The decentralized AI arbitration protocol Kleros has faced scrutiny over "algorithmic bias" in a notable lawsuit. The case, centered on Kleros' blockchain-based dispute resolution system, raised concerns about potential biases in its crowdsourced juror model and smart contract algorithms. Critics argue that economic incentives for jurors, tied to Pinakion (PNK) tokens, may skew decisions, undermining fairness. The lawsuit highlighted challenges in ensuring impartiality and transparency in decentralized justice systems. Despite Kleros' aim to provide fast, affordable arbitration for digital disputes, the case underscores broader issues of integrating blockchain with legal frameworks. Kleros responded by exploring juror qualification disclosures to enhance trust. This case marks a pivotal moment for decentralized arbitration's evolution.