Is Online Dispute Resolution the need of the hour?

Is Online Dispute Resolution the need of the hour?

Shalvi Mehta

While we are all practicing social distancing and following the lockdown orders passed by the government, it brings me to think the effects that this might have on disputes that might not be "urgent" for the courts to deliberate on.

A recent piece of news shocked me, where a lawyer was pushing for his case to be heard by the Calcutta High Court amidst the lockdown. The Court, however, did not find any urgency in the case and refused to hear it. The frustrated lawyer cursed the Court, and was rightfully charged for contempt of court.

In such trying times, how do we define urgency of matters? Receiving a certain amount of money to be able to pay the not so privileged staff/labourers is a sense of urgency, in my opinion. To receive this duly payable money, you may have to drag parties to court, which might not find your relief urgent enough to hear you out.

The best way to find and deliver justice and be able to do the same from the comfortable corners of your home, will be to shift the focus to Online Dispute Resolution (ODR).

ODR has been defined as a branch of Alternative Dispute Resolution that utilises technology to resolve disputes between parties. It primarily involves either negotiation, mediation or arbitration.

Consider the process of arbitration as an example. From filing, to the appointment of arbitrators, to the applications and the oral hearings, all are carried out online.

It is widely used by B2B and B2C platforms in the West. China, Hongkong, Italy, US etc. have all currently adopted ODR practices due to the COVID-19 pandemic.

The United Nations Commission on International Trade Law released Technical Notes on Dispute Resolution in April 2017 that may be considered by member nations to adopt an ODR mechanism. The usage of ODR has also been discussed at length by the Government of India but we have failed to incorporate the same in our daily lives.

That leads us to the question: where does India stand with the advent of ODR?

India has extended its hand for ODR in a limited way. When it comes to resolving disputes for online transactions, online shopping and the likes, India is slowly and steadily becoming wise to the possibility of ODR. Websites such as enable people to resolve their techno-legal issues. The website's motto is Access to Justice and Justice for All, which is precisely the objective of ODR.

The National Internet Exchange of India (NIXI) has allowed users having domain name problems to file online complaints. They generally resort to arbitration to resolve the dispute. The parties choose their arbitrators from a panel of experts maintained by NIXI. A number of disputes have thus been solved via online arbitration, and have not been challenged in courts of law.

We have the Techno-Legal Centre of Excellence for Online Dispute Resolution, which is mapping great achievements in this sphere. They are not only spreading awareness, but also have their own blog and ecosystem for e-courts that practice ODR in India.

A number of arbitration institutes also support online arbitration, video conferencing and submitting documents via their portal. Even domestic arbitrations these days allow for online delivery of documents via email or Google Drive. Gone are the days when one had to physically be present for a mere exchange of documents or filing.

With the examples quoted above, we can see that India is already at the brink of wholeheartedly accepting the ODR system The pictures and posts of judges around the country delivering judgments and attending hearings through video conferencing brings me joy and renewed confidence in the possibility of the ODR mechanism successfully working in India.

If only the process of developing an entire mechanism were quickened, we might have been able to benefit greatly during this lockdown period.

Impact of ODR

ODR has a lasting impact when it comes to speedy disposal of disputes. The cost-effectiveness of the ODR mechanism is unparalleled. With respect to arbitration, travelling and lodging costs are hugely curtailed if the dispute can be resolved through ODR.

During the COVID-19 lockdown, all disputes are at a standstill and the courts are only taking urgent cases for hearing. If all commercial cases that do not qualify as so-called "urgent matters" were attempted to be resolved through ODR, all parties concerned would be happy and satisfied with the results, in my opinion.

Also taking the social aspect into consideration, we have a number of hard-working young lawyers who are currently sitting at home and out of work because the courts are shut. ODR hearings could also become their source of bread during this lockdown.

However, that doesn't take away from the obvious concerns that the ODR system currently faces.

I. Are all parties concerned technologically equipped?

To cite a personal example, as a counsel for the respondent in a case, I had made a request to the arbitrator to hold a video conference/online hearing so that we do not waste time on resolving the dispute. However, this request was denied, as the arbitrator was not adept enough with technology to get on a video call and was not comfortable with resolving the dispute online.

The fact that there are many people who are not tech-savvy can be a big hindrance for ODR.

II. Confidentiality

Recently, concerns regarding the security of Zoom - the most used application for all business meetings - were raised. The possibility of confidential information submitted in ODR proceedings being compromised is a real threat.

All kinds of dispute resolution, especially those pertaining to commercial contracts, have very important technical and sensitive information passed during the course of the proceedings. While practising ODR, this information will have to be submitted and uploaded on servers of the service providers. How safe these servers will be is a legitimate concern.

Hence, it shall be of prime importance to come up with a secure platform in order to keep the sensitive information private, protected and absolutely confidential.

III. Jurisdiction: What shall be the place of the proceedings?

When hearings are conducted online, and all participants are sitting out of different locations, what jurisdiction will apply to these proceedings?

Application of substantive law becomes very important in all kinds of proceedings, as is the case for ODR as well. A well thought out plan for determining jurisdiction needs to be etched out before initiating the process of commencing ODR.

Answers for these questions are needed urgently.

IV. Enforceability: Will an award/settlement agreement passed through ODR have enforceability?

Jurisdiction, place of proceeding, and enforceability are inter-connected topics. Will the resolution reached through ODR, whether in the form of an award and/or a settlement agreement, ever see the light of day? Can these can be enforced and/or challenged in courts of law? What will be the process of challenge or appeal? Will challenges also be made online?

V. Conduct of the proceeding: What procedure to follow? Do we need separate clauses to bind parties to ODR?

Do different clauses need to be accepted by both parties for subjecting themselves to ODR? In my humble opinion, that shall not be needed and will only serve as an additional burden on the parties. Parties can decide to convert a normal hearing to an ODR hearing via consent given by an additional written agreement, including emails/messages.

An added burden of defining a separate clause for ODR to be conducted will be futile, especially when the entire purpose of the exercise is to make resolution simpler and faster.

For the conduct of proceedings, all institutions and service providers involved may come up with their own procedural rules, on the basis of their expertise to carry out the process. These rules may also define and clarify important aspects such as the jurisdiction, place of proceeding, seat, enforceability, challenge/appeal procedures etc.

Parties shall be at liberty to then pick and choose which service provider or rules they are most comfortable with.

After deliberating upon the above questions, I come to a conclusion that we need specific guidelines for ODR passed by the Legislature to make it a success in these times.

Recently, the Supreme Court issued a circular detailing the standard operating procedure to ease the processes of mentioning, e-filing, and video conferencing of hearings amid the COVID-19 lockdown. Had we been ready with such guidelines and an ODR mechanism, we would have been able to take advantage of the same during this lockdown period.

To answer the titular question, ODR is most certainly one of the most favourable options for commercial disputes, provided we are able to find answers and deliberate on the questions posed above.

The author is a Commercial Disputes and Arbitration Lawyer.

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