The potential benefits of establishing an ai-arbitration legal framework in Malaysia

Arbitration has increasingly gained prominence as a preferred method for resolving disputes, primarily due to its considerable advantages over traditional litigation. Among its key merits, arbitration proceedings are generally more time-efficient than court processes, allowing parties to reach resolutions more quickly and cost-effectively. This efficiency makes arbitration particularly appealing in commercial and international disputes, where prolonged litigation can be detrimental to business interests. Additionally, arbitration offers confidentiality, procedural flexibility, and the opportunity for parties to appoint arbitrators with specialized expertise, which further contributes to its attractiveness as a dispute resolution mechanism. In recent years, there has been a growing focus on the integration of artificial intelligence (AI) in arbitration processes. The application of AI holds significant promise in enhancing various aspects of arbitration, such as automating document review, analyzing evidence, streamlining legal research, predicting case outcomes, and even supporting preliminary decision-making. These capabilities have the potential to significantly reduce time and costs, improve consistency in decision-making, and assist arbitrators in handling complex disputes. Despite this emerging trend, the use of AI in arbitration remains largely unregulated at the national level in many jurisdictions, including Malaysia. This regulatory gap raises critical questions about transparency, fairness, accountability, data protection, and legal certainty in AI-assisted arbitration proceedings. This article critically examines the potential benefits of establishing a comprehensive legal framework to regulate the use of AI in arbitration within the Malaysian context. Using a doctrinal research methodology, the study draws from both primary and secondary legal sources, gathered through a library-based approach. These materials are analyzed using critical and analytical techniques to explore the practical and legal implications of AI integration in arbitral proceedings. Findings reveal that regulating AI in arbitration is crucial to promoting fairness, mitigating algorithmic bias, and enhancing the integrity of the arbitral process. A legal reform would align with national strategies, such as Malaysia’s National Artificial Intelligence Roadmap (AIRMap) 2021–2025, which emphasizes the ethical and responsible deployment of AI across key sectors.