ADMISSIBILITY AND USE OF BLOCKCHAIN AND AI-BASED EVIDENCE IN ARBITRATION IN CENTRAL ASIA AND THE CAUCASUS

Introduction

The Central Asian and Caucasus region is uprising in technological advancements in various sectors. AI and Blockchain as emerging technologies has revolutionized legal landscape including modern dispute resolution. This article explores AI and Blockchain in Arbitration in Central Asian and Caucasus region from the evidence perspective. AI technology with the ability to mimic human intelligence is transforming every sector as days goes by, and Blockchain decentralized ledger technology is revolutionizing trust and transparency in digital transactions.

The regions of Central Asia and Caucasus provides immense scope with regard to arbitration rules due to its evolving phase .The economy of these region has seen significant rise in the past decade with increase in International trade and commerce which led to rise in trade disputes and need for effective dispute resolution. Hence integrating technologies like AI and blockchain with respect to evidence will increase transparency and precision.

Blockchain in Central Asia and the Caucasus

Evidence in arbitration places a great role by supporting claims and defenses leading to sooner conclusion. Hence it requires a higher amount of trust in technology for legal frameworks to adopt such technologies.

In Kazakhstan the government is already leveraging blockchain for public services. Similarly Uzbekistan’s National Agency for Project Management (NAPM) is integrating blockchain in issuance of licenses and certificates. An efficient technology like blockchain is capable of serving the needs of all parties and reducing conflict of interest regarding the existence and authenticity of evidence.[i] Central Asia and Caucasus diving into an era of significant economic and legal transformation has the potential opportunities to understand how these technologies can be utilized for evidence in arbitration. This enables faster dispute resolution and as growing economies, faster and efficient dispute resolution plays a major role in International trade.

AI in Central Asia and the Caucasus

In Central Asia countries including China and Azerbaijan is investing in AI research and development. Armenia has also shown interest by investing into AI startups by funding and creating a conducive environment for tech entrepreneurship.[ii]

AI can be used in process of determining the relevance and materiality of documents particularly in contexts such as e-discovery where large volumes of documents must be reviewed. AI-generated evidence can include a wide range of content, such as: Predictive AI models providing insights on future events, Biometric data for identification purposes, in transcription services converting audio into written transcripts.[iii] Predictive coding, a technology-assisted review process, is revolutionizing document review in arbitration. It has been used by several countries widely.[iv]

Challenges and Future Prospects

Incorporating AI into evidence comes with a new challenges in assessing its admissibility. This involves evaluating the reliability, transparency, interpretability, and potential biases in AI-generated content. While there have been instances of use of AI in assisting arbitration proceedings in China and Kazakhstan, there has been no specific mention of use of AI in evidence due to ethical concerns and transparency.[v] The role of human judgment remains crucial in determining the admissibility of AI evidence.

In case of Blockchain, China has a track record of using blockchain as valid evidence in court proceedings. In June 2018, the Hangzhou Internet Court of China became the first to accept blockchain-recorded evidence in the case of Hangzhou Huatai Yimei Culture Media Co., Ltd. v. Shenzhen Daotong Technology Development Co., Ltd. were Plaintiff had used blockchain for evidence preservation in connection with copyright infringement. It looked into the preservation methods that the blockchain service storing webpage snapshots, source code, and invocation and verifies the authenticity through hash values. The reliability of this evidence was upheld by the court, thus being a huge step towards the legal acceptance of blockchain.[vi]

Similarly, The Azerbaijani Internet Forum has proposed implementing blockchain in notary procedures for electronic documents and is planning to create something along the lines of a "mobile notary office" with smart contracts on public utility services.[vii] All this aims at enhancing the security and integrity of electronic records and transactions, hence fitting into the world tendency of blockchain adoption in legal contexts.

The major challenges faced by AI and Blockchain evidence is authenticity. Lack of technological knowledge can lead to misuse of the system. Also the provisions of evidence in arbitration laws in Central Asian and Caucasus countries have certain common loopholes and insufficiencies. The broad discretion given to arbitrators can lead to inconsistent decisions and unpredictability in handling evidence in absence of a regulatory framework.[viii] Cultural differences and traditional legal practices can influence the acceptance and presentation of evidence, leading to potential biases. Implementing and maintaining blockchain and AI systems in arbitrary processes require significant investment in technology and training as well.[ix]

To succeed in the implementation of these technologies, there is a need for comprehensive training for arbitrators on blockchain and AI technologies ensures that they can effectively use and assess these tools. Establishing clear standards and protocols for the use of blockchain and AI in legal proceedings helps maintain consistency and reliability.[x] Strengthening local arbitration institutions and developing clearer procedural rules for evidence handling shall aid better integration.

Conclusion

The admissibility of AI and blockchain generated evidence in courts requires a multifaceted approach. Incorporating AI and blockchain into the evidence assessment process in arbitration offers significant benefits in terms of efficiency and accuracy.[xi] Central Asia and the Caucasus can benefit from integrating these advancements, ensuring their arbitration systems remain effective and trusted in the digital age. By embracing blockchain and AI, the legal systems of Central Asia, China, and the Caucasus are leading the way in not just adopting new technologies but forging a future wherein justice will be as immutable as the codes underpinning it and as intelligent as the systems delivering it.

Reference:????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? ???????[i] Purdue Global Law School, “A Look at the Use of Blockchain Technology in the Arbitration Process” (Purdue Global Law School, May 19, 2023) <https://www.purduegloballawschool.edu/blog/news/blockchain-arbitration> accessed July 31, 2024

[ii] WIPO, “China Leverages the Blockchain to Advance the Development of ‘Smart Courts’” (WIPO Magazine , September 2022) <https://www.wipo.int/wipo_magazine/en/2022/03/article_0007.html> accessed July 31, 2024

[iii] Claire Morel de Westgaver, “Artificial Intelligence, A Driver For Efficiency In International Arbitration – How Predictive Coding Can Change Document Production” (Kluwer Arbitration Blog, February 23, 2020) <https://arbitrationblog.kluwerarbitration.com/2020/02/23/artificial-intelligence-a-driver-for-efficiency-in-international-arbitration-how-predictive-coding-can-change-document-production/> accessed July 31, 2024

[iv] Verma A, “Interplay between Blockchain Technology and Arbitration” (iPleaders, September 9, 2020) <https://blog.ipleaders.in/interplay-blockchain-technology-arbitration/> accessed July 31, 2024

[v] HERBERT SMITH FREEHILLS, “An Introduction to Arbitration in Central Asia” (Herbert Smith Freehills | Global law firm, July 22, 2024) <https://www.herbertsmithfreehills.com/insights/2024-07/an-introduction-to-arbitration-in-central-asia> accessed July 31, 2024

[vi] Pollacco A, “Blockchain Evidence and Courts – A Cross-Jurisdictional Analysis” (Blockgeeks, May 13, 2020) <https://blockgeeks.com/guides/blockchain-evidence/> accessed July 31, 2024

[vii] Pollacco A, “Blockchain Evidence and Courts – A Cross-Jurisdictional Analysis” (Blockgeeks, May 13, 2020) <https://blockgeeks.com/guides/blockchain-evidence/> accessed July 31, 2024

[viii] WAQAR M, “The Use of AI in Arbitral Proceedings” (2022) 37 OHIO STATE JOURNAL ON DISPUTE RESOLUTION 344

[ix] Chatterjee P, Singhania A and Sharma YS, “Technology and Artificial Intelligence: Reengineering Arbitration in the New World” (International Bar Association, December 20, 2022) <https://www.ibanet.org/tchnology-and-artificial-intelligence-reengineering-arbitration-in-the-new-world> accessed July 31, 2024

[x] Seng D and Mason S, “Artificial Intelligence and Evidence ” (2021) 33 Singapore Academy Of Law Journal 241

[xi] UNESCO, “How to Determine the Admissibility of AI-Generated Evidence in Courts?” (UNESCO, July 26, 2023) <https://www.unesco.org/en/articles/how-determine-admissibility-ai-generated-evidence-courts> accessed July 31, 2024