My I2C sensor and my embedded processor do not agree on the logic level. So I need a level shifter. Normally I would put a pair of pull-up resistors on the SDA/SCL lines. With the level shifter in the middle, do I need to provide pull-up resistors on both side? Or can it be either side?
Neither side, in this case.
Reading the datasheet you supplied you'll see that device has 10kΩ pullup resistors integrated into it.
You don't need to add any.
For other implementations, it may be required to add a pullup to one or both sides. Always read the datasheet, the answers are usually there.