ONLINE DISPUTE RESOLUTION(ODR): AN EMERGING PLATFORM

SHRESTH KUKREJA

UILS, CHANDIGARH UNIVERSITY

ABSTRACT

This study delves into the evolution, variations, advantages, challenges, and legal frameworks associated with Online Dispute Resolution (ODR). Enabled by Information Communication and Technology (ICT)^[1]ODR offers a streamlined avenue for resolving disputes through online mechanisms such as mediation, arbitration, and negotiation. From its initial stages in the 1990s to its current prominence, ODR has witnessed notable progressions, presenting an efficient, cost-effective, and accessible alternative to traditional litigation. However, notwithstanding its potential advantages, ODR encounters diverse challenges, including cultural, infrastructural, regulatory, and legal complexities. Overcoming these hurdles will be imperative in harnessing the complete potential of ODR and ensuring its successful implementation on a global scale.

KEYWORDS

ODR, ICT, Disputes, Resolution, ADR, Online

INTRODUCTION

Online Dispute Resolution is an online form of alternative dispute resolution. ODR has the same kind of mechanism online as alternative dispute resolution has offline. The traditional legal process of resolving claims and disputes, which typically involved a court, judges, advocates, etc., was modified and enhanced with the introduction of the Alternative Dispute Resolution mechanism. Over time, the mechanism and approach to resolving claims and disputes have evolved with the advancement of technology and that is how ODR came into picture.

Globally, the ODR has increased significantly during the past 20 years. India is a country in the process of developing, and it has made progress in the government, the commercial sector, and the judiciary. As a result, more than two crores of disputes filed under SAMA^{^[2]} and more than 34 lakhs disputes are resolved till now. This paper deals with evolution, benefits, challenges, different types of platforms and the legal provisions related to Online Dispute Resolution.

RESEARCH METHODOLOGY

Doctrinal Method of study, used secondary sources to write this paper on Online Dispute Resolution. Pre-existing research papers, articles, blogs, Journals and websites are some of the examples of secondary sources which are used to gather all the information provided in this research paper.

REVIEW OF LITERATURE

There are some articles and papers on Online Dispute Resolution available online like “Online dispute resolution: The future of justice”^{^[3]} and “The rise of online dispute resolution (ODR) in India”^[4]. These articles explore many fields like history, advantages, definition and types of ODR.

This review of literature provides a comprehensive overview of ODR, covering its definition, evolution, types, platforms, benefits, challenges, legal frameworks, and prominent case laws. It synthesizes existing knowledge on ODR and sets the stage for further exploration and analysis in the research paper.

WHAT IS ODR?

According to Hon. Arthur M. Monty Ahalt (ret.) “Online dispute resolution is a branch of dispute resolution which uses technology to facilitate the resolution of disputes between parties. It primarily involves negotiation, mediation or arbitration, or combination of all three.”^{^[5]}

ODR can be described as the online dispute resolution procedure. ODR, at its most basic level, refers to the use of Information communication and technology (ICT) that can help parties resolve their disputes. It simply uses tools such as Audio visuals, Smart phones and LED screens with the vision to resolve the conflict of the parties. These days, ODR can be extended beyond dispute resolution to include dispute prediction and prevention entirely through the use of technologies like algorithm-based learning, artificial intelligence, machine learning, and other computer programmes. Aspects of Online Dispute Resolution (ODR) encompass online forms of Alternative Dispute Resolution ^[6](ADR), such as e-Arbitration, e-Mediation, and e-Negotiation, or their combination. Within the context of arbitration, online dispute resolution (ODR) includes the full process of pleadings, evidence presentation, cross-examination, oral arguments, and award rendering. When it comes to mediation, it is possible to have online sessions, share resources, and file drafts and carry out settlement agreements online. It is also possible to conduct negotiations online and to get the best settlement. ODR is becoming more and more common due to its many benefits over the offline options that parties are often presented with, such as arbitration, mediation, negotiation, and litigation.

Evolution Of ODR

The evolution of Online Dispute Resolution (ODR) can be traced back to the 1990s, a period marked by the growing popularity of the Internet and the corresponding rise in online transactions, which leads to unavoidable disputes. Over time, ODR has undergone significant development, characterized by distinct phases that have been shaped by advancements in Information Communication and Technology (ICT).

The first phase, often regarded as the foundation of ODR, saw initiatives by academic institutions such as the “University of Massachusetts and The University of Maryland” ^[7]in 1996. These pioneering efforts laid the groundwork for addressing the challenges of conducting business operations over the Internet by offering stable dispute resolution mechanisms. eBay^[8] notably emerged as a frontrunner in implementing ODR, launching a test project in 1999 to resolve disagreements between buyers and sellers on its platform. “By 2010, eBay’s ODR technology was handling an impressive volume of over sixty million complaints annually.”^{^[9]}

The second phase witnessed a surge in the establishment of ODR startups, propelled by the success of models pioneered by platforms like eBay. This period, marked by the explosive growth of the Internet, saw the introduction of twenty-one new ODR programs in 1999 alone. Among these, platforms such as the Mediation Room, Smart settle, and Cyber settle gained prominence and significantly influenced the dispute resolution industry with their effective approaches.

The Third Phase, ODR gained attraction among governmental bodies and the judiciary, primarily driven by the demonstrated success of private ODR platforms. The interest of the executive and judiciary in integrating ODR into the dispute resolution ecosystem reflects a recognition of its potential to streamline processes and enhance access to justice. As a result, there has been an increasing adoption of ODR practices and technologies by government agencies and courts, underscoring its growing significance in modern dispute resolution mechanisms.

Types Of ODR

Mediation- Mediation is a non-binding process between the disputed parties, where there is a mediator between the disputed parties who give them suggestions to come to a decision which will be the best for both the parties. Mediation can be conducted entirely online using Internet technology, allowing parties to interact face-to-face if necessary. In the mediation process, the mediator acts solely as a facilitator and cannot make decisions. The aim of mediation is to resolve disputes through a consensual and nonbinding approach. The mediator works with the parties to establish ground rules for the resolution process and helps them identify potential areas of agreement. However, the final resolution rests solely with the involved parties, who must reach an agreement. If an agreement is reached, the parties document the settlement in writing.

Arbitration- Arbitration constitutes a process wherein an impartial third party renders a decision concerning a dispute subsequent to thorough examination of the issues, arguments, and evidence presented. Distinguished from mediation, arbitration vests the neutral arbitrator with the authority to adjudicate upon the dispute. Parties involved solicit the assistance of the neutral arbitrator for dispute resolution. In comparison to conventional litigation proceedings, arbitration embodies a less formal, less intricate process, characterized by expedited resolution. This process may be conducted entirely online utilizing Internet technology, such as email, instant chat, or videoconferencing, or parties may convene in the physical presence of the arbitrator. Arbitration may assume either a binding or nonbinding form. In binding arbitration, parties are obligated to adhere to the arbitrator’s decision, which may be enforced by the court. Although resembling a court trial, the arbitration process entails fewer evidentiary rules compared to those governing trial court proceedings, and the arbitrator is not bound to apply the law exhaustively. Following the hearing, the arbitrator issues a decision typically accompanied by an elucidation of reasoning. If parties have consented to binding arbitration, the arbitrator’s decision is enforceable by the court. Court intervention to overturn the arbitrator’s decision occurs only in exceptional cases.

Negotiation- The process of making proposals, counteroffers, and concessions in order to reach an agreement between two or more parties is known as negotiation. Another way to think of negotiation is as a difficult and emotional process of decision-making that leads to an exchange of goods and services agreement. ODR is primarily utilised in arbitration and mediation; it is rarely employed in negotiation.

ODR PLATFORMS

SAMA^{^[10]}– SAMA, an online dispute resolution (ODR) platform, has gained recognition from the Department of Justice for its swift and effective resolution of diverse issues. Utilizing cutting-edge technology, SAMA has developed its own platform to facilitate ODR processes like arbitration, conciliation, and mediation. Recognized by the Department of Justice, SAMA collaborates with advisory partner Trilegal and expert partner Centre for Advanced Mediation Practise (CAMP), offering legal advice, arbitration, mediation, and other legal services. This platform has played a significant role in the e-Lok Adalat’s resolution of over 50,000 disputes. To begin the process, both parties are required to register on SAMA’s website. Subsequently, they are assigned a conciliator who guides them through the establishment of a binding settlement akin to a court order.
“The Centre for Alternative Dispute Resolution Excellence (CADRE)” ^{^[11]}– CADRE was established by “Shalini Saxena and Kanchan Gupta”^[12]. CADRE operates a website-based online program that simplifies arbitration rules, expediting the arbitration process while ensuring security. Trained arbitrators, well-versed in CADRE’s rules, oversee the process to ensure clients receive a remedy. The process begins when one party initiates contact, and if both parties agree, an arbitrator is appointed to guide them through the procedure, emphasizing the binding nature of the outcome. Parties receive information and schedules via email and WhatsApp, with face-to-face interaction facilitated through video conferencing if desired. Decisions are typically rendered within 20-25 days. Based in Bangalore, Karnataka, CADRE specializes in online arbitration, debt recovery, and disputes related to tenant and rental contracts etc;
“Online Consumer Mediation Centre (OCMC)” ^{^[13]}– The National Law School of India University, Bangalore established an Online Consumer Mediation Centre in 2016 to offer a swift and cost-free mechanism for resolving disputes. Utilizing ODR software, the nature of the complaint is assessed, after which parties engage in discussions via the platform’s interactive chat feature. Should dialogue fail to yield an agreement, the parties enter the online mediation phase, where a neutral mediator is automatically appointed from an official mediator list. Upon mutual agreement, the mediator signs the agreement, which is then legally enforceable.
AGAMI^{^[14]}–AGAMI, established in 2018, is a non-profit promoting ODR, aiming to resolve millions of disputes by 2025. Led by a diverse team, AGAMI conducts various initiatives to promote innovation in law and justice. Agami achieves this by identifying creative concepts, redefining challenges, nurturing leaders, and fostering collective efforts—all aimed at innovating within the realms of law and justice. This is executed with a perspective of abundance and openness.
“Centre For Online Resolution of Disputes (CORD)”^{^[15]} – CORD is an organization that specializes in handling internet cases comprehensively. It aims to streamline the procedural complexities while upholding the principles of justice, empowering clients and their advocates to oversee the entire process. CORD endeavours to facilitate prompt and economical conflict resolution by appointing an impartial third party from a diverse pool of skilled arbitrators and mediators for a wide array of issues.

LEGAL FRAMEWORKS RELATED TO ODR IN INDIA

“Article 21 of The Indian Constitution”^{^[16]} safeguards the right to life and personal liberty, mandating that they can only be curtailed through lawful procedures. A landmark decision by the Supreme Court affirmed that the right to a prompt trial is inherent to this protection.
“Code of Civil Procedure”, amendment in the year of 1999, Section 89 introduced provisions for resolving disputes outside of court, with judges tasked to encourage parties to explore alternative dispute resolution methods when applicable.
“The Indian Evidence Act” ^{^[17]}of 1872 was amended to include Sections 65-A and 65-B, enabling electronic evidence to be admissible in court if it meets the requirements specified in Section 65-B, thereby recognizing electronic records as secondary copies.
“The Information Technology Act”^{^[18]}, was enacted to facilitate electronic commerce and confer legal validity upon electronic transactions. It aligns with the UNCITRAL Model Law on Electronic Commerce, acknowledging electronic records and signatures as legally recognized under Sections 4, 5, 10-A, and 11-15 of the Act.
“The Indian Contract Act”^{^[19]}, governs the formation and enforcement of contracts in India. ODR mechanisms can be used to resolve disputes arising from online contracts, including e-commerce transactions, software licensing agreements, and service contracts.
“The Arbitration and Conciliation Act” ^{^[20]}1996 enables the resolution of disputes through arbitration outside of traditional court proceedings. Section 7 of the Act empowers parties to determine the arbitration process, including the option to utilize Online Dispute Resolution (ODR) mechanisms. ODR offers the opportunity to resolve conflicts through online arbitration and mediation procedures.

BENEFITS OF ODR

Time saving- ODR procedures are frequently engineered for greater efficiency when compared to conventional dispute resolution approaches. Mediation and arbitration sessions can be arranged with greater speed, leading to quicker resolutions and agreements compared to the prolonged timelines associated with court proceedings. In binding ODR processes, decisions or agreements reached are enforceable, providing parties with a prompt resolution without the need for further enforcement proceedings. ODR enables parties to participate in dispute resolution remotely, requiring only an internet connection, thereby eliminating the necessity for physical travel to attend hearings or meetings. This accessibility saves time typically spent on commuting.
Economical – ODR eliminates the need for costly travel to attend in-person meetings, hearings, or arbitrations. This significantly reduces expenses related to transportation, accommodation, and other associated costs. It cuts the procedural costs of maintaining court files which were very complex and costly.
Confidential- ODR platforms comply with data protection regulations and privacy laws to ensure the confidentiality of personal and sensitive information belonging to the involved parties. “General Data Protection Regulation (GDPR)”^[21] ensures that parties’ data is handled securely and confidentially. In ODR procedures, participants have to sign confidentiality agreements or clauses. These legal arrangements obligate both parties and mediators or arbitrators to uphold the confidentiality of any information exchanged throughout the resolution process. ODR procedures commonly include impartial third-party facilitators like mediators or arbitrators, who adhere to professional codes of conduct and ethics, including confidentiality obligations. These neutral facilitators guarantee the confidentiality of discussions and information exchanged throughout the dispute resolution process.
Party control- ODR grants parties autonomy by giving them control over the resolution process. They can decide when and how to participate, choose mediators or arbitrators, and set the pace of proceedings. Utilizing user-friendly interfaces, parties can engage directly, propose tailored solutions, and actively participate in resolving their disputes. This hands-on approach empowers parties, encouraging collaborative problem-solving and a sense of ownership in a convenient and accessible manner.
Reduces burden on the judiciary- It reduces burden on the judiciary as a significant number of cases are now being solved by the ODR platforms online which directly reduces the burden on the judiciary. As an example, SAMA has resolved more than 34 lakhs disputes till now, it is just an example of one of the ODR platforms and there are a number of platforms doing very well and helping the judiciary to serve justice to all without any delay.
Flexible- ODR’s flexibility lies in its ability to cater to diverse needs and preferences. It permits parties to engage in dispute resolution regardless of their location, overcoming geographical barriers. With adaptable schedules and accessible communication channels like email or video conferencing, ODR accommodates different time zones and communication styles. Furthermore, parties can choose from various resolution methods, such as mediation or arbitration, tailored to their specific dispute. This adaptable approach empowers parties to customize the process according to their unique circumstances, enhancing efficiency and effectiveness in resolving disputes.

CHALLENGES TO ODR

1. Early-Stage Development: ODR is in its initial phase, undergoing an evolutionary journey towards widespread acceptance and efficacy.

2. Cultural Hurdles: Developing nations in Asia, Africa, and Latin America exhibit scepticism towards online activities, hindering ODR participation. Cultural influences contribute to unregulated idea transmission, prompting governmental intervention for effective solutions.

3. Infrastructure Deficiency: Inadequate internet infrastructure, notably in countries like India, obstructs ODR establishment. The lack of robust connectivity impedes platform development, legal expertise access, and necessary software provision, thus hampering effective dispute resolution.

4. Regulatory Complexities: Efforts to standardize regional legal frameworks for consumer protection, especially for e-consumers, encounter challenges due to regulatory disparities among jurisdictions. Consistent legal standards are crucial for successful ODR implementation.

5. Business Model and Process Challenges: Issues like performance measurement and scalability complicate the ODR landscape, necessitating resolution for system effectiveness and sustainability.

6. Adaptability Constraints: Poor infrastructure, low personal computer penetration, and costly internet and broadband services restrict widespread ODR adoption. Additionally, limited binarization and online banking usage further hinder ODR efficiency.

7. Legal Complexity: ODR encounters complexities in legal framework, particularly concerning jurisdictional issues and cross-border disputes. Harmonization of legal standards and international cooperation are essential to address these challenges and facilitate seamless ODR implementation on a global scale.

8. Economic Disparity Impact: Economic inequalities between developed and developing nations widen the gap in ODR adoption. Limited resources and technological infrastructure in developing countries constrain their ability to invest in and adopt ODR technologies and practices.

PROMINENT CASE LAWS

“Grid Corporation of Orissa Ltd. v. AES Corporation”^{^[22]}:

The Supreme Court mentioned “There is no need for the arbitrators to meet physically in one place for purpose of consultation, when consultation can take place via electronic media and remote conferencing.”

“The State of Maharashtra v. Dr. Praful”^{^[23]}:

Dr. B. Desai, a doctor living in the United States, was supposed to come to India for some legal matters. However, he couldn’t make it because he was not feeling well. Instead, he agreed to join the proceedings through video calls. Indian courts agreed to this, and since then, they allow video evidence to be recorded through video calls.

“Shakti Bhog v. Kola Shipping”^{^[24]}
“Trimex International v. Vedanta Aluminium Ltd.”^{^[25]}

CONCLUSION

The advent of Online Dispute Resolution (ODR) marks a significant leap forward in modern dispute resolution mechanisms, providing efficient, cost-effective, and accessible alternatives to conventional litigation. Leveraging Information Communication and Technology (ICT), ODR platforms have revolutionized the landscape of conflict resolution, enabling quick and efficient resolutions for a wide array of disputes. Offering a range of methods from mediation to arbitration, ODR caters to the specific needs of disputing parties, fostering independence, confidentiality, and adaptability throughout the resolution process. Despite its promise in improving access to justice and alleviating pressure on legal systems, ODR encounters challenges such as cultural barriers, infrastructure limitations, and regulatory intricacies. Overcoming these obstacles is vital for harnessing the full potential of ODR and ensuring its widespread effectiveness and adoption.

[1]It is a broader term for Information Technology (IT), which refers to all communication technologies, including the internet, wireless networks, cell phones, computers, software, middleware, video-conferencing, social networking, and other media applications and services

[2] It is an ODR platform https://www.sama.live/

[3] https://www.sciencedirect.com/science/article/pii/S2351667415000074

[4] https://juriscentre.com/2024/02/14/the-rise-of-online-dispute-resolution-odr-in-india/#:~:text=The%20advent%20of%20the%20internet,to%20develop%20innovative%20resolution%20techniques.

[5] Era of Change from Offline to Online Litigation: ADR and ODR. 1.4 JCLJ (2021) 613

[6] Alternative dispute resolution (“ADR”) refers to any method of resolving disputes without litigation.

[7] University of Massachusetts and The University of Maryland.

[8] An ODR platform. https://pages.ebay.com/services/buyandsell/disputeres.html

[9] The Rise of Online Dispute Resolution (ODR) in India. https://juriscentre.com/2024/02/14/the-rise-of-online-dispute-resolution-odr-in-india/#:~:text=The%20advent%20of%20the%20internet,to%20develop%20innovative%20resolution%20techniques.

[10] https://www.sama.live/

[11] https://cadreodr.com/

[12] Founders of CADRE

[13] https://www.iacl.net.au/online-consumer-mediation-centre-of-the-national-law-school-of-india-university/