Hypothesis: The Energy and Construction sectors dominate in international arbitration On the international arbitration stage, the energy and construction sectors have long held the spotlight. With their complex, high-value contracts and cross-border transactions, which often involve a political element, disputes in these sectors are well suited to adjudication by a neutral, international arbitral tribunal.  In this second report in a series of data sheets exploring arbitration topics as part of our ‘data driven disputes’ campaign we take another deep dive into the data to investigate whether our hypothesis was the whole “sector story”. Adopting a global perspective, we analysed institutional data to identify which sectors have experienced a surge in arbitrations, which have fallen by the wayside, and we queried whether specific regions have become arbitration hotspots for particular sectors. We also spoke to the institutions about which sectors they anticipate to be areas of growth in the coming years.    Research and methodology In order to conduct this analysis, CMS carried out desk research and qualitative interviews: Results The data clearly showed that, whilst energy and construction remain dominant in the arbitration world, that dominance is not universal. Indeed, other specific sectors are increasingly prominent for certain arbitral providers. For example, whereas construction takes the top spot in Dubai, the ICDR in the U.S. has seen an increase in technology arbitrations. Meanwhile HKIAC is enjoying a FinTech boom and Japan is seeing a gaming surge.  Various factors are likely to be behind this. The regions in which the institutions are based are likely to be relevant; construction has seen significant growth in the Middle East due to tourism and foreign investment, while in contrast the gaming industry is thriving in Japan, home to some of the biggest names in the sector.  Reputation and track record remain key. Banking and finance parties, for example, continue to look to the LCIA in light of its history of dealing with high-value and complex financial disputes. Customised rules also play a part; the ICDR’s tech­no­logy-spe­cif­ic clauses allow tech companies to tailor their arbitration process to suit the subject matter of their contract.  Looking to the future, there appears to be a cross-regional expectation that green energy cases will account for a significant number of disputes in due course. As we determined in our first report, there is clear scope for more specialist centres to emerge, with these centres coexisting with the more generalist institutions. We consider below how the existing institutions may try to adapt and evolve as a result.  Technology and AI Several of the institutions that we spoke to highlighted Technology as a sector that had experienced a recent uptick in cases and one that they expected to experience continued growth. The Vienna International Arbitration Centre (VIAC), for example, has seen ‘Technology’ knock ‘Commercial Contracts’ from the top spot, with 29.7% of cases relating to the Technology sector in 2022. Similarly, Technology is now number one for the International Centre for Dispute Resolution (ICDR) in the U.S. Interestingly, despite the extent to which the benefits, risks and regulation of artificial intelligence (AI) is currently dominating the public discourse, only one institution (the Korean Commercial Arbitration Board (KCAB) International) specifically highlighted AI to us as an area in which they anticipated seeing future disputes. KCAB International described the work they are doing internally to ensure they are up-to-speed on the developments for their consumers. We consider the approach of the institutions to AI in more detail in a future edition of this report.  

As a leader in dispute resolution, CMS has conducted a data-driven project to assess whether the number of arbitrations is decreasing and if there are trends that can be identified in this type of dispute resolution. We are publishing our findings in a series of six data-driven articles.

Hypothesis: The number of arbitrations is decreasing In recent years the arbitration press and conference circuit has spent much time reflecting on whether there has been a reduction in the number of arbitrations being filed. If true, such a trend would have major implications for commercial parties who would usually choose to include arbitration agreements in their contracts – as well as dispute resolution lawyers across the board – and would raise the question as to what forum parties are choosing instead. They may choose different institutions or seats of arbitration or may even move away from arbitration as their preferred forum for dispute resolution.The importance of this possibility led to CMS conducting its own investigation to test if this hypothesis is true. Are there trends? Has there been a decline in the numbers of arbitrations being filed? This is the first in a series of data sheets to explore this, and related topics, in detail. Research and methodology In order to conduct this analysis, CMS carried out desk research and qualitative in­ter­views:Al­though in recent years some institutions reported slight dips in the numbers of registered arbitrations, these have not been hugely significant and do not appear to indicate any long-term trends. The falls generally have been attributed to numbers settling back after spikes in 2020 and 2021 related to the COVID pandemic and other international geopolitical issues. Overall case numbers reached a peak of 8,200 cases in 2020 across our sample of institutions, falling back slightly to 7,800 in 2022, still comfortably above the 6,600 seen in 2017. 

The Life Sciences and Healthcare Sector is highly tech­no­logy-driv­en and an increasingly dynamic approach is taken when adopting busi­ness-crit­ic­al technologies. This sector’s above-average uptake in technology is reflected in its prioritisation of measures against IT failure. However, the sector is often underprepared for technology risks, with many businesses still not having processes in place to manage key risks despite current and future concerns around disputes arising from this area.This report is a deep dive into data first produced for the report Technology Transformation: Managing Risks in a Changing Landscape. This saw over 500 people surveyed from multiple industries across the world.Here we look in detail at the 75 respondents from the Life Sciences and Healthcare sector, and their perspectives on the risks associated with busi­ness-crit­ic­al technologies, including emerging tech­no­lo­gies.Down­load the Technology Transformation Life Sciences and Healthcare report now to read about:Drivers of technology adoption in the Life Sciences and Healthcare sectorNew risks emerging and traditional barriers to risk man­age­ment­Cur­rent technology risks in the Life Sciences and Healthcare sectorFuture risks, including IP concerns and AIPreferred approaches to technology dispute resolution for the Life Sciences and Healthcare sector

Digital transformation in life sciences is creating opportunities to counter healthcare’s most intractable problems from treating rare diseases to accelerating diagnostics and reducing treatment backlogs.But technological advances are outstripping legislative and regulatory frameworks giving rise to a landscape strewn with issues over data, privacy and IP, the recent CMS Global Life Sciences & Healthcare Forum 2022 heard.“Tech­no­logy change obviously brings with it risks in implementation and new uses of technology and new regulation and legislation brings new risk,” Jeremy Mash, partner at CMS London, told delegates.AI is a potent force in life sciences with machine learning and patient data opening up new opportunities to revolutionise healthcare and relieve systems bogged down by laborious processes and shrinking budgets.The advances are welcomed across life sciences and digital has been enshrined in most nation’s health system planning but some fundamental principles such as who owns or is responsible for patient data, new routes to treatments and the consequences of mistakes have yet to be fully tested.“There are situations where you can see that evolving into risk and legal problems,” added Jeremy. “There is increasing use of legislation in the space and there is concern about where it is going to lead. There are a lot of data issues about quite what the ‘black box’ is doing and you can see people starting to raise concerns about how their data is being used.“There is also a lot talk about who is liable if that AI does not work. Is it the person who implemented it or the person designed it?”CMS examined the emerging issues in its Technology Transformation report, which surveyed 510 senior counsel and risk managers across sectors and discovered a range of preparedness and safeguards.It identified that IP issues represent 65% of expected future technology disputes, observed Jane Hollywood, partner at CMS London and patent attorney. She said the existing risk management systems for identifying, analysing, reviewing, mitigating and monitoring IP risk may need stiff­en­ing.“It's one thing to have contractual obligations and training for your people governing how you protect your IP and not misuse third party IP,” she told the Forum, in Brussels. “But it's quite another to ensure that your procedures remain adequate while you're operating in a world of machine learning algorithms and AI facilitated decision making.”She added: “The IP system does not evolve as quickly as technology advances and therefore we can have challenges obtaining protection for new technologies. We've seen this very much with AI and digital health technologies where patent protection can be difficult to get.”She said that identifying ownership and capturing developments in a fast-moving sector where collaboration and joint ventures are common can also generate disputes.“Big Pharma is increasingly partnering with digital health companies for drug discovery and patient engagement and clinical trial automation and, again, there's a lack of clarity about who owns the data that's generated from these partnerships so this is also likely to lead to disputes in the future,” said Jane.To read the full survey, visit Technology Transformation report.

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