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There will be a deluge of cases post COVID and we need collaborative mechanism for dispute resolution that do not require parties to approach Courts for most small and medium value disputes and they could potentially be resolved by adopting alternate means of dispute resolution. We need a range of ADR and ODR Solutions and we will work to strengthen them
- Amitabh Kant, CEO NITI Aayog
The ongoing pandemic has caused a significant change in the outlook of people. The current state of affairs has forced everyone to re-imagine the way to move forward. In times like these, people have placed more and more reliance on technology and have adopted it as an effective alternative to offline means. Because of this, E-commerce and e-businesses are flourishing and are attracting maximum possible attention.
The Indian justice system has adapted well to the changing times and the official stats show that after over 100 days of virtual functioning amid COVID-19, the Supreme Court has heard over 15,000 matters, constituted 1021 benches and disposed of 4,300 matters. Despite this, one cannot overlook that fact that the Indian judiciary is overburdened and clogged with cases. Alternate Dispute Resolution (‘ADR’) mechanisms have always come in handy to lower the burden of the courts and during such difficult times, reliance could be placed on the online mode of ADR i.e. Online Dispute Resolution (‘ODR’).
ODR essentially is an online equivalent of ADR which requires the use of technology to facilitate the resolution of disputes between two or more parties. It is primarily a combination of ADR mechanisms like Arbitration, Conciliation, Mediation and Negotiation with the magic of technology. This mechanism turns out to be more convenient in terms of cost and time as compared to litigation.
The eBay Model of ODR
ODR as a dispute resolution mechanism has not been prevalent since a very long time. Since its inception in the 1990s, companies like eBay and Paypal have created such ODR platforms to assist their users in resolving their grievances. eBay, since the very beginning, has been a leader in developing various resources in the field of ODR and its ODR system is one of the biggest in the world. eBay’s dispute resolution system has played a role in resolving millions of disputes. In order to allow buyers and sellers to solve transaction issues between themselves, eBay developed an efficient automatic process to facilitate online negotiations between buyers and sellers in relation to the transaction. It allows users to put forth their claims on the eBay resolution center which offers a multi-dimensional approach to resolve the issues. The entire process works in an effective, timely and cost friendly manner living by the principles of transparency and accountability.
ODR - the Good and the Bad
The modern method of dispute resolution in terms of ODR mechanism is likely to come as a relief for people as well as the judicial system. A well established ODR infrastructure not only helps in getting speedier redressal of disputes but also saves cost and energy and lowers the burden on the courts. Additionally, with a properly developed legal framework and India’s adaptation with advanced technology, this mode of dispute resolution can prove to be more efficient.
This being said, ODR poses certain limitations as well. It can be said to be more complicated in terms of filings and producing evidence. Enforceability will come as another challenge and litigants might use the loopholes to render the arbitral awards invalid. Further, dispute resolution through online modes increases the risks pertaining to privacy and confidentiality.
As easy as one would expect ODR to make a dispute resolution process, it comes with its own set of challenges. To quote the great American Novelist Gertrude Stein,
“As far as internet is concerned, not only is there perhaps ‘no there there’, the ‘there’ is everywhere where there is internet access.”
Internet privacy and risks associated with it are a growing concern with almost everything going digital. Cyber-criminals are more active now than ever. Preserving confidentiality and privacy is of paramount importance in the space of online dispute resolution. With more and more people turning to the internet and various other digital means, it has become easier to disrupt the free flow of communications. For ODR to act as an effective method of dispute resolution, these concerns are to be addressed on priority basis. Reliance has to be placed on digital and electronic signatures and on the use of artificial intelligence. The legislature needs to step in to ensure the smoothness of the process. A number of regulatory steps are expected out of them to secure this framework. A reliable technical infrastructure may be required so as to avoid any possibility of third party interference and for ensuring maximum confidentiality.
How Prepared is India for ODR?
The present government has been making efforts to move towards the Digital India ideology. It has been the primary motivation for a lot of initiatives and developments taking place in India. Setting up a proper ODR framework would be a value addition towards making the country follow the path of Digital India.
The legislative and judiciary have always shown readiness and preparedness towards all such innovations and developments. The current framework in terms of The Arbitration and Conciliation Act, 1996; The Information Technology Act, 2000 and the Indian Evidence Act, 1872 would suffice to support and encourage an ODR mechanism in India. Additionally, the Indian courts have adapted really well to the changing times and in almost all courts, virtual hearings and virtual filings have been allowed. Various regulators such as the RBI, SEBI and CCI have been at their forefront to make adjustments as per the changing times.
The RBI, on August 6, 2020, issued a statement on Development and Regulatory Policies authorizing Payment System Operators (‘PSO’) (both banking and non-banking) to implement an ODR system for dispute and grievances relating to failed transaction in their respective payment systems by January 1, 2021. This initiative has been introduced in light of increase in the use of digital payments and the consequent increase in the disputes and grievances in the digital payment space. The PSOs are required to provide access to such a system to its Payment System Participants (‘PSP’) as well.
In its initial phase, the ODR system is to be made applicable for disputes and grievances that relate to the failed transactions and at a later stage, it would be expanded to cover disputes and grievances pertaining to other kinds of issues. Additionally, the RBI has directed the processes adopted by these PSOs and PSPs should be simple and must only require minimum details of resolution. Moreover, data confidentiality related aspects are to be specifically considered while coming up with the proper framework for this ODR system. Even the app based payment systems have been required to provide for a mechanism to lodge disputes and grievances integrated with the ODR system.
(Credits: NWSidebar)
On 6th June, NITI Aayog organized a meeting for advancing ODR in India which involved various stakeholders like Supreme Court judges, industry leaders, secretaries of government departments, general counsels and legal experts. The discussions revolved around India’s vision of ODR, opportunities pertaining to this field, action plans and possible outcomes. A great emphasis was placed on pushing ODR to the maximum extent possible.
This being said, India has seen a significant shift in the dispute resolution mechanism. This pandemic has instilled a mindset of urgency among the people and more and more reliance is now being placed on the virtual world. Our justice system has been trying to reach the masses in whatever way possible and ODR will definitely further this objective.
To promote and encourage ODR, a systematic approach is expected from the stakeholders. There is no specific legislation to regulate ODR in India however, the current legislative framework is sufficient to incorporate it. Special efforts would be required from the judiciary as well as the legislature to set up institutions to manage and regulate the affairs around ODR and at the same time, to promote research and development and to train litigants in this respect. Special efforts would be required from the Ministry of Electronics and Information Technology and Ministry of Law and Justice.
A well developed and regulated ODR system will help in making justice more accessible and investing in ADR methods has always turned out to be fruitful for our country. Additionally, this will go a long way in encouraging development and innovation in the justice delivery system.
Till then, we have this video of senior advocate Rajeev Dhavan smoking a hookah during a recent virtual hearing of Rajasthan High Court.
Harsh Kumra is a fourth year student at Amity Law School, New Delhi (GGS IP University). He has previously interned with various law firms including Anand & Anand, Kochhar & Co. and Desai & Dewanji.