THE ICFAI UNIVERSITY, JAIPUR

SESSION: - 2019-20

Alternative Dispute Resolution's

ASSIGNMENT

"ONLINE DISPUTE RESOLUTION: PROSPECTS &

CHALLENGES IN INDIA"

Submitted By: - Submitted To: -

Lokendra Singh Panwar Assistant Prof. Mr. Vijit
B.A- LL.B (Hons.) III yr. Singh

ILS17205 ICFAI Law School

The ICFAI University, Jaipur
 ADR'S Assignment Online Dispute Resolution: Prospects & Challenges in India

ACKNOWLEDGEMENT

I express my deep sense of gratitude to my learned guide Assistant

Prof. Mr. Vijit Singh, for his valuable guidance, I am thankful to the
encouragement he has given to me in completing the project.

I am also thankful to respected Assistant Prof. Arun Singh (H.O.D),

ILS for permitting me to utilize all the necessary facilities of the
institution.

I am also thankful to all the other faculty members and staff as well
of my department for their kind co-operation and help.

Lastly, I would like to thank my classmates and parents for providing

me the moral support and encouragement.

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INTRODUCTION

The end of the twentieth century will have been the stage for a première that might come to be
considered a high point in the contemporary history of law. In January 2000, for the first time
ever, parties located in the four corners of the earth resolved international legal disputes
completely online. They did not meet, but exchanged documents, comments and evidence
under the vigilant “eye” of an arbitrator appointed by an institution that was itself located in a
different country.
The acceleration of change, increasing complexity of relationships, transactions and the
lowering cost of publication accompanied by disputes and in response, there is growing need
for the kinds of creative technology-assisted dispute resolution process.1
We are of course referring to domain name disputes arbitrated under the aegis of the dispute
resolution policy and rules2 of the Internet Corporation for Assigned Names and Numbers
(ICANN), and administered by eResolution. At the time, most lawyers could not imagine how
technology could be used to conduct either legal (such as arbitration of domain name disputes)
or para-legal proceedings (such as mediation) without the physical presence of the parties.
Their presence seemed necessary at all steps in the proceedings. In the legal imagination, the
behavioural grammar of disputes required that the parties or their lawyers see each other. We
will come back to this. Such reticence and doubt clearly did not stop the initiators of the
project3.

The best means of helping to establish an environment of trust on the Internet had to be found,
for trust is the cornerstone of increased legal certainty. It seemed that legal risk could be
reduced only if recourse were possible and sanctions enforceable when parties fail to fulfil
obligations generated by an electronic transaction. There being no recourse and, consequently,
no sanction would undoubtedly be the height of legal uncertainty. If it proved impossible for
law to reform situations detrimental to the legal interests of Internet users, there was a strong
risk that they would desert cyberspace.

1
Mohamed S. Abdel Wahab, Ethan Katsh and Daniel Rainey ( Eds.), Online Dispute Resolution: Theory and
Practice. A Treatise on Technology and Dispute Resolution at 13. Published, sold and distributed by Eleven
International Publishing, The Hague, Netherlands, available at: [Link] (Visited on 28th November
2017).
2
See [Link] (last visited on February 1, 2005).
3
Namely, professors Karim Benyekhlef, co-author of this book, and Pierre Trudel, Centre de recherche en droit
public, [Link] (last visited on February 1, 2005).

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MEANING OF ONLINE DISPUTE RESOLUTION: -

Hon. 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.4 According to Katsh and Rifkin, three
important factors, namely convenience, trust and expertise forms the essence of ODR.5

The terminology 'online dispute resolution' (ODR) can, on a prima facie screening, have two
connotations.
Firstly, it can be viewed as resolution of online disputes. That would mean resolution of online
disputes. It would include the solving of (by any means, either online mechanism or offline
method including court adjudication) disputes which essentially arises from an online
transaction. This would include a dispute like a defect in a computer software purchased online
through an auction Web site where the payment was made online through a credit card and the
software was immediately transferred to the consumer using the same online environment.

Secondly, ODR can be looked into from the perspective of method of solving of a dispute (be
the dispute be offline or online). This means that newer ways of solving a dispute are being
developed by making use of the online environment which can be applied to solve any kind of
disputes. ODR in this context would include online negotiation, online mediation, online
arbitration, online neutral evaluation, online peer jury, etc. The present chapter has focused on
ODR as a tool for solving of any kind of dispute and not in the sense of resolution of online
disputes only. Therefore, taking the method-based approach, ODR covers a variety of ways in
which a party, by making use of the 'online environment', solves its dispute or clash of interests.
Another concept to be borne in mind is the Online environment'. The word 'online' has been
popularly connected to the Internet that is to say, anything available on the Internet is available
'online'. However, in the context of ODR, the 'online environment' has a wider connotation in
terms of 'a set-up making use of technology and communication facilities'. It would include use

4
Hon. Arthur M. Monty Ahalt (ret.), What You Should Know About Online Dispute Resolution, available at:
[Link]
[Link]
5
Katsh E, Online Dispute Resolution: some implications have emergence of law in cyber space, Lex Electronica,
vol.10n.3,hiver/winter2006, available at: [Link]

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ADR'S Assignment Online Dispute Resolution: Prospects & Challenges in India

of telephone, fax, or e-mail facilities or any other mode available on the Internet or any other
information and communication technology which can be beneficially used to solve disputes.

COMMUNICATION MODES IN ODR-

One of the advantages of online environment over F2F environment is the availability of
various communication modes to a user. It becomes important to select the appropriate mode
to conduct the ODR process since different kinds of disputes require different types of modes.

1. E-mail
It is one of the most common and easiest ways of communicating today. It permits the sender
to not only send messages but also attachments like, text files, graphic files, audio/video files,
etc. The sender of the e-mail can send it to one or more persons using the "To:" or "CC:" option
or even send a copy to a third person without any knowledge to the first recipient of the e-mail
using the "BCC:" option. E-mail is useful for filing of pleadings, documentary evidence,
communication between the ODR institution and parties on administrative issues, etc. This
mode is also helpful when, in case of mediation or negotiation, the parties are unable to
instantly take decision. For example, in case of an online mediation of a matrimonial dispute,
a situation might arise where, due to family and social norms, one party, maybe the wife, needs
to consult her parents before she can answer back. In such a situation, interacting through e-
mail gives her sufficient time to think over the matter and also consult the elders of the family
before giving a reply.

2. Discussion boards
These boards are used when there are many persons wanting to give their views on certain issue
or issues. It might get a bit confusing to ascertain as to who is answering to who's query or is
dealing with which issue if all merely follow the e-mail system. Discussion boards are a
collection of messages from different people at the same place so that one can, at a single
glance, view the entire discussion. However, this kind of communication too poses a problem
specially if there are multiple issues with multiple parties involve.

3. Instant messaging

As the name suggests, it instantly sends the message to the recipient. In this mode, the persons
who are sending messages are all online and connected to each other through a common Instant

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Messaging system like MSN Hotmail or Yahoo or Rediff. They can open a common window
on which they can have a discussion and can even open up separate individual windows to talk
to one or more persons privately. Messages are sent and received immediately. This mode is
suited to ODR systems like online mediation where the mediator and both the parties can have
a joint discussion. However, if the mediator wishes, he can also have a private session or caucus
with a single party, of course, after informing, snu taking permission from the other party.

4. Audio conferencing
The purpose of audio-talk is to enable the users communicate in real-time. As one speaks, the
other person can hear. With the help of advanced telephonic technology available, we can have
audio conferencing with more than two persons talking and listening at the same time, or a
group of individuals on either side having a discussion. It is useful for negotiations, mediations
and arbitrations. The mediator or the arbitrator can discuss the matters over phone with the
parties or the parties themselves can talk with each other during the process of negotiation.

5. Video conferencing

Video conferencing is the best mode for ODR. Combining the advantages of audio and visual
facilities, it is only one which goes somewhere near the F2F environment. This is not to suggest
that an online environment attempts to replicate the F2F environment. This mode enables the
players of the system to see and listen the others at the same time and also able to respond. This
mode is particularly useful in case of oral arguments. The problem, however, at present is of
lack of required bandwidth to be able to have a smooth and uninterrupted video conferencing.

SHADOW OF LAW: -

Apart from various sources of international arbitration law, such as the European Convention
on International Commercial Arbitration 19616 and Inter-American Convention on
International Commercial 1975 supplemented by Inter-American Convention on
Extraterritorial Validity of Foreign Judgments and Arbitral Awards 1979, EU Directive on

6
European Convention on International Commercial Arbitration, United Nations, Treaty Series, vol. 484, No.
7041 (1963-1964) entered into force in 1964

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electronic commerce, institutional rules and private contractual agreements, at international

level, there are two main sources.

1. New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards,
1958
2. UNCITRAL Model Law on International Commercial Arbitration and Conciliation Rules.

At domestic levels in ancient, when there were no courts of law in India disputes were resolved
by elder member of family, Sarpanch of Village or by Kulas, Srenis, Phugas or Parishadas.
During British Empire, various laws were enacted to promote arbitration such as Madras
Presidency Regulation Act, Bombay Presidency Regulation Act, and The Charter Act 1933.
But the historical step was taken with enactment of Indian Arbitration Act 1940, which was
solely based upon English Arbitration Act. It dealt with mainly domestic arbitration.

[Link] Constitution of India:

After the independence, Constitution of India was adopted, wherein, Article 21 declares that
no person shall be deprived of his life or his personal liberty except according to procedure
established by law. And the procedure must be “reasonable, fair and just.” 7 Supreme Court of
India in landmark case8 held that right to speedy trial is part and parcel of right to life or
personal liberty.

ii. The Code of Civil Procedure, 1908:

By Civil Procedure Code Amendment Act 1999, Section 89 (Settlement of Dispute outside
Court) and Rules 1A to 1C, Order10 (Direction of Court to opt for any one mode of ADR after
first hearing of suit) were inserted which has made it incumbent upon courts where there exists
elements of settlement to call upon the parties at their option to agree for one or other ADR
methods.

iii. Arbitration and Conciliation Act, 1996:

7
Maneka Gandhi v. U.O.I, AIR 1978 SC 597.
8
Hussainara Khatoon (1) v. Home Secretary, State of Bihar (1980) 1 SCC 81

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The Act has been enacted on basis of UNCITRAL Model Law on International Commercial
Arbitration, 1985 and Conciliation Rules, 1980 with an important feature to harmonize the
concept of Arbitration and Conciliation of different legal systems of the world and to have its
universal application.9 The main object of act is to encourage settlement of dispute amicably
via Arbitration, Conciliation at domestic and international level. It permits Mediation,
Conciliation or other procedures during arbitral proceedings to encourage settlement of
disputes.[22] Act also gives settlement agreement reached by parties as a result of proceedings
the status of court judgment under section 73 of this Act. Recently, Arbitration and
Conciliation (Amendment) Act, 2015, gave legal recognition to Arbitration Agreement entered
into by communication through electronic means, which is a positive initiative towards the
promotion of ODR in effective manner.

iv. Information and Technology Act, 2000:

The concepts of writing and signature have been recently significantly modernized to provide
greater certainty to online contracts and thereby facilitate e-commerce. The most important
step to this end was taken on international level by adopting the UNCITRAL Model Law on
Electronic Commerce in 1996. Then, UNCITRAL Model Law on Electronic Signatures 2001
was adopted. Those legislative changes resulted in “a global reform of writing requirement”10
The Information and Technology Act, 2000 being based on UNCITRAL Model Law of e-
commerce was enacted in India to facilitate e-commerce and gives legal recognition to e-
transactions. Section 4, 5, 10-A, 11-15 of the Act reflects the legal recognition to electronic
records and signature.

v. Indian Evidence Act, 1872:

What if the agreements entered into through e-communication are not admissible as evidence
in courts of law? For this purpose Section 65-A and 65-B were inserted which has made

9
Justice Dr. B.P. Saraf and Justice S.N. Jhunjhunwala, Law of Arbitration and Conciliation, 5th Edition 2009
published by Ketan Thakkar for for Snow White Publications Pvt. Ltd. at 11.
10
Hörnle, “Online Dispute Resolution: More than the Emperor’s New Clothes”

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electronic evidence as secondary copy to be admissible in courts of law subject to the

satisfaction of requirements mentioned in section 65-B.

STRENGTHS & CHALLANGES: -

STRENGTHS:
ODR has number of advantages over traditional courts system where parties have autonomy
over proceedings. Such as:

i. Time and Cost Management:

ODR obviates the need for travelling and substantially reduces cost. It allows for better time
and cost management, greater flexibility in procedure and more creative solutions.

ii. Flexible and Informal:

ODR promotes speedy resolution in flexible and informal manner if compared with rigid
court procedure followed since ages.

iii. Trust and Confidence:

ODR enhances trust and confidence in e-commerce environment due to its speedy access to
justice, flexibility, time and cost management which promotes e-commerce and overcomes
geographical barriers.

iv. Asynchronous communication:

The asynchronous Internet communications have advantage of being edited in contrast to

impulsive responses that often can take place in real time face-to-face mediation discussions.

v. Communication through Videoconference:

Lodder and Zeleznikow argued that it can happen for disputes in which the emotional
involvement of the parties is so high that it is preferable that they do not see each other. It has
been taken as the most significant disadvantage of ODR due to lack of face-to-face
communication. But it’s been argued that videoconferencing is an “obvious solution to the

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lack of face-to-face encounters” in online dispute resolution.

vi. Easy to Access:

ODR can be accessed anywhere at any time wherever internet is available as per the
convenience and necessity of parties.

vii. Data Storage:

Document storage being one of the most usual problems faced in Indian courts has got
replaced by ODR mechanism where data storage is secured for saving and transmitting
documents as and when necessary without any hassle.

CHALLENGES:

ODR faces various obstacles in its way of growth in India such as lack of human interaction
and communication, lack of literacy, inadequate confidentiality and secrecy of proceedings,
lack of trust and confidence, limited range of disputes, cultural, educational and language
barriers, negative mindset of lawyers. But one of crucial and pivotal challenge is the
admissibility of ODR.

[Link] AS TO ADMISSIBILITY:

a)Mutual Consent and Writing:

For invoking ODR process, mutual consent of parties is essential, whether through an explicit
clause in contract or by separate mutual agreement between parties, otherwise any decision
rendered by neutral shall not be legally valid and binding on parties. Another essential
condition is agreement between parties must be in writing. Article 2 of New York Convention
and Article 7(2) of UNCITRAL Model Law requires the agreement must in writing. But at the
same time New York Convention is silent upon agreements entered into through electronic
communications. Whereas UNCITRAL Model law recognizes the arbitration agreements
entered into by electronic communications and the same has been followed by India its 2015
Amendment to Act of 1996.

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b) Place of Proceeding:

In adjudicatory process, place of arbitration is geographically determined which constitutes a

core element on which numerous legal implications depend. If proceedings are conducted
entirely online with parties and neutral in distinct places, prima facie, it seems impossible to
determine place of proceedings. This observation led some scholars to conclusion that virtual
arbitration has no situs11

ii. Jurisdiction:

When disputes are resolved online, question as to applicable substantive law to disputes
arises. In case of international arbitration it is important to distinguish four choices of law
issues,
a)Substantive law governing merits of parties’ contract and claim
b)Substantive law governing parties’ arbitration agreement
c) Law applicable to arbitration proceedings (curial law or lex arbitri) Conflict of law rules
applicable to each of forgoing laws.

iii. Pre-trial Stage:

Important elements of pre-trial stage are discovery, interrogatories and collation of evidence
in support respective contentions of parties may be minimized in ODR for speedy resolution
leading to failure to discover true and correct state of facts.

iv. Awards:

Taking New York Convention as a starting point for analysis of whether electronic arbitral
awards are admissible within current legal framework, it can be noted that convention does not
explicitly provide for an arbitral award signed and in writing. Further, Article 8 of UNCITRAL
Model Law on Electronic Commerce explicitly states that requirement to present information
in its original form can be met by an electronic data message.

Article 31 (1) of UNCITRAL Model Law, requires “award shall be made in writing and shall
be signed by arbitrator.” Followed from Model Law, in India section 31 of Arbitration and

11
P. Carrington, “Virtual Arbitration” (2000) 15 Ohio St. J. on Disp. Resol. 669 at 669.

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Conciliation Act, 1996 requires the same. But, traditional concept of writing and signature
now has been replaced by Information and Technology act, 2000 which has given legal
recognition to electronic records and digital signature.

v. Enforcement:

It is the single most important pillar upon which edifice of international arbitration rests. If
Act of 1996 is considered following points to be considered:
a) In adjudicatory process decisions are to be enforced through the courts of law.
b) Orders in execution are subject to appeal
c) Intervention of court during and after pronouncement of decision.
This may give rise to issues like jurisdictions or law applicable or place of proceedings for
which there is need to apply the conflict of rules or proper laws to avoid forum shopping.

JUDICIAL PRONOUNCEMENTS: -

Landmark cases such as Tata Sons v. The Advanced Information Technology Association12
and Maruti Udyog Limited v. Maruti Software Pvt. Ltd.13 Wherein WIPO, the Arbitration and
Mediation center was made the medium to solve the Domain name dispute.
In State of Maharashtra v. Dr. Praful B. Desai14 Supreme Court held that video-conferencing
could be resorted to for taking evidence of witnesses by stating that recording of evidence
satisfies the object of Section 273 of the Code of Criminal Procedure that evidence be recorded
in the presence of the accused.
In Trimex15, the Hon’ble Supreme Court held the online arbitration agreement is the most
important document of arbitration and since parties do not meet personally but rather virtually,
it is pertinent that the agreement clearly defines all particulars of dispute resolution mechanism.
There must be meeting of minds and the agreement must be according to Section 7 of the
Arbitration and Conciliation Act 1996.
In Shakti Bhog Food Ltd. v. kola Shipping Ltd., communication and acceptance by telex,

12
Tata sons v. the Advanced Technology Association, Case No. D2000-0049
13
Maruti Udyog Ltd. V. Maruti Software Pvt. Ltd., Cae No. D2000-1038
14
State of Maharashtra v. Dr. Praful B. Desai (2003) 4 SCC 601
15
Trimex International FZE Ltd. v. Vedanta Aluminium Ltd. (2010) 3 SCC 1

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telegram and other mode of communication has been accepted as valid mode of
communication.

SUGGESTIONS & CONCLUSION: -

With the immense growth of online market, ODR mechanism in order to fasten its leg needs
mass awareness and training through social media, education, street plays, advertisement,
conferences, workshops and campaigns etc at gross root level. Participation of government also
plays very important role to grant financial aid to ODR projects and to assist in creating
technical and administrative infrastructure required to set up an ODR process.

The issues as to privacy and confidentiality needs to be tackled by using privacy enhancing
techniques and stronger security mechanisms such as privacy design methods, privacy
engineering, and privacy self-synchronization etc. to maximize the benefits of new breed of
technology led disputes. There is also need for codification of laws, uniform standards and
rules including implications of conflict of law rules which will ultimately provide for
recognition, admissibility of ODR process nationally as well as internationally.

The necessity is to ensure access to justice at affordable cost to all sections of society. A sound
communication infrastructure is necessary for easy access and justice must be delivered in
minimal time and in adequate manner by increasing literacy rate, reducing language and
cultural barriers, and easy access to e-courts which may put a hand for growth of e-commerce
and e- governance. Initiatives at national as well as at international level are to be taken to
flourish the wings of ODR thereby reducing burden on judiciary. Thus the step to advance
ODR is a key to facilitate global harmony and to encourage international relationship in cross-
border disputes.

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BIBLIOGRAPHY

ARTICLES:

• Mohamed S. Abdel Wahab, Ethan Katsh and Daniel Rainey ( Eds.), Online Dispute
Resolution: Theory and Practice. A Treatise on Technology and Dispute Resolution at 13.
Published, sold and distributed by Eleven International Publishing, The Hague, Netherlands
• Hon. Arthur M. Monty Ahalt (ret.), What You Should Know About Online Dispute
Resolution
• Katsh E, Online Dispute Resolution: some implications have emergence of law in cyber
space, Lex Electronica, vol.10n.3,hiver/winter2006
• Jay P. Kesan, and Rajiv C. Shah. Fool Us Once Shame On You - Fool Us Twice Shame On
Us: What We Can Learn From the Privatizations of the Internet Backbone Network and the
Domain Name System, available at: [Link]
• Robert Gellman. “A Brief History of the Virtual Magistrate Project: The Early Months”
(1996)

URLs:
• [Link]
• [Link]
• [Link]

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