Online Dispute Resolution

Online Dispute Resolution

News: At the Delhi Arbitration Weekend in February 2023, Union Law Minister emphasised the need for institutional arbitration to enhance the ease of doing business.

 India may have missed the bus in becoming an international arbitration hub, there is potential for the country to catch up with Online Dispute Redressal (ODR).
 Considering the current issue of cases pending for prolonged periods, Online Dispute Resolution (ODR) has capability to provide accessible justice to everyone, thereby tackling the problem.

What is ODR?
 It is the resolution of disputes, particularly small and medium-value cases.
 It uses digital technology and techniques of Alternate Dispute Resolution (ADR), such as negotiation, mediation and arbitration.
 It utilizes information technology to carry out ADR.
 The information management and communication tools in ODR may apply to all or part of the proceedings and also have an impact on the methods by which the disputes are being solved.

How is ODR implemented in India?
 The United Nations Commission on International Trade Law (UNCITRAL) adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985 and the UNCITRAL Conciliation Rules in 1980.
 The United Nations General Assembly (UNGA) has recommended the use of the said Model Law and Rules in cases where a dispute arises in the context of international commercial relations and the parties seek an amicable settlement of that dispute by recourse to conciliation.
 Mumbai Centre for International Arbitration (MCIA) and the Delhi International Arbitration Centre (DIAC) were started by Indian government to promote institutional arbitration. International arbitration centre at GIFT city was also announced in 2022.
 In addition to these institutions, the Indian government has also enacted the Arbitration and Conciliation (Amendment) Act, 2019, which seeks to streamline the arbitration process in India and make it more time-bound and cost-effective.

Impact of ODR on India’s business environment:
 Faster resolution of disputes
 Cost effective – SME’s find it difficult to bear the brunt of high legal costs. ODR eliminates the need for physical hearings, travel.
 Increased access to justice as it promotes remote dispute resolution.
 More efficiency over traditional way of resolution as it encourages use of technology to settle disputes.
 ODR can help improve compliance as it provides a structured process for dispute resolution. 

 India is not a preferred arbitration destination, even for disputes between Indian businesses. Many still seek arbitration abroad, even when the dispute is with another Indian entity.
 India has earlier acquired a reputation of being ‘arbitration-unfriendly: Srikrishna Committee(2017) due to Lack of preference for institutional arbitration over ad hoc arbitration, frequent interference from the judiciary from the appointment of arbitrators to the enforcement of awards and setting aside arbitral awards on grounds of ‘public policy’.
 ODR takes place entirely in the digital realm, which makes it challenging to verify the identity of the parties involved in a dispute. The lack of physical presence can also make it difficult to enforce judgments, as there is no way to physically seize assets or property.
 Online transactions can involve parties from different countries, which can create jurisdictional challenges. Different countries have different laws, and it can be difficult to determine which laws apply to a particular dispute.
 Not all parties have equal access to ODR platforms, which can exacerbate power imbalances.

Way Forward:
 Incentivise use of ODR by way of legislative measures such as setting ODR as a default dispute resolution tool for categories of disputes arising out of online transactions, fast-tracking enforcement of ODR outcomes, and exempting or reducing stamp duty and court fees.
 Each court can have an ODR cell along with supplemental technical and administrative support.
 Solve infrastructural challenges, curb the digital divide, and catalyze ODR’s growth by optimizing existing setups such as Aadhaar kendras to also function as ODR kiosks.
 ODR has the potential to ensure justice for all, at everyone’s fingertips. India may have missed the bus to become an arbitration hub, but it can still catch up and overtake them all online.

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