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Online Dispute Resolution – An Effective Mechanism or a Utopian Idea

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KnowLaw
Source – BambooHR

Even after being in an infancy stage of e-development, the so-called third world countries who are witnessing the wrath of the pandemic, are well aware of the fact that in this state of affairs where the alarming steps like social distancing and lockdown are the indispensable measures to contain the spread of Covid-19 unless the vaccine comes to market; for the continuation of working of each sector, we have only one option, i.e. adopting electronic infrastructure.

But in the case of the judicial sector, the traditional method itself has caused a backlog of 4.5 million cases pending in High Courts, 31 million cases pending in District Courts and 350,000 backlogs in the top 5 central tribunals etc., even though filing and hearing of cases are made online under the guidelines of Supreme Court, we cannot ignore the fact the judiciary is already clogged with tons of cases. The only solution for this situation is the implementation of ADR in an online platform, which also known as ODR. So, before we get into the practicality of this mechanism we should analyze it properly.

As earlier mentioned, Disputes Resolution is a very complicated affair for all stakeholders including Courts, Government, Companies, Individuals, International Organizations, etc. It is common where the conflict of law is involved as different countries may have different laws for dispute resolution and to trim down the hardships due to such disputes, many countries like US, India etc. have adopted a model code of conduct that was incorporated in their respective domestic laws. The only answer to this contemporary and complex scenario is ‘Online Dispute Resolution‘ or ‘ODR‘ which was devised to straighten out disputes from the arena of Courts and its trial puzzles, combining technology and Alternative Dispute Resolution (ADR) mechanisms. The ODR deals with the disputes that are settled over the internet which having been initiated in cyberspace but with a source outside it i.e. offline.

In cradle stages, Arbitration or ADR was intended as an alternative method to Court for various kinds of disputes but with time the method itself has become complex, expensive and outdated. ODR is a rapid, transparent and accessible option for many companies to resolve disputes online particularly those who have high volume and low-value cases.  It is evident from the Post Economic Reform Survey that India has shown significant growth in the volume of online transactions so no other position would be more convenient except to accept ODR as an efficient and effective method to resolve disputes.

 The story of implementation began after ‘United Nations Commission on International Trade Law’ (UNCITRAL) had adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985 and the UNCITRAL Conciliation Rules in 1980. Then General Assembly of the United Nations has recommended the implementation of the said Model Law and Rules in cases where a dispute arises in the context of international commercial relationships. Eventually, India has also infused these uniform principles and suggestions of Alternative Dispute Resolution in the Arbitration and Conciliation Act, 1996. The Act has provided for Alternative Dispute Resolution mechanisms such as Arbitration, etc. for national and international parties and the Ministry have also put forward certain steps for the healthy establishment of ODR mechanisms in the society through activities such as Legal Aid Awareness Programs, etc.

Reasons for Evolution of ODR

The following are the reasons behind the infusion of ODR in the Indian Judicial System:

  • Firstly, for drawing a limit line for the national courts and to give dominance to the will of the parties in establishing the procedure for the settlement of their disputes.
  • Secondly, for protecting the procedural fairness by providing a limited number of provisions, from which the parties could not agree to head off.
  •  Thirdly, for articulating the rules which advance arbitration, even if the parties have not ended up in an agreement.
  • Fourthly, in spite of the drawbacks linked with online arbitration, it is considered as one of the most significant mechanisms of resolving Business to Consumer (B2C) and Business to Business (B2B) disputes in this contemporary era.
  • Fifthly, these platforms have offered an easy and secured process of dispute resolution by combining the already existing process of ADR with cutting edge technology, making the process feasible and time convenient altogether. For example, CADRE or Centre for Alternate Dispute Resolution Excellence is a website based platform for ODR in which one party approaches the platform which then contacts the other party. If both the parties agree then an arbitrator is appointed and time-stamped intimations are sent through e-mails or WhatsApp. Usually, the parties do not meet face to face but they make contact electronically via video chats. The decisions that are legally binding draw closer within the time period of 20-25 days.

Challenges

Source – ThriveGlobal

Electronic communication is no substitute for the ability of face-to-face conversations to foster important process values of mediation.            

Joel B. Eisen, Are We Ready for Mediation in Cyberspace? 1998 BYU L. Rev. 1305, 1308 (1998).

When we come to its empirical aspects, we not only see the said advantages but also its obstacles or the challenges in its path of the application. Certain disadvantages had even culminated in grievous damage to the Judicial system as compared to the traditional mediation process or ADR. Even scholars like Joel Eisen observed that the practice of mediation cannot easily be reproduced in the online environment because ‘cyberspace is not a ‘mirror image’ of the physical world.‘ The following are challenges that we are facing in reality:

  • Arbitration proceedings have not been widely practised in India and we are still in the cradle in the case of spreading technology of access to internet connectivity in the remote villages which can slow down the welcoming approach towards ODR proceedings in the Indian milieu.
  • Infrastructural and institutional limitations curtail the rapid growth of ODR in almost all developing countries including India.
  • Online arbitration is never an answer to criminal matters and matrimonial disputes.
  • The ODR mechanism has not been able to inculcate trust and confidence amongst people for obvious constraints of technology, awareness and the apprehensive, cynical approach of people. The trust in such an uncertain electronic methodology can be developed only with time and experience.
  • It has limitations such as lack of physical existence and face-to-face interaction between the parties and these e-mechanisms are also deemed to be limited to resolve disputes of e-business and its transactions.
  • The lack of knowledge and training of lawyers has become one of the greatest obstacles in the acceptance of this Dispute Resolution Mechanism.

Conclusion

Hence, it can be concluded that even though ODR is in its stagnant phase in the third world countries such as India, there is a bright future for ODR and this electronic reform will also enable new possibilities that were previously unavailable such as the virtual simultaneous presence of all the parties without needing personal attendance at a particular place and time. In the near future, ODR will not only serve as a platform for quick disposal of cases but also as a platform for the generation of employment for thousands of arbitrators or advocates of any country.

Editor’s Note
In these times of digitalization where everything has become online-based, the judicial sector has also seen some remarkable changes in this regard. The Alternative Dispute Resolution mechanism has become an Online Dispute Resolution mechanism. In this article, the author states a few important reasons for the evolution and development of this ODR mechanism. Not only that, but the author also enlists a few major challenges faced in the implementation of this mechanism. The author concludes by saying that even though the ODR mechanism has its drawbacks, it is still better for resolving disputes in these trying circumstances faced by the whole world.

Submitted by Sivaganga