arbitration is still evolving. While jurisdictions are beginning to develop AI governance frameworks, there remains uncertainty regarding the extent to which AI-generated submissions or AI-assisted awards might be challenged or scrutinized by courts and enforcement mechanisms.

Looking Ahead

The arbitration community must strike a balance between embracing the efficiencies offered by GenAI and addressing the risks it presents. Institutions and practitioners should adopt clear guidelines on AI usage, ensuring it enhances rather than undermines the integrity of arbitration proceedings. Ongoing collaboration between legal professionals, AI developers and regulatory bodies will be key to shaping an arbitration ecosystem that is both innovative and legally sound.

While AI is not in a position to replace human arbitrators, it is poised to become an indispensable tool in modern dispute resolution. The challenge lies in ensuring its integration remains aligned with fundamental principles of fairness, confidentiality and procedural justice.

Artificial Intelligence Hub

DeepSeek: The Chinese AI App Redefining the Global AI Landscape

The AI industry has been shaken by the rise of DeepSeek, a Chinese AI model which has swiftly climbed the ranks of Apple’s App Store downloads. Its rapid ascent has startled investors, impacted global tech stocks and reignited discussions on China’s AI ambitions amid ongoing US-China technological competition.

The Rise of DeepSeek

DeepSeek’s latest version, released on 20 January 2025, has quickly gained recognition for its efficiency and cost-effectiveness. Unlike its Western counterparts, DeepSeek reportedly operates on a fraction of the computing resources used by OpenAI’s models, challenging the prevailing notion that cutting-edge AI development requires massive investments in high-performance chips.

This cost-effectiveness has had a direct impact on the semiconductor industry. The revelation that DeepSeek achieved advanced AI capabilities with fewer chips contributed to a historic USD600 billion loss in Nvidia’s market value—highlighting investor concerns about the future demand for premium AI chips.

Regulatory and Geopolitical Implications

DeepSeek’s emergence raises questions about the effectiveness of US restrictions on semiconductor exports to China. Washington has sought to limit China’s AI advancements by curbing access to advanced chips, yet DeepSeek’s success suggests Chinese firms are finding ways to circumvent these limitations through alternative technologies.

Meanwhile, Beijing continues to prioritise AI as a national strategic sector. President Xi Jinping has emphasized China’s ambitions to lead in AI innovation, with DeepSeek serving as a key player in this push for technological self-sufficiency.

Capabilities and Limitations

DeepSeek is designed as a generative AI model, comparable to OpenAI’s GPT series. It is reportedly on par with OpenAI’s o1 model in mathematical and coding tasks while requiring significantly fewer computing resources. Its efficiency is attributed to a blend of advanced Nvidia A100 chips—stockpiled before export bans—and less sophisticated alternatives.

However, like other Chinese AI models, DeepSeek is subject to government-imposed content restrictions. When queried about politically sensitive topics, the model avoids direct responses. This presents challenges for its adoption outside of China, particularly in jurisdictions that uphold free speech and transparency.

Market Reactions and Industry Outlook

DeepSeek’s impact has been felt beyond AI development. The broader technology sector has experienced volatility, with AI-related stocks reacting sharply to its emergence. The Nasdaq saw a significant sell-off, and Nvidia’s stock tumbled before beginning a slow recovery.

Investors are now reassessing their assumptions about the AI industry’s cost structures and the future of semiconductor demand. DeepSeek’s success has demonstrated that advanced AI models can be developed with more economical approaches, potentially shifting investment strategies and reshaping the competitive landscape.

The Future of AI Competition

DeepSeek’s rise signifies a crucial moment in the global AI race. Its ability to achieve high-level performance with fewer resources challenges traditional industry paradigms and highlights China’s growing technological independence. As DeepSeek gains traction, it will be crucial to monitor how US and European AI firms respond, as well as whether regulatory bodies adjust their policies in light of this development.

Ultimately, DeepSeek’s impact extends beyond technological advancement—it underscores the shifting dynamics of global AI leadership, with China asserting itself as a formidable competitor in the rapidly evolving AI sector.

Artificial Intelligence Hub

FAQs SERIES: AI in Arbitration

Staying in Touch

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