This Article is written by Aakansha Gupta.

To cope up with the progressing advancement of the Indian economy, coupled with a lot of commercial international disputes “Online Dispute Resolution” has been an emerging trend for resolving matters through online mode of communication without geographical limitation and in a cost-effective manner. This article particularly focuses on ODR being a developing fashion for reaching towards a solution for disputes. This article also traces the long history of ODR and how previously disputes were solved. This article highlights the key important areas of ODR like online arbitration, mediation and negotiation. It also states the potential of ODR in India and how it can be called as a “New Way Ahead” for Indian legal system. 

There are many advantages mentioned in this paper of this mechanism being easy, less formalities, less paper work, less complex and umcomplicated procedure. This article states the importance of ODR in remote area where there are no courts and no facilities to conduct litigation, but they have smart phones so through this resolving matters can be done. The new trend and practise of E-Commerce has become prevelant among the business community. Various supply giants have emerged like Amazon, Flipkart etc., which provide home delivery of services and various goods and services. Many companies are also seen preferable to conduct their business in an online e-contractual basis. With such developments, the need to resolve the disputes emerging from the contracts has been increasingly felt. The traditional court mechanism of dispute resolution does not provide such flexibility to the parties of the dispute.

Introduction

With the rapid growth of International trade, there is higher growth of settlement of international disputes, through online mode ‘Online Dispute Resolution’ (‘ODR’) has originated as a new concept nationally and internationally. The use of ODR in India is at an inceptive stage and has starting to gain prominence slowly. With rising of e-commerce market, a need was felt for redress the disputes of the consumers online. It has made a great impact on commercial life while increasing competition throughout the world. It has also developed a concerned for protection of rights and parties.

It is also called Alternative Dispute Resolution(‘ADR’), it basically uses the internet as an interface to resolve disputes. It is basically an improved version of ADR components like arbitration, mediation, conciliation and negotiation. The use of these online techniques that they are very cost-effective and rapid dispute resolution process. It is also termed as an unparalleled convenient and uncomplex system

It helps in submission of pleadings through email, video-conferencing for case hearings, issuing a judgement at the end of proceedings (WIPO) [1]etc. Though Online dispute resolution is a mechanism that is a step forward then the fast–track dispute resolution. This has been introduced in matrimonial and mediation matters. In other words, it means that settlement of disputes with the assistance of technological related laws.

Evolution

ODR can be traced back form the early 1990’s, as it has a long history coupled with set of events. As it seemed obvious to anyone that were there is buying and selling of goods or services, there will be unsatisfied consumers and many disputes regarding the same will prevail, as these disputes are prevalent in the physical world.

“In ancient times, people often voluntarily submitted their disputes to a group of wise men of a community called the Panchayat for a binding resolution. Modern arbitration law in India was created by the Bengal Regulations in 1772, during the British rule. The Bengal Regulations provided for reference by a court to arbitration, with the consent of the parties, in lawsuits for accounts, partnership deeds, and breach of contract, amongst others. Until 1996, the law governing arbitration in India consisted mainly of three statutes: (i) the 1937 Arbitration (Protocol and Convention) Act, (ii) the 1940 Indian Arbitration Act, and (iii) the 1961 Foreign Awards (Recognition and Enforcement) Act.” [2]

The 1940 Act was basically the general law governing arbitration in India along the lines of the English Arbitration Act of 1934, and both the 1937 and the 1961 Acts were drafted to enforce foreign arbitral awards. The government enacted the Arbitration and Conciliation Act, 1996 in an effort to update the obsolete 1940 Act. The 1996 Act is an extensive piece of legislative modelled on the lines of the UNCITRAL Model Law[3]. This Act repealed all the three previous statutes (the 1937 Act, the 1961 Act and the 1940 Act). Its preliminary objective was to encourage arbitration as a cost-effective and quick tool for the settlement of commercial disputes. The 1996 Act covers both domestic arbitration and international commercial arbitration.

Originally, ADR was meant for resolving disputes without litigation. The need and use of ODR was evidenced from the invention of internet in 1969. In the first few years there were relatively few disputes and were settled informally. Dispute resolution, at the time, was assumed to require a face to face meeting, whether in or out of court.

Though, ODR means settling matters with aid to technological laws, that does not mean it has drifted apart from the provisions of Arbitration and Conciliation Act, 1996[4]. Both the traditional Arbitration Act as well as the technology laws is applicable to the online arbitration.

A collective interpretation of various provisions and rules of Arbitration and Conciliation Act, 1996, Information Technology Act, 2000, and Indian Evidence Act, 1872 provides for settlement of disputes through ADR and applicability of the same in an online environment. However, these laws does not still give recognition to ODR.

“Agreements wherein the parties agree to resolve the dispute through emails is considered to be valid as well as enforceable as the validity of such agreements have been upheld by the Supreme court of India in the suit of “Shakti Bhog foods Ltd vs. Kola Shipping Ltd[5]” and “Trimex International FZE Ltd. vs Vedanta Aluminium Ltd[6]”. Moreover, such agreements are admissible as evidence as per section 5 of the Information Technology Act, 2000.”[7]

Areas Under Online Dispute Resolution

Online Dispute Resolution

Online Arbitration

In this system the parties registes themselves with an online site or with an organization which hear both the parties and then taking into the consideration the relevant arguments and presented evidence they pronounce the verdict. This whole procedure is carried out by online medium.

Online Arbitration is the most efficient process in which for example there are two parties, Party A is residing in Mumbai and Party B is residing in Karnataka and the Arbitrator is in Delhi. Without leaving their cities and seeing each other face to face they can easily resolve there dispute online, via use of ODR. So, basically for settling the dispute there are no geographichal constraints that need to be fulfilled. Online Arbitration is whole new tool which requires different internet forms to settle the matter like the use of internet web, email communications, media resolution.

In the leading case of ‘State of Maharashtra v. Dr. Praful B. Desai’, Hon’ble Supreme Court held that video-conferencing could be restorted to for the purpose of taking evidence of a witness.[8]

These are the components of online arbitration-:

  • Firstly, there should be an arbitration agreement between parties in order to resolve the matter which should be in writing and can be made available through exchange of letters, telegrams or telecommunications etc. As per the Information Technology Act, 2000 the requirement of statutory recognition to electronic records and digital signatures need to be complied with.
  • Secondly, depending on the willingness of the parties the rules in the agreement are clearly recited regarding to opt for Online  Arbitration. The provisions governing the arbitral proceedings have to be expressly consented by both the parties. The hearing and examination of parties will take place through the mechanism of video conferencing.
  • Thirdly, an Arbitral award can be delivered through email sending scanned copies online and arbitrator can put in his digital signature to sign the award.The award should cite the reasons for the decision. For the enforcement of Arbitral award, the copy of it should be received through post and can be filed in the courts.

Online Meditation

It is the most reliable and accepted ODR platform till now, wherein two parties register themselves in any online site or with any organization which has there own trained set of mediators who then conduct the mediation process with help of online interface and try to reach to a settlement between the parties.

The parties involved make decisions regarding the duration and as they have the freedom to opt to have lawyers. After the completion of registration process and fulfillment of other requirements. The online mediation is a three-way video- conferencing between parties and an expert mediator, who is appointed by service provider. It is necessary for the service provider to appoint a mediator who is qualified neutral party with no prior association with any of the parties involved in the matter.

Online Negotiation

In this process the parties meet in order to settle a dispute. This is a method of dispute settlement which allows parties to control the process and the solution Many ODR services in this respect are “Blind-binding” services [9]This is a kind of auction mechanism designed to determine economic settlement for calims where there is no liability challenged, and where some or all information of player’s bids is hidden. Another form negotiation is “Double-binding” it is a method where two parties offer and demand are kept hidden during negotiation. It can be also termed as single monetary issues between two parties. Then the last set of automated negotiation is “Visual Blind Binding” it is basically a tradition double blind binding. Where in the process begins when two parties consent to negotiate, then optimistic proposals are exchanged which is well defined in negotiating range. Thus, the system then generates suggestions which fall within the negotiating ranges. These suggestions presented by parties should be remained anonymous Avoiding the face saving problem of accepting a suggestion made by another party It is a type of negotiation which can be applied to any number of parties and issues. Negotiation is also observed as the most successful outcome method of ODR.

Future of Online Dispute Resolution In India

Online Dispute Resolution

In the twenty-first century there many remote areas in India as well as across the world thathave no access to justice but they have access to other technical instruments, that can bring justice to there fingertips to each and everyone irrespective of there region. Encouraging techonolgy enabled dispute resolution will not only help litigants but improve efficiency of legal system of reducing the burden for the system of law in the country. Generally online disputes are majorly settled with the aid of advanced software system which automatically settle the dispute.This usually works in insurance claims and monetary disputes. But, it is undoubtably more effective and efficient approach then the most traditional methods for outside court settlement or for that matter litigation. The e-dispute institutional mechanism has gained public confidence and has provided an alternative for litigation in national courts in case of e-disputes wherein parties to a dispute, are often from different jurisdictions and the issue of jurisdiction itself becomes a point of preliminary objection. ODR also helps in solving cross-border disputes. The parties entered into an agreement including an arbitration clause providing that when the event of dispute arises between parties it shall be resolved electronically through arbitration or when the dispute arises they may agree to resolve it through ODR.

Conclusion

Nowadays, arbitration has emerged as a dominant and as widely accepted form of ADR. Since the Indian judiciary has failed to deliver justice rapidly, arbitration is openly welcomed.The lack of complexity in procedure makes arbitration hassle free and easy. Especially in the time of pandemic ODR has touched the sky reason being the urgent matters which had to be addressed and having an arbitral clause in there agreement have resolved there matters sitting at home without any hassle of travelling or for that matter submitting any kind of paper work. Analysing the situation from now ODR will be used as the only mechanism for settling matters in the near future as it mainly feasible and without any nuisance.


[1] World Intellectual Property Organisation, 1967

[2] S.Vivek; “Online Arbitration”; NLSIU Bangalore

[3] The UNCITRAL Model Law on International Commercial Arbitration (“the Model Law on Arbitration”)

[4] Arbitration and Conciliation Act, 1996, No. 26, Acts of Parliament, 1996(India)

[5] Shakti Bhog foods Ltd vs. Kola Shipping Ltd S.L.P.(C) No.16109 of 2007
[6] Trimex International FZE Ltd. vs Vedanta Aluminium Ltd ARBITRATION PETITION NO. 10 OF 2009

[7] Information Technology Act, 2000, No. 21, Acts of Parliament, 2000(India)

[8] State of Maharashtra v. Dr. Praful B. Desai AIR 2003 4 SCC, 601

[9] E. Thiessen et al ; “Rewarding Good Negotiating Behaviour with Smartsettle” ; ( 2019)

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