Justice delayed is justice denied - William E. Gladstone

The Indian Judiciary faces a heavy load of pending cases, leading to delays in justice administration and high litigation costs, eroding public trust in the system. In response, Alternate Dispute Resolution (ADR) has gained prominence, shifting focus from traditional litigation methods. Online Dispute Resolution (ODR) emerged alongside e-commerce, allowing disputes to be resolved outside of courts. ODR encompasses arbitration, mediation, and negotiation, offering efficient resolution without court intervention. With globalization, ODR is increasingly recognized and implemented. This article explores key aspects of ODR, including its definition, available resolution types, and recent legal developments in this evolving field.

Keywords: ADR, ODR, Court, e-ADR, Dispute

Introduction:

The operational constraints of the courts have resulted in a backlog of cases, prompting the initiation of 'online hearings' for select matters of significance. In the case of State of Maharashtra vs. Dr. Praful B. Desai, the Supreme Court sanctioned the utilization of video conferencing for recording witness statements, enabling online submissions and proceedings. In pursuit of uniformity, guidelines established by the International Chamber of Commerce mandate agreements on time zones, document formats, and other procedural aspects. The ADR mechanisms namely Arbitration, Mediation, Conciliation and Lok Adalats are seen as a solution to the issues plaguing India’s traditional court system, though successful in parts, has failed at a larger scale.

Furthermore, the COVID-19 pandemic and associated requirements for social distancing have compelled all aforementioned dispute resolution methods to curtail their operations, thereby compounding existing challenges. The path forward necessitates the evolution of the dispute resolution framework to accommodate evolving justice demands through contemporary technological applications. Leading this global transformation is Online Dispute Resolution (ODR) or electronic Alternative Dispute Resolution (e-ADR).

Recently, NITI Aayog, in collaboration with Agami and Omidyar Network India, convened a virtual gathering of principal stakeholders to promote the advancement of Online Dispute Resolution (ODR) in India. The focal point of the meeting centered on forging a multi-stakeholder consensus aimed at concerted efforts to enhance the ODR landscape in the country.

Additionally, Mr. Amitabh Kant, CEO of NITI Aayog, has expressed that "India stands at a juncture of transformative advancement through the integration of Technology in the Judicial System, guided by innovative leadership from our Supreme Court. The Government is dedicated to fortifying the Alternative Dispute Resolution System and Online Dispute Resolution, aimed at alleviating the workload of our Courts, enabling them to concentrate on more intricate cases."

What is ODR:

According to Ethan Katsh, the founding father of ODR, “online dispute resolution is dispute resolution that's supported, facilitated, helped by the use of technology.”

Kaufmann-Kohler and Schultz have defined ODR exclusively as “the use of ADR assisted principally with ICT tools, although part of the doctrine incorporates a broader approach including online litigation and other sui generis forms of dispute resolution when they are assisted largely by ICT tools designed ad hoc.”

According to UNCITRAL Technical Notes on Online Dispute Resolution 2016, “ODR is a mechanism for resolving disputes through the use of electronic communications and other information and communication technology”

ODR represents a dynamic concept leveraging ICT primarily for the resolution of disputes among parties. It encompasses diverse forms of ADR and integrates the Internet, websites, email communications, streaming media, and other information technologies within the dispute resolution framework. In ODR proceedings, parties may not physically convene. Each ODR method employs distinct technological systems aimed at enhancing the efficacy of the respective process. The foundational components of any ODR system are threefold: Convenience, Trust, and Expertise.

The following stakeholders can be recognized in ODR:

  1. two parties having the dispute;
  2. the independent third party (mediator, arbitrator, conciliator)
  3. the technology, referred to as a fourth party.

Signifying and emphasizing the critical role of technology in the ODR mechanism, the technology has been stated as the “Fourth Party”, something that can be important in both online and offline disputes.

Legal recognition of ODR in India:

Online Dispute Resolution (ODR) encompasses the utilization of Alternative Dispute Resolution (ADR) methodologies facilitated by Information and Communication Technology (ICT). ODR involves the application of information technology to conduct alternative dispute resolution, encompassing both electronic disputes and conventional disputes such as commercial or social disputes resolved through ICT.

In India, use of ADR techniques is explicitly encouraged through various enactments like

  • Lok Adalat under Legal Services Authorities Act 1987
  • Gram Nyayalayas Act 2008
  • Arbitration and Conciliation Act 1996
  • Commercial Courts Act 2015
  • Consumer Protection Act 2019

ADR is facilitated under Section 89 and Order X Rules 1A, 1B, and 1C of the Code of Civil Procedure, 1908, encouraging parties to adopt alternative dispute resolution mechanisms, including online dispute resolution, for resolving disputes.

The Information Technology Act, 2000, confers legal validity on transactions conducted through electronic communication methods, recognizes electronic signatures for authentication, facilitates electronic filing and storage of documents, and grants electronic records equivalent status to physical records. Moreover, the evidentiary significance of e-contracts is elucidated in Sections 85A, 85B, 85C, 88A, and 90A of the Indian Evidence Act, 1872, which establish presumptions regarding electronic records. Additionally, Section 65B pertains to the admissibility of electronic records, stipulating that any information within an electronic record stored, recorded, or copied on optical or magnetic media produced by a computer shall be deemed a document and is admissible as evidence.

Apart from this, the Arbitration and Conciliation (Amendment) Act 2015 has included arbitration agreements made by way of communication through electronic means, thus providing statutory recognition to online arbitration.

In the case of State of Maharashtra v. Praful B Desai:The Supreme Court approved the examination of witnesses through video conferencing. In the State NCT of Delhi vs. Navjot Sandhu case, the Supreme Court held that call records relating to cellular phones are admissible and reliable evidence; and electronic records were considered to be admissible as evidence in State of Delhi v Mohd Afzal.

 “when an effective consultation can be achieved by resorting 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”.

Finally, when the award is declared, as per Section 31 of Arbitration Act, it can be exchanged via emails by sending scanned copies. Later the original copy can be sent via post. This completes the procedure and therefore the only thing left is the enforcement of the award, a decree, which is easily obtained in the court.

Therefore, practicing ODR is perfectly valid in India. Moreover, it is currently being used by the National Internet Exchange of India (NIXI) for domain name dispute resolution. It is similar to traditional arbitration but the only difference is that it is conducted with the use of the internet. Therefore, the law applicable to ADR is to be applicable to ODR also. Just as ADR is legal in India, so is ODR.

Methods of ODR:

The following are most common and prominent methods of dispute resolution employed in ODR:

  1. Blind Bidding or Automated Negotiation: The parties sequentially input a monetary amount into a computer as a settlement proposal. Subsequently, the software compares the offer and demand, ultimately determining a settlement based on their arithmetic mean. This blind bidding method can be integrated with online mediation, representing an innovative approach within ODR. It is particularly well-suited for resolving monetary claims where liability is uncontested, focusing solely on determining the amount of damages to be paid.
  2. Assisted Negotiation: The parties engage in communication via the internet, employing tools such as emails, web-based platforms, or video conferences. Initially, each party presents their initial position without making demands, outlining their underlying interests. The software impartially lists all issues, whether qualitative or quantitative. The parties then proceed to clarify their underlying interests, prioritize each issue's relative importance, and consider aspects such as expectations from litigation and understanding their Best Alternative to a Negotiated Agreement (BATNA).
  3. Online Mediation: The mediator facilitates the parties' negotiation of their dispute utilizing electronic communication methods such as email or dedicated websites featuring virtual rooms for online interaction. An Internet Neutral or Mediator enables parties to choose among various online mediation options, including email, instant messaging, chat conference rooms, and video conferencing.
  4. Online Arbitration: It mirrors the conventional offline fact-finding and decision-making procedures of arbitration, employing Information and Communication Technology (ICT) for communication and information handling. Presently, many ODR providers enable parties to conduct certain phases of the arbitration process online, such as downloading claim forms, submitting documents via standard email or secure web interfaces, and participating in telephone hearings. A significant challenge arises when judicial enforcement becomes necessary, potentially undermining the original intent of an online process.

Platforms of ODR:

Recently, there has been a notable transition in dispute resolution patterns, marked by the increasing availability of operational ODR platforms in the country. These platforms facilitate specific forms of dispute resolution for numerous national and international companies. By integrating modern technology with established ADR processes, ODR platforms have rendered the resolution process both feasible and convenient in terms of time.

1.SAMA

Endorsed by the Department of Justice, SAMA endeavors to swiftly and efficiently resolve disputes between consumers and businesses, employers and employees, as well as landlords and tenants. They employ online methods that are both expeditious and cost-effective. Additionally, ICICI utilizes SAMA to resolve approximately 10,000 disputes, involving amounts as high as INR 20 lakhs.

2.CADRE: The Centre for Alternate Dispute Resolution Excellence (CADRE) offers alternative dispute resolution services, specializing in peer-to-peer and small-scale disputes of low value. These services utilize streamlined procedures, a technological platform, and arbitrators certified through training. CADRE also handles online arbitration, debt recovery, and resolves disputes related to tenant and rental contracts for NestAway, a web-based home rental startup. All procedures adhere to the Arbitration and Conciliation Act, 1996.

3.Presolv360

Focused on resolving commercial disputes, Presolv360 operates as a legal-tech online platform. They position themselves as a contemporary digital solution to traditional dispute resolution laws, offering arbitration and mediation services.

4.Law Wagon

They offer ODR services primarily for matters related to IBC and commercial disputes. However, fees apply for all time expended on the legal case, encompassing meetings, hearings, and consultations with counsel outside of formal proceedings.

5.Other institutions offering  ODR services

Following the onset of the pandemic, all major arbitration institutions have introduced new rules. These institutions include LCIA, SIAC, HKIAC, ICC, ICSID, and other prominent global arbitral bodies. The ICC guidance note has been instrumental, offering a checklist and a draft procedural order that is valuable for the entire dispute resolution community. In India, significant organizations promoting ADR and ODR services include CIAC, CIDC, ICA, ICADR, ICC (Indian Chamber of Commerce), Bengal Chamber of Commerce and Industry, among others.

Disputes which can be resolved through ODR:

1. All cases associated with trade, commerce, and contracts, including disputes arising between

  • Contracts (including money claims)
  • Specific performance
  • Suppliers and customers
  • Bankers and customers
  • Developers/builders and customers
  • Landlords and tenants/licensor and licensees
  • Insurer and insured

2. All cases arising from strained or soured relationships, including disputes related to

  • Matrimonial causes, maintenance, custody of children;
  • Partition/division among family members/coparceners/co-owners
  • Partnership among partners.

3. All cases where there is a need for continuation of the pre-existing relationship in spite of the disputes, including disputes between

  • Neighbors relating to elementary rights, encroachments, nuisance, etc.
  • Employers and employees
  • Members of societies/associations/Apartment owners Associations

4. All cases associated with tortious liability including claims for compensation in motor accidents/other accidents

5. All consumer disputes including disputes where a trader/supplier/manufacturer/service provider is very keen on maintaining his business/professional reputation and credibility or 'product popularity

Conclusion

Online Dispute Resolution (ODR) holds significant relevance in today's tech-driven world. In India, ODR is in its early stages but is poised for widespread adoption. However, the lack of access to reliable, affordable computer and internet connections, essential for online arbitration, poses a challenge. India's uneven technological infrastructure hinders a proactive approach to online arbitration and mediation.

Despite these challenges, ODR is gradually gaining recognition in India, albeit at an early developmental phase. Legislative efforts in e-governance, e-commerce, and arbitration under the Arbitration and Conciliation Act, 1996 underscore the evolving landscape of dispute resolution in the country. Regarding ODR, the Techno Legal Center of Excellence for Online Dispute Resolution in India (TLCEODRI) has launched an advanced ODR platform version aimed at facilitating dispute resolution for national and international stakeholders alike.

Mr. Amitabh Kant emphasized the need for collaborative mechanisms in dispute resolution post-COVID, particularly for small and medium value disputes, reducing reliance on courts. He highlighted the importance of a variety of ADR and ODR solutions, affirming efforts to strengthen them. India is progressively moving towards embracing online arbitration, marking a promising trajectory for future adoption despite its current nascent stage.