Disputes are an inevitable part of any society, but the traditional litigation process can be time-consuming, costly, and adversarial. In India, where the backlog of cases is staggering, the need for an efficient and effective alternative to court proceedings is more pressing than ever. Hence, in modern times, the concept of online dispute resolution has been emerged from the alternative dispute resolution method by electronic means. The process of arbitration, mediation, conciliation and negotiation will be conducted between parties on the mutual platform with the usage of information technology.

The ODR mechanism plays a vital role when parties are either inter-state or intra-state as such internet is the backbone of such resolution. In the pitch of e-commerce, legal complications also have been considered because of the framework and its implications. This research paper delved into the realm with the relationship of online dispute resolution with e-commerce in regard to its futuristic approach in amicable settlements. It will also include the strategies and its impact on the current legal landscape along with the potential benefits that will bring to litigants and the justice system as a whole.
 

Definition of Online Dispute Resolution (ODR)

The online dispute resolution is a modification of alternative dispute resolution methods through technology. There are several methods which are being operative through the concept including:

• Arbitration
• Mediation
• Negotiation
• Conciliation

It has become an essential flexible step which comes with several benefits than the traditional court litigation system. The concept of ODR can also be known as e-ADR, where it promotes ADR through technology and goes far beyond its root levels by providing a mechanism for the prevention of disputes between the parties. It has already been enforced by several economies for better health and promotional development including:

• U.K.
• U.S.
• Hong Kong
• Mexico
• Brazil
• UAE
• India

In these countries, pillars of government along with several institutional organizations are looking forward to its implementation in the judicial system. Internet is the backbone of cyberspace which facilitates the process of regulating minor to major transactions in the state. It has constructed ODR as a prospective concept that dispersed and expanded the justice delivery mechanism. The transition from physical hearings to virtual ones during Covid-19 has brought a handful of unconceivable changes not only to the judicial system but in every specific sector of countries. It is being governed by:

• Arbitration & Mediation Law
• Contract Law
• Civil Procedure Code
• Information Technology Laws

Origin and Evolution of Online Dispute Resolution (ODR)

In the earlier stages, two universities namely, the University of Massachusetts and the University of Maryland initiated their projects in the year 1996 on the concept of ODR. Post-1990s with the rise of globalization in trade and commerce, the internet paved the growth of e-commerce and also numerous disputes. A system was required to implement like ODR for such tech commercial transactions which led to an entity, named e-Bay, developed a platform in the year 1999 for resolving disputes through mediation services between producers and consumers. They handled two hundred disputes in a two-week period, by far the largest number of disputes ever handled online.^[1] An internet startup, namely SquareTrade was also taken over by eBay who was contracted out in the initial days. With the passage of time, eBay dispute resolution platform now handles more than 60 million disputes per year. The evolution of ODR has been on fast pace since economies had seen such growth of eBay platform in resolving the commercial disputes. In the year 1999 itself, several new ODR platforms were being launched by distinct organizations for the same objective. The famous Domain Name Dispute Resolution Policy, instituted by the Internet Corporation for Assigned Names and Numbers (ICANN), becomes an online process post such rapid growth which was actually established as in offline manner. The few platforms were able to seize their position in the market with time as a dispute resolution guide, such as:

• Smartsettle
• Cybersettle
• Mediation Room

The reason behind the same is regarding the adoption of the procedure and regulations in the administration. Other platforms, unlike eBay who have their own online mediation model, shift their ways to approach towards the network of specialized internet applications. The process generates diverse barriers for the parties in order to get fair and prompt proceedings in the form of ODR mechanism. Therefore, that phase brought appearance of some major new platforms and also the disappearance of non-flexible platforms who failed to promote innovative solutions.

Origin and Evolution of ODR in India

The concept of ODR has emerged from the practical nature of ADR around two decades ago which was started in order to suffuse a culture of arbitration in society. The state processed ADR as a greeted course of action which noticeably helps in dismissing the burden on law courts. The objective of eliminating the obstacles of escalating arrears of cases and delayed justice, all the dispute resolution methods have been coined as a feasible substitute to the litigation which have battered public confidence. The party autonomy and institutional arbitration have been salvaged by the philosophies that created the concept of ADR. The requirement of international commercial arbitration has been occurred from the globalization of economy and promotion of trade and commerce at international level. The United Nations Commission on International Trade Law (UNCITRAL) framed the model arbitration law which led to the creation of new arbitration law in India which incorporates the provisions for both the domestic as well as international arbitration. The Arbitration and Conciliation Act, 1996 was enacted for the formalization of arbitration and conciliation process. It preordained to make an effective and efficient resolution procedure to meet the requirements of the globalized economy in the future. The act also consolidates and amend the laws relating to domestic arbitrations and international commercial arbitration. The creation of the Malimath Committee, in the year 2000, put forth a presentation on the highlighted obstacles in the necessity of alternative dispute resolution methods as a feasible substitute to the conventional litigation in the Indian courts. The Constitution of India, 1949 anticipated Rule of Law to be established in the relation of providing alternate adjudicatory practices that can help in cost-effective and speedy justice to the indigent people. The concept of International commercial arbitration has brought its own importance with the change in the environment of globalization and liberalization of trade and commerce for the countries' economies. The word 'commercial' is nowhere defined in the arbitration and Consolation Act 1996 in the framework of international commercial arbitration, however, the judiciary has interpreted the term in the number of cases like:

• RM Investment and Trading Corporation vs Boeing Co.^[2]
• Harendra Mehta vs Mukesh Mehta^[3]

In the context of municipal and international levels, various councils and organizational institutions have engaged themselves in the formal study of viable alternative dispute resolution mechanisms that complete all the necessities of indigent people who are looking for equity and justice. At the municipal level like India, the Indian Council of Arbitration is working upon the just, fair, and prompt means of undertaking resolutions in commercial disputes. On the other hand, the World Intellectual Property Organization, at the international level, concentrates its pivotal role in delivering arbitration and mediation services for the member states. The WIPO directs the member states to include such arbitration clauses in commercial contracts at the international level. Hence, WIPO sustains a noteworthy feature of the online dispute resolution mechanism (ODR) to carry forward the arbitration and mediation practices. They developed a system by which any commercial enterprise, by continuing their identity, has been provided an internet domain exclusively for the resolution of disputes through internet technology.

Features of Online Dispute Resolution (ODR)

The key derivation of ODR, arbitration in particular, has fetched from its own heart and soul, that is, agreement between the parties, which regulates both domestic and international commercial arbitration after the qualification of the doctrine of public policy. The autonomy of the parties makes them determine the essential components in the facilitation of the proceedings like:

• Members of the tribunal
• Location of arbitration
• Governing law
• Enforcement of the award

Such determination for the adjudication is being conducted either by an arbitration clause in the contract itself or through an arbitration agreement. It provides the powers, jurisdiction, and binding effects of the resultant award over the parties, to an arbitrator for such arbitral adjudicatory proceedings.

The conceptual method of Arbitration is being known for its flexibility whatsoever parties determine the location, law governing, jurisdiction and members of the tribunal. It became an anticipated tool in the settlement for both domestic and cross border disputes because of its non-partisan and consensual settlement noteworthy features. The features can be seen in the form of cost & time saving, providential procedure, impartiality and well-established legal environment. In The State of Maharashtra vs Dr. Praful B. Desai[4], the Hon'ble Court has accepted the submissions by doctor who belong to US and unable to attend physically due to his health issues.

The effects of trade and commerce proceeded by both individuals and states in the contemporary national and international levels have also progressed the greater probability of commercial disputes. The business and commercial communities are looking forward for fair and prompt mechanism for the amicable settlement of such disputes. The evolutions in the culture of ADR have given these communities to make a choice between litigation and resolution methods like arbitration, negotiation and mediation.

The national and transnational entities are adopting such consensual dispute settlement devices for the speedy resolution of their frequent commercial disagreements through technology, which in certain harmonize the growth of e-commerce. The arbitration tribunals are inculcating this culture at a broader arena of regional, national and international fields during the recent years. The parties are also realizing and accepting the same over the traditional litigation mechanism because of the significant advantages and benefits.

Relationship Of ODR And E-Commerce

The e-commerce platforms have piloted their development very rapidly in the era of globalisation where producers and consumers play a pivotal role in the trade and commerce. These commercial transactions cannot be processed on a regular basis without any one single defect in e-commerce realm, and such defect led to mounting of disputes between the parties. The growth in the economies even brought several challenges for the individuals from first to last intakes of goods and services.

Hence, Online Dispute Resolution (ODR) become a contemporary concept for the amicable and efficient settlement of disputes which are arising of e-commerce platforms. It helps in harmonizing the business relationships that arose from contractual obligations between the parties in the world of e-commerce.

The arbitral proceedings, either through traditional method or with technology, parties undertake some major contractual obligations which is an instantaneous irrevocability to refer the disagreements in tribunals by such means and to honour the arbitral award. The arbitral settlement of the disputes arising out of commercial contracts between the different economies or private parties made numerous agreements to be witnessed by the modern world trade and commerce.

There are several commercial treaties signed between the countries regarding the cross-border investments, collaborations, trade and commerce have the appropriate outline of legal documents to shield themselves from any kind of ambiguity in the clauses. It is well stated that the world cannot rest away from the disputes arising out of such commercial contracts either at municipal or international level, it will do arise. There are numerous reasons for mounting of such disputes however the world also requires a mechanism that carries just and prompt result which also enriched in speedily settlement.

The economies dismay from the traditional court litigation approaches because of the high costs and long-lasting effects in business associations. Therefore, these bilateral treaties have already characterized the types of arbitration, namely ad hoc arbitration and institutional arbitration, and as such they demonstrate ad hoc arbitration default character.

They are stepping in the concept of international arbitration, one of the cross border commercial dispute resolution methods which have noteworthy features that outstands it in terms of cost effective, fast process, party autonomy and reduction of traditional complexities. It also textured a road to the growth of other alternative dispute resolution methods. The businesses are now more contented with the resultant award by arbitral tribunal than the judgement out of the court proceedings.

The business, trade and commerce have no boundaries in the contemporary world which lead to a regulatory intercourse from one economy to another. Likewise, the international commercial arbitration is paving its significant features from one economy to another for the settlement of such arising disputes.

Identification And Statement Of Problems

The implementation of ODR in the judicial system also carries several structural and behavioural challenges for the state and institutions. The deficiencies in terms of literacy, awareness, trust, confidence, infrastructure and regulations way down the concept during its administration and management. The states, during the pandemic, are being involved in the stimulation of the economical components that are crucial for the futuristic approach. Hence, technology has played an important role in fulfilling such objectives and to discover new systems that promotes beneficial settlement of disputes.

The administration of ODR requires support from each and every stakeholder which entails lawyers, judicial officers, governmental departments, ministries and parties itself. The stakeholders have their own interests and incentives which needs to be on the table while enabling ODR as widespread alternative dispute resolution method.

The main derived problem is the awareness among individuals because ODR mirrors as e-ADR, hence initiatives should be processed in order to build the familiarity about the concept of ODR directly. The parties need the trust and confidence over the platform proceedings for its continuity. Therefore, ODR platforms have to facilitate the best conceptual beneficial aids to the parties that will maintain the continuous usage. The promotion of ODR can only happen post quality ADR services by the tribunals and institutions to the necessary parties.

The parties still carry a concern of breach in terms and conditions by the ODR platforms as what if they circulate the documents and information by tempering the evidences, agreements and awards. Thus, platforms have a duty to provide a regulatory framework towards the parties while addressing the issues. They have to look forward several facets like digital signature and encryption of documents to aid as collective measure for large scale of disputes.

The theory of absolute immunity is also under a peer pressure after the development of international trade, commerce and business between the economies. In order to circumvent the contractual obligations, several economies steps into market places with the title of private party which allows them to relish all the privileges of statehood and even a protection umbrella under the immunity rule of a state.

Doctrine Of Lex Mercatoria

The doctrine of Lex Mercatoria is popularly labelled as merchant law, which entails numerous foundations like uniform law, public international law, general doctrines of law, customs and usages. The doctrine and some other general doctrines have been incorporated by International commercial law. It acts as a transnational roadmap for general legal sprits and doctrines because domestic laws cannot regulate alone such international commercial contracts.

The growth of the economies in the contemporary phases of globalisation led to change in the commercial laws with the flexibility in the economic environment. The principle has manifold tenacities i.e., a guide for the transnational accepted doctrines of law and resolution mechanism for the intercourse of trade, business and commerce. It even acts as an interpreter measure for the regulatory enforcement of commercial laws.

The term 'International Commercial Arbitration' is defined under Section 2(1)(f) of Arbitration and Conciliation Act, 1996 where it arises a legal and commercial relationship between the parties along with some other mentioned criteria in the provision which claims to be fulfilled. The Indian judiciary has interpreted the term 'commercial relationship' with the UNCITRAL model law as a source by which it relates the relationship of commercial representation, commercial agency and consulting.

Role Of Stakeholders In ODR

The stakeholders are taking part in a collaborative manner to diversify the ADR mechanism through technology. The Government, ministries, departments and private sector are putting their own innovative roles towards the adoption of ADR mechanism in hybrid manner to promote the business environment. The promotion of AI and blockchain technology in the legal culture has developed expeditiously. In the commercial realm, the technology has expanded the use of blockchain arbitration that administers smart contracts, consists of contractual obligations.

At basic level, ODR refers to the usage of technology in order to settle the disputes between the parties. It includes several communication tools varies from audio, video, e-mails to other application tools rather than the physical attendance of individuals. The ODR has somewhere mirrored the whole process of ADR with the usage of ICT tools. It can be easily distinguishable from the virtual courts, an online court system of traditional litigation mechanism. The main reason behind such difference is that ODR as a concept works in all three stages of trial. i.e., pre-trial, trial and post-trial. The alternative dispute resolution methods have their own relevancy and efficacy for its implementation.

The enforcement of ODR has brought awareness about the rights and obligations among individuals and businesses. The European Union (EU) has also mandated its member states to notify the parties regarding the concept to improve the legal environment. The most tangible benefit from such stringent enforcement in the creation of investment relationships between the parties is improved 'Ease of Doing Business' facets especially in the case of a country like India. The Confederation of Indian Industries (CII) have also appreciated the digitisation of ADR along with the judicial system to simplify the principle of 'Ease of Doing Business'.

The commercial and consumer disputes are one of the major reasons for the implementation of ODR. In the contemporary world. Several economies like Brazil and Mexico have brought their own state platforms to provide effective and efficient redressal mechanism through ICT tools. On the other hand, corporate companies like eBay and PayPal became musketeers in their own arena of providing redressals of disputes expeditiously, where major cases handled by them relates to consumer disputes only.

Development Phases In The Growth Of ODR And E-Commerce

ODR has also seen as in-house platform by numerous entities to maintain the amicable settlements. The major obstacle in the growth of ODR is the significance of confidentiality in the ADR proceedings on these platforms. The scrutiny and cyber security play a major role in keeping the trust and confidence among the parties while approaching this mechanism and balancing the principle of natural justice.

The SAMADHAAN portal was launched by Ministry of Micro, Small and Medium Enterprises in the year 2017, which aims to provide e-filing and online settlement facilities in relation to MSEs dues against PSUs, Departments and government. The major role of the portal is to be used by MSEs against privates to file payment due applications. The MSME-Samadhaan portal has disposed 35,478 payment due complaints worth Rs. 6173.61 crores.[5] It became possible only after the availability of such reliable technological platform considering the party autonomies with the usage of flexible redressal method.

The rise of technology has given a birth to ODR, an e-ADR concept, hence it will become a major futuristic alternative dispute resolution method. The stakeholders will also participate actively in the facilitation of such cost effective and derived expeditious method. In India, the Government has already kept up the pace with the MSME-Samadhaan and National Broadband Mission for the integration of policies along with introduction of mandatory pre-litigation.

The Government of India has even launched the initiative of Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA), in the year 2019, to increase the digital literacy as a major factor to promote and unlock the base knowledge about technology among individuals. The movement has certified more than one crore individuals as digitally literate and even established training centres in rural India. Thus, ODR requires the similar basic digital literacy among individuals about the usage of ICT tools that will be used while ADR proceedings on the platforms.

There is also a necessity of training standards to be governed in a uniform manner for the ADR experts to become an ODR expert. The judicial system including tribunals have to set the eligibilities and some standards for the expertise of ODR. There must be manifold components which should be included in the training sessions by the authorities for such arbitrators which led in appropriate governance and supervision.

The proceedings of ODR, also contains the procedure for admissibility of evidence which have to be ensured and regulated by legislations, likewise in India, Indian Evidence Act, 1872 is one who enforce the procedural provisions. On the other hand, Information Technology Act, 2000 have the provisional measures for the regulated governance in the usage of technology.

However, the Parliament, one of three estates of government, have an authority to amend such legislations for the stringent enforcement of ODR along with the protection of rights and obligations. Recently, the Indian Legislature have also passed a comprehensive legislation, namely, the Digital Personal Data Protection Act, 2023 (DPDP) which aims to shield the privacy of people in India.

The states can even take a collaborative step with the help of corporates to develop the long-lasting effects in ODR solutions. The states can even utilise and harness the potential of the platforms in a proper manner to increase the growth of e-commerce. In the light of pandemic, there was sudden rise in the number of disputes especially in the matters of business, trade and commerce. The major examples were labour issues in terms of non-payment of wages and termination of employment.

However, there is a list of distinct types of disputes which raised owing to COVID-19, such as commercial, labour, family, consumer and tenancy disputes. Therefore, the Government have to be focused upon ODR, such that these cases should be settled quickly with the objective of relieving the parties from conflicts and issues.

Concluding Remarks
ODR does not only mean the transformation of an offline process to online through technology. It needs an innovation beside such proliferation from ADR to e-ADR, such that scope should be seen wide enough in the eyes of law. The ICT tools must call for its creativity and efficacy in the efficient settlements of disputes. The usage of tools and technologies in e-commerce disputes, should be customizable according to the pecuniary jurisdiction. Thus, it fosters the promotional growth of ODR in the realm of e-commerce with just, fair and speedy access to justice.

In the landmark judgement of Salem Advocate Bar Association, T.N. vs Union of India[6], the Hon'ble Supreme Court of India held that Section 89 of Code of Civil Procedure, 1908 is an introductory provision to ADR, however, there is still a requirement of specific laws to be developed in order to formalise the ADR proceedings because it cannot alone reduce the burden of courts. Hence, Mediation Law was also being recently passed for the formalisation and regulation of the whole process in India.

The ODR have a strong relationship with e-commerce for its evolution because of mounting an existence in consumer and commercial disputes among businesses and economies. The ODR will diversify from its flexible nature in the changing social, economic and legal environment. It will even adopt the accessible designs for the users to experience a user-friendly approach while settling the specific disputes on the platforms.

The training sessions for the arbitrators and mediators will also help them to become an expert in order to provide their services in a hybrid mode. The legislature, executive, judiciary, corporates and individuals, all have a key fragment in the promotion of the ADR mechanism and especially state, like India, really have to consider, with having second largest population in the world, for the utilization of the ODR services to each and every individual at domestic and international level.

End Notes:

1. NITI Aayog – The ODR Policy Plan For India, https://www.niti.gov.in/sites/default/files/2021-11/odr-report-29-11-2021.pdf (last visited Apr. 23, 2024)
2. AIR 1994 SC 1136
3. AIR 1999 SC 2054
4. The State of Maharashtra vs Dr. Praful B. Desai (2003) Appeal (Criminal) No. 476/2003
5. Ministry Of Micro, Small And Medium Enterprises, https://samadhaan.msme.gov.in/MyMsme/MSEFC/MSEFC_Welcome.aspx (last visited Apr. 23, 2024)
6. AIR 2005 SC 3353

Award Winning Article Is Written By: Mr.Rakshit Aggarwal

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