Towards Responsible AI in Construction Arbitration: Legal and Ethical Standards in India and Malaysia

Artificial intelligence (AI) in construction arbitration can enhance efficiency, lower costs and speed up dispute resolution. But this integration creates a fundamental legal tension between the “black-box” nature of AI systems and the statutory duty of arbitrators to provide human-reason awards. The study adopts a doctrinal legal research methodology to compare the regulatory readiness of the two jurisdictions for AI in construction arbitration, addressing a unique gap in the existing literature concerning emerging Asian economies like India and Malaysia. In Malaysia, interim statutory adjudication and commercial arbitration are clearly differentiated by their comparative parameters. The paper distinguishes between administrative AI tools and algorithms for decision-making and addresses major legal risks, including potential violations of due process, the ‘equality of arms’ and cross-border data protection limitations within the framework of Malaysian and Indian legal systems. Finally, the article synthesises comparative global practices from the EU, US and China to suggest a “Hybrid Governance Model”. This model balances soft-law institutional guidelines against hard-law statutory amendments in a systematic manner to safely embed AI into construction dispute resolution, all while rigorously safeguarding procedural fairness and arbitral enforceability.