Virtual platforms for ODR: Unmasking the new normal

A look at the key operational principles of the Protocol for Online Case Management in International Arbitration developed by international law firms, and how they may be applied for ODR in India.
Virtual platforms for ODR: Unmasking the new normal
ODR

Given the changed circumstances after COVID-19, online dispute resolution (ODR) is fast gaining relevance even in India. The NITI Ayog recently held a conference of stakeholders including judges and lawyers from the industry to promote the use of ODR in India.

Nevertheless, courts, arbitral institutions, and law firms are all still coming to terms with this new way of functioning. Given India’s economic disparity, the ODR system may not be available to about half the country’s population. Still, at the present time, it is an efficient form of dispute resolution that with some effort, may receive a more global reach.

Recently, a team of lawyers from various law firms including Herbert Smith Freehills, DLA Piper, Hogan Lovells, Latham & Watkins, Ashurst, and CMS published a draft protocol to enable online case management in international arbitration.

The idea of the Draft Protocol was to service the imminent need to transition to purely virtual hearings in cases based on a combination of physical, on-site participation where possible, along with remote, virtual participation. There was a need to have a central, uniform guide for consistency when adopting procedures in arbitration for online case management and the Draft Protocol aimed to meet this goal, keeping in mind the multiple stakeholders in the arbitral process.

In this piece, we examine the key operational principles in online case management set out in the Draft Protocol and how they may be applied in the Indian legal scenario.

I. Decoding the Draft Protocol

The Draft Protocol suggests best practices for an online case management system by way of (among other things) a cloud system, whereby the parties, the tribunal, and the arbitral institution (if any) are able to conduct the entire arbitration process (including drafting of pleadings, evidence, hearings, decision-making, scrutiny of award, etc.) remotely.

1. Process of online case management

The Draft Protocol is premised on the parties consenting to the adoption of a cloud platform, which may have certain agreed functionalities and security features. It suggests that the functionalities may be applied to parties on the basis of a mandatory, opt-out or opt-in approach. If the process is to be mandatory, certain functionalities would be applicable by default. On the other hand, in an opt-out setting, the functionalities would apply to parties but they would be free to opt out of them by agreement.

A third category suggested in the protocol is opt-in where the platform is made available by the arbitral institution, but only used if parties agree to opt for it. While adopting a suitable system, certain factors such as efficiency, accountability/transparency, cybersecurity, confidentiality, data protection, sustainability, accessibility of the system must be kept in mind.

The platform adopted could perform as few or as many functions as a party chooses. The functionalities could be as below and the platform recognises the strengths and weaknesses of choosing each level of functionality.

(i) E-filing

E-filing is a process of uploading pleadings/evidence on an online portal to be accessed by the arbitral tribunal. The Draft Protocol recognizes that the use of a platform only for e-filing may have limited value, since while it would work in matters where the data is voluminous and achieve the goal of data security, it can also be achieved through email.

(ii) Case repository

The platform adopted may provide the service of acting as a case repository. A case repository involves the creation of digital files of all the documents in arbitration proceedings corresponding to physical documents. The Draft Protocol suggests that a case repository for document storage may be undertaken in two ways: (a) by the administering institution or (b) a mutually agreed third party provider.

Undertaking third-party services may serve the purpose of data security and efficiency of information exchange in the arbitral process. The case repository could further achieve the tasks of invoicing, software for data analysis, and other case management processes.

(iii) End-to-end case management tool

End-to-end case management through the platform allows for the use of the platform for the entire gamut of the arbitration, whether filing or drafting of pleadings or even award drafting and scrutiny. It is the virtual equivalent of a physical arbitration. The Draft Protocol recommends the use of such an end-to-end service for the arbitration. It further recommends that such a platform could further permit addition and prioritization of tasks, as well as the creation of custom case-related checklists, while the added chat and private message features would further enhance the efficiency of the process.

2. Desirable functionalities of platforms

The Draft Protocol suggests that only end-to-end platforms service arbitral institutions as well as the parties holistically. However, cost-efficiency of the online platforms may require parties to choose and balance between flexibility, functionality, user friendliness and data security. Such a balancing exercise may further be conducted at each step of implementation.

In order to achieve the efficacy of an online case management system, the Draft Protocol lists down certain functionalities as ‘must have’ and the others as ‘nice to have’. The must have functions include data privacy and security including encryption in transit, compliance with existing standards of cybersecurity such as ISO 270001, ISO 21017, or ISO 27018; and platform functionality, which features may include data hosting, sophisticated user interface, confidential work spaces, and push notification of any new document uploads or changes.

Amongst the nice to have functions are single log-in for every user, multi-factor authentication, hyperlinking within dataset for easy access, ability of the platform to integrate with other software, effective document management to avoid duplicity, AI functionality to enable users to review documents on the platform, and e-bundling of the documents uploaded.

The Draft Protocol also contains a checklist of considerations that may be relevant for the parties in adopting an online case management platform – every step of the way.

II. Adopting recommendations from the Draft Protocol in India

India has its own set of arbitral institutions including International Centre for Alternate Dispute Resolution (ICADR), Indian Council of Arbitration (ICA), Delhi International Arbitration Centre (DIAC) and Mumbai Centre for International Arbitration (MCIA). However, parties in India prefer ad-hoc arbitration, and regularly approach courts to appoint arbitral tribunals.

The tilt towards ad-hoc arbitrations over institutional arbitrations has been documented. However, in the present time, whether ad-hoc or institutional, arbitrations in India are having to be conducted virtually. When we think about adopting ODR measures in India, some matters will have to be kept in mind:

(i) Cost consciousness: Indian parties having to adopt ODR will be cost conscious. Therefore, any platform should be mindful of ensuring that it is pricing efficient so as to incentivize ODR over physical adoption of the conventional arbitration process.

(ii) Adopting existing infrastructure: Our present infrastructure will have to be adopted into the ODR system. This is true for both courts and arbitration. This includes conversion of the voluminous physical records into an OCR format, adaptability to internet speed fluctuation, usability of the platform across devices, whether phones, tablets or laptops.

(iii) Adopting new forms of arbitration: India needs to adopt new forms of arbitration – such as documents-only proceedings for matters that may not require oral testimony. ODR platforms are quite apt for such forms of dispute resolution.

(iv) End-to-end: The aim in the long term should be to adopt end-to-end platforms for arbitrations (and eventually, with requisite restrictions even for litigation). The Draft Protocol presents a timely opportunity to Indian arbitral institutions and law firms to adopt the best and most cost-efficient functionalities to develop an integrated end-to-end platform for encrypted data management and dispute resolution.

The mandatory functionalities for an end-to-end platform to be adopted for India should necessarily include:

(i) An e-filing/document sharing software

Matters are typically document-heavy and go on for a protracted period. Therefore, any platform should be able to handle the bulk of documentation and should also have document management and e-discovery functionalities including book-marking, bundle making, pagination, highlighting, cross referencing, one click access etc. There are e-discovery softwares in places like Nuix Discover, TransPerfect, Disco etc.

Arbitral institutions also use a number of document management systems and these could be adopted for Indian disputes on a case-to-case basis. MNLU’s practical guide on virtual arbitration in India points out to the use of systems such as NetCase of ICC, AAA’s WebFile, WIPO’s ECAF, the JAMS Electronic Filing System, and the SCC’s new platforms for arbitration.

(ii) Data privacy, security and an easy interface

Since this system will be new for most users, the interface needs to be simple and intuitive. Given the many data breach concerns lately, users in India will also be concerned about data security and privacy. While this is a concern of users around the world, it becomes even more critical given that the 2019 amendments to the Arbitration and Conciliation Act, 1996 also mandate confidentiality in the arbitration.

(iii) Video conferencing software

The choice of a stable, in-built video conferencing facility will also be critical for any platform adopted in India and this facility should be able to function on low internet speed as well have the options of screen sharing, easy meeting fixing, and good audio connectivity.

Courts in India have risen to the occasion and have been front runners in adopting video conferencing for hearings and also e-filing through emails. Many High Courts had e-filing in place even before the pandemic, although the system itself was seldom called upon.

Amidst the lockdown, the Delhi High Court issued a guidance note for conducting arbitration proceedings by video conferencing and directed the DIAC to adopt these guidelines.

ODR is here to stay. The faster we adopt to it, the better we will be as front runners in ushering a new era for dispute resolution.

The authors are Mumbai-based lawyers. Views expressed are personal and have no affiliation with any organisation.

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