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ONLINE DISPUTE RESOLUTION (ODR) – THE FUTURE OF SOLVING DISPUTES

Authored by: Neha Jain

As the whole world is going through such a pandemic situation and it is far away from getting things back to normal in the near future. The administration of justice in India has its history of getting delayed and now coronavirus has made it even worse. Although steps have been taken by supreme court by filing cases online and hearing of cases online, one cannot neglect the fact that judiciary is burdened with tons of cases. An improvised and efficient way to resolve such disputes is required and for that the best way is to opt for

What is Online Dispute Resolution and its origin?

Online Dispute Resolution (ODR) is a process of settling disputes outside courts particularly small and medium value cases with the combination of digital technology and techniques of Alternative Dispute Resolution (ADR), such as negotiation, mediation and arbitration. ODR can help people resolve their disputes easily and it is affordable when compared to litigation.

Hon’ble Arthur M. Monty Ahalt (ret.) defined ODR as, ODR is a branch of dispute resolution which uses technology to facilitate the resolution of disputes between parties. It primarily involves negotiation, mediation or arbitration, or combination of all three. In this respect it is often seen as being the online equivalent of ADR.

According to Katsh and Rifkin, three important factors namely convenience, trust and expertise forms the essence of ODR.

It also involves various methods of resolving disputes such as, E-Negotiation, E-Conciliation, E-mediation, E-Arbitration and hybrid mechanisms such as Med Arb, fast track arbitration, conciliation- arbitration, etc. The parties may adopt either adjudicatory or non-adjudicatory process to have the decision binding or non-binding upon the disputed parties.

The concept of ODR has been in discussion since the mid 1990’s. Professor Ethan Katish was the leading researcher and developer of concepts of ODR. Till early 1990’s there was a ban upon commercial activity from the internet until 1992. After the ban was lifted by National Science Foundation, there was attack of online disputes and there were no organised online dispute institutions. In the year 1996, National Centre for Automated Information Research sponsored a conference on ODR, which led to funding of three experimental projects. First one – the Virtual Magistrate project aimed at resolving disputes between internet service providers and users. Second one- The University of Massachusetts Online Ombuds Office stressed upon the internet disputes generally. Third one- The University of Maryland proposed to see if ODR could be employed in family disputes where parents were located at a distance. Between the year 1997-1999 Professor katish mediated a variety of disputes online which involved domain name, trade mark issues, other intellectual property conflicts. Now there are over 40 Internet companies listed on the ODR.info site that provide ODR online services. In the past half-decade, India has seen significant growth in online transactions, no other position would be more convenient to accept ODR as an effective mechanism to resolve disputes and hence implement a fast and fair dispute resolution system. In the case of State of Maharashtra v. Dr. Praful B. Desai (2003) 4SCC 601, ‘the Supreme Court of India established that the Video conferencing is an acceptable method of recording evidence for witness testimony’.

In Grid Corporation of Orissa Ltd. vs. AES Corporation 2002 AIR SC 3435,  the Supreme Court held- “when an effective consultation can be achieved by resort to electronic media and remote conferencing, it is not necessary that the two persons required to act in consultation with each other must necessarily sit together at one place unless it is the requirement of law or of the ruling contract between the parties”.

Procedure for ODR

Theprocedure for filing of ODR entails filing of e-documents wherein the parties may use encryption or electronic signatures to safeguard the integrity of the documents and authentication of the transactions. usually, the parties seek the ODR service providers for appointment of neutral panel of judges or panellists to resolve disputes between them through online via internet. Parties to the dispute prefer a simple and a structured procedure which can be followed throughout. Institutions such as WIPO, SIAC, and ICC have an established reputation in resolving online disputes methods. By filing the complaint online, the complainant either seeks compensation for it or other remedies and the respondent if agrees to take part in the process gives his reply in detail regarding the disputed problem. The process may or may not involve oral hearing by use of teleconference or video conference. Sometimes, the dispute will be resolved by an automated software without the necessity of third party. ODR service provider serves function of an administrator and infrastructure provider and not a judge that decides the disputes.

Here are the six steps, how to file an ODR application for any dispute:

  • An online dispute can be raised by anyone, like a customer, a merchant for a particular transaction within a specific period of time. So, once the dispute is raised it will be notified to the other party and details of the claim will be given to opponent.
  • First negotiation will take place where all the disputed parties will communicate with each other and try to settle the dispute amicably by coming in to mutual agreement. The parties are once satisfied will close the dispute.
  • If any party who is not satisfied with the terms of the negotiated, may escalate the same within specified time span.
  • As soon as it gets escalated, the third party first understands the claim and asks for some documents which will support such claim. After all the documents being escalated, the concerned person tries to direct the discussion towards a common agreement and also provide for some suggestion as a part of the resolution process.
  • Once an agreement is reached, then the claim is closed and the third party freezes the documents to avoid any legal actions filed against them in future.
  • In case a disputed party is not satisfied with the claim, the party can re-open the claim within a specific time frame. Once reopened the process of arbitration may follow to settle the dispute.

In simple words, and according to International Domestic Arbitration Centre in India involves four basic steps while going for online arbitration process.

  • Issuing a notice to the parties to the dispute.
  • Appointment of arbitrators.
  • Completion of pleadings and hearings.
  • Award.

PROS and CONS of Online Dispute Resolution

There are several factors which leads that dispute resolution can be done online, whereas there are factors which states that there are few disadvantages for implementing online resolution for a disputed case.

The few advantages for gearing up online disputed resolution as a mechanism for a dispute.

Firstly, it is economically feasible, cost always plays a major role in dispute, as the parties tries to reach at an optimal decision with lower costs. ODR is the best alternative for meeting all the financial demands as all the documents are exchanged via E-mail, proceedings are taken place via video conferencing. So, the venue and accommodation to conduct the proceedings are eliminated and the documents need not be sent through post. Therefore, ODR is not only easier but it is significantly cheaper.

Secondly, it is speedy process, one of the main advantages of ODR when compared to conventional ADR is that it is less time consuming. While ADR takes several months to pass an award, ODR takes few weeks to pass an award for the disputed case. Further, the borderless nature of internet makes parties and counsels easy to communicate easily while sitting in different time zones. It is easy to access as e-mail helps for scheduling the ODR proceedings which avoids phone calls and fax-tags. As in this technological world internet is swifter and much easier to store data and documents of multiple parties which saves both time and money.

Thirdly, it is Non-confrontational mechanism, where there will be no physical appearance of the disputed parties ODR enables the adjudicating body to resolve the dispute purely on basis of the merits of the case. Since most of the arguments takes place through asynchronously over the internet, where it allows the disputants to reflect on their positions before giving their response. Furthermore, such a mechanism neutralises any economic or other power disparities that may obtain between the disputants, as there will be several instances where one of the parties might be small-time manufacturer and the opposite party might be a global entity. So, in ODR the counsel will discharge his duties without biased decision.

Fourthly, it can record the process of ODR for any purpose, ODR facilitates the process of recording the pleadings, statements, and written, oral or visual communications which rely solely on digital records

Fifthly, it can store the data, as storing of document is very difficult in Indian Courts which is replaced by ODR where data can be stored by the parties for future use of transmitting the documents or saving them.

There are few disadvantages while going for online resolution for any dispute.

Firstly, it can cause misunderstanding and there will be lack of human interaction, as there will be lack of face-to-face interaction it will deprive the adjudicating authority, an opportunity to evaluate the creditability of parties and witnesses. Furthermore, due to the nature of internet, there will be lack of miscommunication as the parties might be in different countries and speaking different languages.

Secondly, it has limited range of disputes, like ADR, ODR also is best suited for resolving disputes which is of certain type like domain name, e-commerce, etc. ODR may not be suitable for all kinds of disputes like tortious disputes like defamation, trespass which requires discovery, testimony of witnesses, cross examination which may not be possible via internet.

Thirdly, it does not have adequate confidentiality and secrecy is not maintainable, secrecy is the fundamental process of the dispute resolution. According to the ODR service providers there have been certain technological arrangements made in for protection of data of the parties, by installing various software. Though there are precautions taken for implementation process by the data protection law, it is still very dangerous when hackers try to commit an offence by disturbing such data. Thus, inherent data security will be a hindrance for the growth of ODR.

Fourthly, jurisdictional issues, when the dispute are resolved online, there is a question of what substantive law will be applicable for the dispute arising. In case of international arbitration, it will be important to distinguish four choices of law.

  • Merits of parties, contact and claim.
  • Parties to arbitration agreement.
  • Law applicable to arbitration proceedings.
  • Conflict of law rules applicable to each of forgoing law.

Fifthly, it has a problem of publication of proceedings and award, if ODR mechanism has been selected to discuss the disputed case, the details of the proceedings and decisions are to be made published show the level of transparency which is not possible in ODR as the sole reason to choose ODR is to maintain confidentiality of the proceedings. Thus, the fate of ODR hangs balance with the one school of thought which provides absolute secrecy of proceedings and other school of thought seeking publication of proceedings and decisions. So, the ODR providers, keep the information confidential and release that information if only the parties agree to do so.

There will be a problem of enforcement of awards and even challenging the award in the case of choosing online dispute resolution.

Future of ODR Post Lockdown

The national judicial data grid is a technology which monitors the Indian cases pending before the court, in that it reflects that around there are about 32 million pending cases with research it indicates an average wait time of about 17 years from start to finish.

While work from home is been revolutionised, during such a pandemic situation resolve from home should be taken into consideration and it has gained much greater place in the part of resolving disputes between the disputed parties.

The use of ODR as a platform is at a nascent stage and it has started to gain more importance day by day. Together with Arbitration and Conciliation Act, 1996, Information Technology Act, 2000 and Indian Evidence Act,1872 and with the interpretation of these acts not only makes ODR legally and technically viable, but also helps to overcome certain issues like jurisdiction, geographical barriers, and rather promotes eco- friendly processes which in turn delivers quick judgement and makes it very efficient for the parties.

The National Institution for Transforming India (NITI Aayog) held a virtual meeting with all the key stakeholders for the advancement of online dispute resolution in India.

Senior judges of the supreme court, leaders of the industry, legal experts have explored the opportunities lying in the field of ODR. During the meeting Justice DY Chandrachud said that artificial intelligence and blockchain have the potential to unlock disputes.

The law secretary, Anoop Kumar Mendiratta, pointed out that private ODR and ADR have to contemplate to ensure that online resolution can reach different industries, locations and various parts of the country.

There are various platforms under which ODR application can be made and get your dispute resolved.

  • CADRE or Centre for Alternate Dispute Resolution Excellence is a website-based platform for ODR. Where one party approaches the platform and then the other party is been informed about the same. If both the parties are satisfied then an arbitrator is appointed and timely all the information regarding the dispute is been sent to their E-mail or WhatsApp. Usually, the parties do not meet face to face but if they wish so they can via video conferencing. The decision are legally binding and comes within a span of 20-25 days. CADRE is been resolving disputes which are related to tenant and rental contract for NESTWAY which is an online home rental start-up.
  • NESTWAY, more than 75,000 people use for home rental purpose and after the pandemic disputes is been raising its peak related to refusal to pay rents. CADRE- which was founded by Shalini Saxena and Kanchan Gupta, the dispute is been taken through website-based platform.
  • SAMA is another ODR platform which facilitates easy access to high- quality ADR service providers and helps people to resolve disputes online. SAMA is founded by Pranjal Sinha, Akshetha Ashok and Vikram Kumar. SAMA is been used as an ODR platform by ICICI Bank to resolve nearly 10,000 disputes which are worth over 20 lakhs.
  • CODR or Centre for Online Dispute Resolution, Vikas Mahendra a partner with law firm keystone Partners, co -founded CODR. It positioned itself as an institution which will administer cases online from end to end.
  • AGAMI is a non- profit ODR platform which aspires to create better system of law and provide justice as it is efficient in time and feasible by everyone to opt.
  • Presolv 360 which is co-founded by Bhaven Shah, Namita Shah and Aman Sanghavi, provides services of resolving dispute which is commercial in nature.

The main reason to go for ODR (Online Dispute Resolution) is that after lockdown is lifted when courts starts working it will be very difficult for the courts to manage cases altogether as there is 1 judge for 58,000 people according to a source. Indian courts have lakhs of pending cases and it will be difficult to get your dispute solved in court. People during lockdown would have been well known with the available source of ODR or dispute be resolved online, they will go for ODR which is cost friendly, less time consuming and where the judgment is been given within few weeks of time. It will not only help people get their problems solved smoothly but also help the court by not over burdening with tons of cases. People should be made aware with all the resources available to them for getting their disputes solved in no time. The day is not so far where ODR as a way of Arbitration will soon become a necessity for the world. the future will have both offline courts, online courts and ODR. As the courts during the time are also functioning via video conferencing it is already paving way for a technological growth in delivering justice to the people. 

This disclaimer informs readers that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.

REFERENCES:

  • Niti.gov.in- Catalyzing Online Dispute Resolution in India – Published on 12th June 2020.
  • Online Dispute Resolution – A Step in the Right Direction – by Rohan Jhusiwala.
  • Virtualcourthouse.com – What You Should Know About Online Dispute Resolution- by Hon. Arthur M. Monty Ahalt (Ret.).
  • Online Dispute Resolution Process- Six Steps to get your Disputes Resolved faster, by Ankush Ghosal – Published on 11th January 2015.
  • Online Dispute Resolution (ODR)- A Positive Contrivance to Justice Post COVID-19, by Karan Singh – Published on 17th May 2020.
  • Online Dispute Resolution Mechanism – Prospects and Challenges in India, by Moghe.
  • Boosting Online Dispute Resolution in India, by Samaya Dharmaraj – Published on 9th June 2020.
  • Online Dispute Resolution is beginning to find takers in India, by Indulekha Aravind – Published on 12th January 2020.
  • Online Dispute Resolution: A possible cure to the virus plaguing the Justice Delivery System? by Bhaven Shah – Published on 22nd March 2020.
  • Is Online Dispute Resolution the need of the hour? by Shalvi Mehta – Published on 29th April 2020.
  • Online Dispute Resolution Mechanism: Expansion of Alternate Dispute Resolution Mechanism in India by Harshita Rajnish and Shreet Raj Jaiswal, Faculty of Law, Lucknow University- Published on 27th March 2018.
  • Online Dispute Resolution by Karnika Seth, Cyber law Expert and managing partner, Seth Associates.

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