Who Resolves Disputes Between AI Agents? A New Legal Frontier Begins

Artificial intelligence has already transformed the way businesses draft documents, analyse contracts and automate routine decision-making. The next evolution, however, may prove even more significant.

Rather than simply assisting humans, AI agents are increasingly being designed to act independently. They can search for suppliers, negotiate prices, compare competing offers, execute purchases and complete transactions with little or no human intervention.

As this technology rapidly develops, one legal question is becoming impossible to ignore:

What happens when two AI agents enter into a dispute?

The answer may shape the future of commercial law, arbitration and digital commerce for decades to come.

AI Is Moving Beyond Assistance

Much of today's discussion around artificial intelligence focuses on generative AI platforms that help humans produce content or analyse information.

AI agents represent a fundamentally different concept.

Instead of responding to prompts, autonomous agents are capable of pursuing objectives independently. A business may instruct an AI agent to purchase software licences, negotiate freight rates or source inventory within a specified budget, allowing the system to make countless decisions without requiring approval at every stage.

As businesses increasingly adopt agentic AI, commercial transactions may soon occur between software systems acting on behalf of different organisations.

This introduces an entirely new category of legal relationships.

Every Commercial System Eventually Creates Disputes

History demonstrates that every new form of commerce eventually requires a reliable mechanism for resolving disagreements.

Traditional business disputes may arise from issues such as:

• breach of contract;
• delayed performance;
• defective products;
• pricing disagreements;
• payment failures; or
• conflicting contractual interpretations.

When those same transactions are carried out by autonomous AI systems, the disputes do not disappear.

Instead, the complexity increases.

Questions that once involved human negotiations may instead concern the behaviour of algorithms, automated decision-making processes and machine-generated contractual obligations.

A New Model of Digital Dispute Resolution

Recent developments in the legal technology sector suggest that innovators are already attempting to address this challenge.

One example is the development of decentralised dispute resolution mechanisms designed specifically for AI-driven commerce. These systems aim to provide rapid decisions for automated transactions without requiring parties to commence traditional court proceedings for every disagreement.

Although these initiatives remain at an early stage and do not replace national courts or established arbitration institutions, they reflect a growing recognition that conventional dispute resolution processes may not always be suited to high-volume, machine-to-machine commercial activity.

Whether these models gain widespread adoption remains to be seen.

Their emergence, however, demonstrates that the legal profession is already preparing for the next generation of commercial disputes.

The Legal Questions Are Only Beginning

As autonomous AI becomes increasingly involved in commercial decision-making, businesses and regulators are likely to confront difficult legal questions, including:

• Can an AI agent legally enter into a binding agreement?
• Who bears responsibility if an AI agent exceeds its authority?
• Can contractual mistakes made by AI invalidate an agreement?
• Who is liable if an AI negotiates terms that cause financial loss?
• How should evidence generated entirely by AI systems be evaluated?
• Can existing arbitration agreements adequately cover disputes involving autonomous software?

These questions have no universally accepted answers today.

As a result, legislators, courts and arbitral institutions worldwide will likely play an important role in developing the legal framework governing AI-driven commerce.

Arbitration May Become Increasingly Important

International arbitration has long been favoured for resolving complex cross-border commercial disputes due to its flexibility, confidentiality and ability to accommodate specialised subject matter.

Those characteristics may become even more valuable as AI-generated commercial relationships become increasingly common.

Rather than creating entirely separate legal systems for artificial intelligence, it is possible that existing arbitration frameworks will evolve to accommodate disputes involving autonomous technologies.

Future arbitral proceedings may involve technical experts analysing algorithmic decision-making alongside lawyers interpreting contractual obligations.

The legal principles may remain familiar, even if the technology continues to evolve.

What Does This Mean for Businesses?

While fully autonomous AI commerce is still developing, businesses should not assume these issues are purely theoretical.

Organisations implementing AI agents today should already be considering:

• governance policies for autonomous decision-making;
• contractual safeguards allocating liability;
• authority limits placed on AI systems;
• audit trails recording AI-generated decisions;
• cybersecurity protections; and
• dispute resolution clauses designed to address technology-related disagreements.

Early planning may significantly reduce legal uncertainty as these technologies mature.

Looking Ahead

The conversation surrounding artificial intelligence has largely focused on what AI can do.

The next phase will increasingly focus on accountability.

As autonomous systems begin negotiating contracts, completing purchases and making commercial decisions independently, the legal system must determine how disputes involving those systems should be resolved.

Whether through courts, arbitration or new forms of digital dispute resolution, one principle is unlikely to change: every commercial relationship ultimately depends upon legal certainty.

The technology may be new, but the need for fair, predictable and enforceable dispute resolution remains timeless.

Conclusion

The emergence of AI agents represents more than a technological milestone—it signals the beginning of an entirely new chapter in commercial law.

As businesses increasingly delegate commercial functions to autonomous systems, questions surrounding contractual authority, liability and dispute resolution will become central legal issues rather than academic debates.

Although existing legal institutions continue to provide the foundation for resolving disputes, the evolution of AI-driven commerce is likely to influence how contracts are drafted, how evidence is evaluated and how commercial disagreements are resolved in the years ahead.

For businesses embracing artificial intelligence, understanding these emerging legal challenges today may prove essential to managing tomorrow's commercial risks.

Al Kabban & Associates

For businesses seeking guidance, Al Kabban & Associates, with over 30 years of experience in UAE law and recognition by Legal 500, stands ready to help corporations build resilience against legal risks while ensuring compliance with local and international standards. For more information or to schedule a consultation, contact us at +971 4 453 9090 or visit www.alkabban.com. You can also follow us on social media for more updates on everything law related in the UAE: @Alkabban_Law

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