Revue - Les Cahiers de l'Arbitrage N°3 - 2024 - 30

ARTICLES - DEBATES
4. Consequences of a Violation of the EU AI Act
The EU AI Act imposes general guidelines for penalties to be imposed on actors
violating their obligations. 95
to administrative fines of up to EUR 15 million, 96
An actor who fails to comply with the Act can be subject
or, if the actor is an undertaking,
a fine of up to 3% of its total worldwide annual turnover for the preceding financial
year. 97
These fines are implemented by the EU Member States, who have an
obligation to report to the Commission the fines they issue every year. 98
Supplying
incorrect, misleading or incomplete information to the competent authorities or
notified bodies is also subject to administrative fines, of up to EUR 7 million or, if
the offender is an undertaking, up to 1% of its total worldwide annual turnover for
the preceding financial year. 99
A further consequence of a violation of the EU AI Act is that it may qualify as
a violation of public policy, such that an award rendered in violation of the EU AI
Act could be denied recognition and enforcement under Article V(2)(b) of the New
York Convention. As a general rule, the " public policy " exception under Article
V(2)(b) is narrow, in line with the pro-enforcement approach of the New York
Convention. 100
With respect to violations of EU law, the Court of Justice of the
European Union ( " CJEU " ) held in its seminal Eco Swiss decision that only violations
of those norms of EU law qualify as public policy that " constitute[] a fundamental
provision which is essential for the accomplishment of the tasks entrusted to the
[EU] and, in particular, for the functioning of the internal market. " 101
Whether the
CJEU would elevate provisions of the EU AI Act - for instance those prohibiting a
delegation of legal decision-making to an AI system - to that level remains to be
seen. In circumstances where the EU AI Act itself considers human decision-making
a " fundamental right " , and Article 47 of the Charter of Fundamental Rights of the
European Union guarantees fair legal decision-making, it does indeed appear likely
that certain violations of the EU AI Act qualify as violations of the public policy of
EU Member States.
C. Impact of the EU AI Act on International Arbitration
It follows from the above considerations that the EU AI Act is likely to apply
to international arbitration with an extensive territorial reach. This broad scope
of the EU AI Act is, however, counterbalanced by the fact that the obligations
imposed on arbitrators and arbitral institutions are likely to be limited, provided
they use AI systems responsibly. Such responsible use of AI systems is unlikely to
qualify as " high-risk " or as posing a " systemic risk " . Instead, the general use cases
95. EU AI Act, at Article 99.
96. EU AI Act, at Article 99(4).
97. EU AI Act, at Article 99(4).
98. EU AI Act, at Article 99(8), (9) and (11).
99. EU AI Act, at Article 99(5).
100. Andrea Bonomi, The Concept of Public Policy under the 1958 New York Convention:
An Autonomous Interpretation?, in Franco Ferrari and Friedrich Jakob Rosenfeld (eds), Autonomous
Versus Domestic Concepts under the New York Convention, 61 International Arbitration Law Library
(2021), at pp. 315, 330.
101. CJEU, Case C-126/97, Eco Swiss China Time Ltd v. Benetton International NV, at para. 36.
672
The Paris Journal of International Arbitration 2024‑3
Revue - Les Cahiers de l'Arbitrage N°3 - 2024

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