ONLINE DISPUTE RESOLUTION
Brief of Report by NITI Ayog on “Designing the Future of Dispute
Resolution”
Introduction
1. Online Dispute Resolution (“ODR”), at a preliminary level, refers to integration of
ICT tools (Information Technology Tools) in traditional Alternative Dispute
Resolution (“ADR”) mechanisms such as negotiation, mediation and arbitration.
2. However, ODR extends much beyond e-ADR, and aims to provide resolution
between parties with the help of algorithmic assistance tools such as intelligent
decision support systems, smart negotiation tools, automated resolution and
machine learning.
3. ODR can provide a comprehensive system of access to justice, and is not merely a
method of resolving disputes. It encompasses the following stages in the life cycle
of a dispute:
i. Making people aware of the law, their rights and remedies available to them.
ii. Dispute avoidance: Parties can be helped in identifying the stages at which
dispute may occur, so they can address concerns pre-emptively. ODR can
also help inform parties of the likely outcome in a case.
iii. Dispute containment: A digital layer can be added to ADR processes such as
mediation and arbitration, for example, by making pre-litigation ODR
compulsory in e-commerce, cheque bouncing etc.
4. ODR platforms can be categorised into three types by model:
a. Government run ODR platforms
b. Court-annexed ODR platforms
c. Private ODR platforms
5. ODR platforms can be categorised by structure as well:
a. Tiered dispute resolution models: Such models provide parties with an
alternative ODR solution when previous ODR process fails. For example, the
Online Dispute Diversification Resolution Platform (ODDRP) in Zhejiang, China
provides a 5-tier model – online consultation, online evaluation, mediation
(online and offline), online arbitration and online litigation.
b. Hybrid dispute resolution models: This strengthens the traditional ADR
mechanisms by parallel introduction of ICT tools. This increases efficiency while
gradually building public trust in technology.
c. Consumer dispute redressal in ODR: Consumer disputes have been identified as
one of the most suitable categories, and dedicated Government-run ODR
platforms have been developed by the Governments of Brazil, Mexico, European
Commission etc.
d. ODR not limited to ADR: In the private sector, platforms such as Smartsettle and
Cybersettle use innovative mechanisms such as blind-bidding (letting parties
arrive at a settlement without disclosing to the other party the maximum
amount they would be willing to settle at) or algorithmic resolutions.
Benefits
6. Cost effective by way of no travel cost, reduced legal cost, reduced time spent and
doing away with need of legal advice in some cases.
7. Simpler procedures and fixed timeline, reliance on asynchronous communication
eliminates the need for syncing schedules. Documents-only process can also be
followed.
8. It allows for a customisable processes such as med-arb, med-arb-med etc. Multi
door resolution for specified kinds of cases.
9. Makes dispute resolution less adversarial.
10. Limits implicit bias of human judgment. However, new biases introduced
through AI should be kept in mind.
Emergence
11. In 1999, eBay started a pilot project to provide online mediation facilities for
disputes between consumers and buyers on its platform.
12. In 2004, the city of New York adopted an ODR system for personal injury claims.
13. In India, in 2006, the National Internet Exchange of India adopted .IN Domain
Name Dispute Resolution Policy, which directs that for dispute arising out of
registration and use.
14. In 2016, United Nations Commission on International Trade Law (UNCITRAL)
adopted Technical Notes for ODR. This non-binding document provides standards to
contribute towards strengthening ODR to address the disputes arising out of cross-
border commercial transactions. In 2018, Asia Pacific Cooperation (APEC) adopted
ODR framework for business disputes.
Global Practices-Examples
15. European Union (Government-run): The European Online Dispute Resolution
Platform is used for consumer disputes. Once a consumer registers a complaint on
the ODR platform, the trader receives a notification. The dispute can be resolved
directly on the platform by exchange of direct messages between the trader and
consumer.
16. China (Court-annexed): The Beijing Internet Court provides comprehensive
online mediation services for civil and administrative disputes stemming from e-
commerce and internet. The Hangzhou Internet Courts provide asynchronous
exchange of questions and arguments, and uploading of video testimonies and
evidence. Further, an electronic evidence platform has been built which is
connected to e-commerce websites, financial institutions, notary institutions etc. It
uses blockchain technology to authenticate the evidence submitted. The Zhejiang
Province’s Online Dispute Diversification Resolution Platform (ODDRP), mentioned
above, is used for E-commerce (sales, copyright, trademark, and small claims of
internet financing), divorce and maintenance, road accident liabilities, contractual
disputes.
17. USA (Court Annexed): Utah State Courts, for small value claims
approximately less than Rs. 8 lakh, mandatory ODR is offered unless a party
demonstrates they will not be able to use it. Parties are encouraged to use the chat
function to arrive at a possible solution to the dispute. Otherwise, the ODR
facilitator assists parties in creating the Trial Preparation Document outlining the
claims and defences, as well as facts and evidences of the case
18. Smartsettle (Private, based in USA): It is used for Family disputes,
insurance disputes, real estate disputes, small claims disputes and disputes
regarding domain names. It involves three steps:
i. Modelling the problem,
ii. Identifying preferences and trade-offs, and
iii. Providing optimal solution through algorithm.
Use in India
19. National Internet Exchange of India’s (NIXI) Domain Dispute Settlement
Mechanism- The procedure does not require any in-person hearings to resolve the
dispute.
20. The Department of Consumer Affairs, in 2005, launched the National Consumer
Helpline (NCH) to disburse information on issues pertaining to consumers.
Integrated Consumer Grievance Redressal Mechanism (INGRAM) initiative was
launched in 2016 to offer a platform for consumers to get their complaints and
grievances addressed directly by the companies who have voluntarily partnered
with NCH. Online Conciliation and Mediation Centre was established at the National
Law School of India University as well. after the enactment of Consumer Protection
Act, 2019, the Department has taken important steps towards the integration of
ICT in the Consumer Dispute Redressal Commissions.
21. In 2017, the Ministry of Micro, Small and Medium Enterprises launched the
SAMADHAAN portal, with facilities for e-filing and online settlement of MSEs’ dues
against Public Sector Enterprises, Union Ministries, Departments and State
Governments.
22. In 2020, the RBI introduced ODR for resolving customer disputes and grievances
pertaining to digital payments, using a system driven and rule-based mechanism
with zero or minimal manual intervention.174 Subsequently, Payment System
Operators (PSOs) have been advised to put in place ODR processes for resolving
disputes involving failed transactions.
23. The e-assessment of the Income Tax Department and the e-challan system
introduced by the Ministry of Road Transport & Highways are a few more examples.
24. Suggestion: Specified kinds of government litigation should be directed to ODR
straightaway. However, ODR initiatives need to be tailored to the needs of
individual sectors and departments. Even inter and intra departmental disputes
can be resolved using ADR.
Legislative Scenario in India
Alternative Dispute Resolution (ADR):
Section 89, CPC: Settlement of disputes outside the Court.—
(1) Where it appears to the Court that there exist elements of a settlement
which may be acceptable to the parties, the Court shall formulate the terms of
settlement and give them to the parties for their observations and after
receiving the observations of the parties, the Court may reformulate the terms
of a possible settlement and refer the same for:--
(a) arbitration;
(b) conciliation;
(c) judicial settlement including settlement through Lok Adalat: or
(d) mediation.
(2) Were a dispute has been referred—
(a) for arbitration or conciliation, the provisions of the Arbitration and
Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for
arbitration or conciliation were referred for settlement under the provisions
of that Act;
(b)to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance
with the provisions of sub-section (1) of section 20 of the Legal Services
Authority Act, 1987 (39 of 1987) and all other provisions of that Act shall
apply in respect of the dispute so referred to the Lok Adalat;
(c) for judicial settlement, the Court shall refer the same to a suitable institution
or person and such institution or person shall be deemed to be a Lok Adalat
and all the provisions of the Legal Services Authority Act, 1987 (39 of 1987)
shall apply as if the dispute were referred to a Lok Adalat under the
provisions of that Act;
(d)for mediation, the Court shall effect a compromise between the parties and
shall follow such procedure as may be prescribed.]
Arbitration and Conciliation Act, 1996
Legal Services Authorities Act, 187
Mediation Act, 2023 (new- discussed in IBBI Report).
25. Section 9 of the Family Courts Act, 1984 refers to settlement through
conciliation. Supreme Court has mandated mediation must be done in matrimonial
disputes. Section 12A of Commercial Courts Act includes mandatory pre-litigation
mediation., SEBI (Ombudsman) regulations, 2003, Section 442 of Companies Act,
2013, Section 74 of Consumer Protection Act, 2019, and the Industrial Relations
Code, 2020.
26. Sections 65-A and 65-B of Indian Evidence Act recognise electronic evidence.
Sections 4 and 5 of Information Technology Act, 2000 recognise electronic records
and signatures.
27. E-Lok Adalats are being conducted after the advent of COVID-19, through video
conferencing. Some states have taken technical assistance from ODR service
providers to organise these.
28. United Nations Convention on International Settlement Agreements Resulting
from Mediation (also referred to as the ‘Singapore Convention’, adopted by India in
2020) enables swift enforcement of settlement agreement arising from
international mediation.
Regulation Suggested: Recommendation to use light touch regulatory model, a set of
voluntary principles. However, this can then be turned into a progressive model of
regulation, transitioning from non binding principles to directives.