Istanbul Arbitration Days examines geopolitics, AI impact

Istanbul Arbitration Centre President Ziya Akinci opened the annual Istanbul Arbitration Days conference at Ciragan Palace on Wednesday, highlighting the institution's expanding international caseload — 263 cases last year including disputes with no connection to Türkiye — as legal practitioners gathered to examine how geopolitical tensions, sanctions regimes and artificial intelligence are transforming cross-border dispute resolution mechanisms worldwide.

Geopolitical tensions reshape arbitration strategy

Discussions throughout the day underscored the increasing impact of geopolitical developments and Western sanctions on international arbitration practice. Evgeniya Neverova, counsel at Asari Legal, told participants that lawyers representing Russian and Commonwealth of Independent States clients have developed increasingly case-specific approaches since 2022, noting that sanctions now influence critical decisions including choices of arbitral institution, seat, counsel, experts and ultimate enforceability of awards. She warned that successful parties may obtain favorable awards only to find proceeds frozen in sanctioned accounts, emphasizing that asset location and recovery prospects must be assessed from the outset of any dispute.

Ceyda Akbal Schwimann, partner at IAS Partners, highlighted divergent judicial approaches to sanctions across jurisdictions, citing recent UK and Swiss decisions on similar issues that reached different outcomes and describing this divergence as an emerging "enforcement fracture." Wolfgang Peter, founding partner at Peter & Kim, said support for arbitration remains strong among users but sanctions, controls on information and technology transfers have made the operating environment significantly more complicated for practitioners. Heiko Heppner, partner at Bird & Bird, stated that growing fragmentation of the global legal order requires counsel to become adept at navigating conflicting regulatory regimes while looking beyond the arbitration hearing itself toward the entire path of enforcement and eventual recovery.

Institutions prioritize efficiency and flexibility

Ercument Erdem, founder and senior partner at Erdem & Erdem, said institutional arbitration is shifting decisively away from excessive procedural formality toward active case management, with reforms increasingly focused on speed and efficiency. "The current direction is clear: less formality, more responsibility," he said, noting that procedures are being designed around the specific needs of individual disputes rather than institutional tradition. He pointed to recent changes aimed at accelerating proceedings, enabling early determination of unmeritorious claims and strengthening case management authority as institutions respond to longstanding concerns that arbitration has become too slow, costly and procedurally complex for commercial users.

Thomas Francis, partner at Curtis, Mallet-Prevost, Colt & Mosle LLP, said the growing prevalence of third-party funding raises complex questions extending beyond who finances a claim to who ultimately owns it, particularly in investment treaty disputes and at the enforcement stage. He noted that tribunals will likely pay increasing attention to the ownership history of claims, including issues involving jurisdiction, quantum calculations and beneficial ownership structures, as funding arrangements become more sophisticated and widespread in international disputes.

AI risks spotlight human judgment

Dominic Spenser Underhill, international arbitrator and solicitor at Spenser Underhill Newmark LLP, highlighted recent cases where AI-generated legal submissions contained fabricated authorities and inaccurate precedents, arguing that professional conduct policies and ethical guidelines alone may be insufficient safeguards because artificial intelligence is developing too rapidly for static rules-based approaches to provide adequate protection. He stressed the paramount importance of human qualities including intellectual honesty, diligence, prudence and independent judgment, warning that problems involving AI in dispute resolution are likely to "get worse before they get better" and insisting that lawyers must retain intellectual independence rather than delegate professional judgment to technological tools.

Erdem acknowledged that AI applications could help reduce costs and procedural delays in appropriate circumstances, but cautioned that such tools should not be permitted to undermine fundamental principles of confidentiality, due process or an arbitrator's personal responsibility for rendered decisions. The conference also highlighted expanding efforts to reduce the environmental footprint of arbitration proceedings through greater use of digital processes, reduced paper consumption and specialized tools to assess the carbon impact of hearings, with Akinci noting the center's specific initiatives to use greener materials and establish an arbitration forest through sustained tree planting campaigns.