JustAct

The Arbitration Mediation and Conciliation Act, 1996 provides for the conduct of proceedings in a time- bound manner, i.e., limitation in arbitration, within the following provisions:

Section 8 - application for reference of disputes to arbitration, shall be filed not later than submitting the first statement on the substance of the dispute;

Section 9(2) - where a Court passes an order for any interim measure of protection, the arbitral proceedings shall be commenced within a period of 90 days from the date of such order;

Section 13 - where a challenge is made against an arbitrator, the same must be raised within 15 days from the constitution of the tribunal, or after becoming aware of any circumstances mentioned in sub-section (3) of Section 12;

Section 16(2) - a plea that the tribunal does not have jurisdiction, shall be raised not later than the submission of the statement of defence; and

Section 34(3) - a maximum period of 90 days after the receipt of the signed award, to file objections before the Court.

The Arbitration Mediation and Conciliation (Amendment) Act, 2015 introduced new amendments for the speedy disposal of arbitral proceedings:

Sections 11(13) - an application made either before the Supreme Court, or the High Court, or person or institution designated by such Court, shall be disposed of as quickly as possible, and an endeavour shall be made to dispose of the petition within a period of 60 days from the date of service of the notice on the opposite party)

Section 29A the arbitral proceedings must be completed within a period of 12 months from the date of completion of pleadings; and

Section 34(6) - an application under Section 34 shall be disposed of expeditiously within a period of 1 year from the date on which the notice of filing objections is served upon the other party.

Section 43

The Arbitration Mediation and Conciliation Act, 1996 provides for limitation in arbitration under Section 43. This section provides for the conditions regarding application of limitation to cases, the start of proceedings, when the claims would be barred by time and conditions that need to be met for time extensions to be granted. Here, limitation shall apply to arbitrations as it applies to proceedings in Court. It also provides that an arbitration shall be believed to have commenced on the date referred to in Section 21, i.e., the date on which a request for that dispute to be referred to arbitration is received by the respondent.

Section 11

Section 11 of the Arbitration Mediation and Conciliation Act, 1996 deals with the appointment of arbitrators, the procedure, requirements and limitations in arbitration insofar as it applies to any stage of the proceedings.

Online Mediation Courses Program involves handling inter- personal dynamics & negotiations to resolve a dispute of simple to moderate complexity, independently through mediation.

Role of Arbitration in Criminal Cases

Although the traditional court system is associated primarily with the dispensation of justice, methods of Alternative Dispute Resolution are beginning to be seen as viable correlatives in different industries that see a heavy volume of civil and commercial disputes. The overwhelming technicalities inherent in the practice of law, procedural complexities, inordinate delays and obscure language make the legal terrain challenging to navigate. It is in this context that ADR is gaining ground and the time and cost benefits of ADR are being foregrounded as among the better alternatives to the difficulties created by the court system.

This article will be divided into two segments and each segment will deal with the cost and time benefits inherent in the Alternative Dispute Resolution ecosystem, with a specific focus on arbitration and mediation.

Arbitration

The costs of arbitration relate to certain heads such as fees of the lawyers apart from the expenses involved in the proceedings. Therefore, the contents of the arbitration clause and the procedure as agreed upon in the agreement or under the provisions of the applicable laws would determine the extent of the costs involved. The time and cost benefits of using arbitration are as follows:

1. Less interference by the courts

Under the Arbitration and Conciliation Act, 1996, arbitral awards are not subject to appeal. The Court may set aside arbitral awards under the grounds mentioned under Section 34 but this is not an appellate power to review the decisions made by arbitral tribunals. The 1996 Act was enacted in consonance with the UNCITRAL Model Law which sought to make arbitrations cost and time-effective by reducing the interference of the courts.

2. Expedited procedure

The Act, 1996 under Section 29B allows the parties to an arbitration agreement to resolve their dispute by fast-track procedure. This procedure provides that the arbitral tribunal shall decide the dispute on the basis of written pleadings, documents and submissions filed by the parties without any oral hearing. The award under this section shall be made within a period of six months from the date that the arbitral tribunal enters upon the reference. This is helpful for parties looking for speedy and effective resolution.

3. Greater level of expertise

Arbitrators are generally professionals with specialized domain expertise and hence, would provide better quality justice in shorter time periods because of their familiarity with the subject matter. This would also boost confidence in the quality of the proceedings and the resultant arbitral awards. The proceedings would be shorter compared to court hearings, less expensive and subject to the availability of the parties and arbitrators involved.

Mediation

Mediation allows parties to explore practicable and interest-based solutions in a private, person-centric, confidential space in order to ensure the continuance of business and personal relationships. This ensures that precious time and resources are saved by not taking recourse to the court system which could prolong disputes and bring strife into interpersonal and professional relationships. The time and cost benefits of using mediation are as follows:

1. Amount of preparation

The costs and length of IPR litigation in some European nations was captured by WIPO studies which show that litigation continues to be a time and cost-intensive process, which leads to narrower outcomes. However, it takes significantly less effort to bring parties to mediation. The mediator does not need to depend on voluminous evidence and statements in order to bring the parties to resolution.

2. Rapid settlements

Mediation provides a useful opportunity to the parties to identify the terms of the dispute with precision. The parties have the power to decide the scope of the mediation. This forms the basis for direct negotiation between the parties (in the presence of a neutral) without cumbersome delays. It allows the parties to identify only those issues that are significant to the dispute as also to reach quicker settlements that could be decided at any stage of the resolution process thus saving time and money.

3. Flexibility

There are no fixed methods in mediation; it is widely understood that different mediators adopt differing styles. This allows for a flexible tailored approach in keeping with the specific needs of the parties thus reducing time and miscellaneous costs. The parties also reserve the right to exit when they find the process unsuitable as a method of resolving their dispute.

4. Procedural costs

Since the presence of lawyers in mediation is not mandatory, this helps in saving costs in regard to payments made to legal professionals. There are also no procedural fees involved, unlike in litigation.

Introduction

Alternative Dispute Resolution as a means of settling disputes out of court is gaining precedence across the world. Most disputes that arise may be resolved through methods such as arbitration, conciliation and mediation services amongst alternative options of redressal. However, there are certain classes of disputes that cannot be resolved as easily. They are non-arbitrable in the sense that requisite authority has not been provided under the law to resolve them privately. For instance, Section 2(3) of the Arbitration Mediation and Conciliation Act, 1996 (“A & C Act) ousts the jurisdiction of arbitral tribunals wherein the laws in force provide that the particular dispute is not arbitrable.

Non-arbitrability

At first glance it might seem that this is in direct contrast with the terms agreed upon in the New York Convention and UNCITRAL Model Law since the objective of the Convention is to arm arbitration as a method and ensure the enforceability and execution of arbitral awards across multiple jurisdictions. Therefore, it could be concluded that non-arbitrability clauses in Indian law are not compliant with this objective.

However, it should be noted that Articles 34 and 36 of the UNCITRAL Model Law on International Arbitrations provides that no arbitral award shall be recognized or enforceable in states where the subject matter of arbitration is not capable of being settled out of court or if the award is against the public policy of such state. The same words have been reiterated by the A&C Act, 1996 under sections 34 (2) and 48(2). The law, both international and domestic, is thus clear that not every issue may be arbitrable and that arbitral awards may be set aside in accordance with the laws of that country.

What constitutes the non-arbitrability of a particular class of issues?

The A&C Act, 1996 in its entirety does not provide for the class of issues that are non-arbitrable. This has been determined by judicial precedents and other special statutes. Two cases hold the field and provide the necessary guidelines to determine the arbitrability of a case. They are –

Booz Allen & Hamilton Inc v SBI Home Finance Ltd, (2011) 5 SCC 532

Vidya Drolia and others v Durga Trading Corporation, (2021) 2 SCC 1

It may be useful, in this context, to understand the scope of the rights available to parties in regard to disputes. These are as follows:

a) Rights in Rem

b) Rights in Personam

Right in rem is a right the person exercises against the world at large while right in personam is a right that is exercisable only against specific person/s.

Any case that involves an element of right in rem is generally non-arbitrable and by default, taken up by the public fora. The types of remedy involved are not those which an arbitral tribunal is empowered to give. On the other hand, rights in personam are enforceable only against certain people, and are civil in nature; hence, these are amenable to arbitration though this is not a rigid or inflexible rule.

Booz Allen & Hamilton Inc v SBI Home Finance Ltd

The case is foundational to the development of the parameters of non-arbitrability of disputes and the Supreme Court laid down general rules in this regard.

The Court discussed the three facets of arbitrability relating to the jurisdiction of the arbitral tribunal herein:

i) whether the disputes are capable of adjudication and settlement by arbitration? That is, whether the disputes could be resolved by a private forum chosen by the parties (the arbitral tribunal) or whether they would exclusively fall within the domain of public fora (courts)

(ii) Whether the disputes are covered by the arbitration agreement? That is, whether the disputes are enumerated or described in the arbitration agreement as matters to be decided by arbitration or whether the disputes fall under the `excepted matters' excluded from the purview of the arbitration agreement.

(iii) Whether the parties have referred the disputes to arbitration? That is, whether the disputes fall under the scope of the submission to the arbitral tribunal, or whether they do not arise out of the statement of claim and the counterclaim filed before the arbitral tribunal.

The Court also pointed out that adjudication in certain categories of cases were reserved for public fora exclusively as a matter of public policy. Other categories of proceedings, though not reserved exclusively for adjudication by public fora including courts and tribunals, may, by necessary implication stand excluded from the ambit of private fora. Furthermore, the Court added, subordinate rights in personam arising from rights in rem have always been considered to be arbitrable and hence may form one of the exceptions to the above.

The class of cases that cannot be arbitrated, as cited by the court in this case, includes-

(i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences;

(ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody;

(iii) guardianship matters;

(iv) insolvency and winding up matters;

(v) testamentary matters (grant of probate, letters of administration and succession certificate); and

(vi) eviction or tenancy matters governed by special statutes.

In A. Ayyasamy vs A. Paramasivam & Ors, J. D. Y. Chandrachud commented that there are classes of disputes which fall within the jurisdiction of special fora created under legislation which exclude the jurisdiction of the ordinary civil court.

Vidya Drolia and others v Durga Trading Corporation

In Vidya Drolia, while coming to an understanding of whether arbitrability can be analyzed by the Courts under Section 8 or 11 of the Act, J. N.V. Ramana, in agreement with J. Sanjiv Khanna held that Sections 8 and 11 of the Act have the same ambit with respect to judicial interference i.e. scope of judicial review and jurisdiction of the court is identical but extremely limited and restricted.

Subject matter arbitrability cannot be decided at the stage of Sections 8 or 11 of the Act, unless it’s a clear case of deadwood. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably ‘non-arbitrable’ and to cut off the deadwood.

The scope of the Court to examine the prima facie validity of an arbitration agreement includes only: a. Whether the Online arbitration agreement was in writing? or b. Whether the arbitration agreement was contained in exchange of letters, telecommunication etc? c. Whether the core contractual ingredients qua the arbitration agreement were fulfilled? d. On rare occasions, whether the subject ­matter of dispute is arbitrable?

The Court, under Sections 8 and 11, has the power to refer a matter to arbitration or to appoint an arbitrator, as the case may be, unless a party has established a prima facie (summary findings) case of non-­existence of valid arbitration agreement.

The Court has the power to refer a matter if the validity of the arbitration agreement cannot be determined on a prima facie basis, as laid down above, i.e., ‘when in doubt, do refer’.

The Court may interfere at the Section 8 or 11 stage, as little as possible, when it is manifestly and ex facie certain that the arbitration agreement is non- existent, invalid or the disputes are non-arbitrable, though the nature and facet of non-arbitrability would, to some extent, determine the level and nature of judicial scrutiny.

In conclusion

Before and through the pandemic, the world changed radically. One would observe that there is a massive concentration of wealth and intellectual property. As a consequence, there are a select few people holding power in one hand, and many trying to oppose them on the other.

Services economy as compared to the manufacturing economy is dominant. This means more and more businesses are touching people on an individual basis. The country’s largest respondent is the government. And it’s only getting bigger in the world. More is spent on infrastructure, and balance sheet tallies are higher and higher. Catalyzed by elements such as social media, privacy issues are also at the center of attention in a lot of discussions and narrative in the world, thanks to cloud based services and so on.

Quite simply, we are coming into a polarized world economically, socially, politically and from a business perspective. And the capacity of courts to deal with this kind of polarization is very limited. This means we need an alternate way to resolve disputes. And that’s exactly where online dispute resolution comes in.

Essentially this field is a branch of dispute resolution that utilizes technology and trending fields under it to aid resolving disputes between parties. Tech fields involved usually include and are not limited to Artificial Intelligence and Machine Learning! Under such fields the dispute resolution methods of negotiation, mediation or arbitration, or all three depending on the nature of the case are included.

So in layman’s terms, it may be seen as the online parallel of alternative dispute resolution. However, ODR can also augment the traditional means of dispute resolution by innovating on their techniques by involving technologies in its various processes.

Increasing the efficiency of the mechanisms to resolve online disputes will have a substantial impact, not just for disputes but even in the e-commerce sector as well. While ODR is not limited to disputes arising out of business to consumer online transactions, it would clearly be the logical choice, even in these cases to resort to ODR, since both use the same medium (the internet) when the concerned parties are in distance.

Embracing an idea means embracing its methods. Embracing ODR needs to be done rapidly but not at the cost of sacrificing the principles that underly our justice system. This includes aspects that safeguard justice such as fair trials. This therefore begs the question: Why?

              Why do ODR methodologies need to be embraced?

  Let’s take this from the perspective of India’s justice system, which itself faces several challenges. The key issue in question is how it stands as a system that is not delivering justice in time to give relief to people whose rights are violated. The numbers speak for this.

That’s what it takes on an average, at every stage of our judicial system - district judiciary, high courts and supreme court. Bottom line, the case life cycle basically is 15 years long! Simply put, we have a justice system that is overwhelmed and therefore severely crippled by the volume of cases.

But a deeper look reveals that it is not about having too many cases in India. It’s about an exclusion of people being able to access the judicial system in India. Over 3 crore cases remain pending and we are daunted by it!

It’s human nature to want a thorough closure to an issue faced. So when these cases are pending for 15 years or more, the resolution that comes later has no meaning to it. If there is a property dispute between two people, how can the case be not resolved for 35 years? More importantly, what kind of impact does it have on them?

The answer is we need to do something about getting our judicial system function better. And if you look forward, it presents a challenging situation considering the number of courts that are built and the number of cases that come in. The capacity to deal with these cases just doesn’t exist at this time. This calls for new methodologies to resolve disputes.

One of the silver linings of the COVID pandemic is the adoption of online hearings. Even so, two problems still manifest. The first is solving the capacity problem, and then there’s the problem of accessibility to the judicial system. The only solution is that the reach of dispute resolution mechanism has to go beyond what it is today.

An immediate solution to this would be to further empower key personnel involved in the system: judges, arbitrators, mediators, to be able to work more efficiently, interact with the stakeholders more efficiently without the problems of travel, availability, coordinating accessibility. Considering how it’s booming and at our fingertips, technology becomes an appropriate way. It is critical to adopt newer technologies to solve the problems of dispute. ODR is not a different mechanism from delivering justice. It might not solve all problems but it certainly is a significant step forward if we enable our judiciary and our legal system to adapt technology much quicker and make them digitally native to enable access to justice. In the process we’ll be better poised to resolve the challenges our judicial system is facing.

With the opportunities under technologies come the challenges. Knowing the challenges means probing the following:

Access to justice.

What the ODR design really is, and

How it raises questions on equality, equity fairness, transparency.

                1. How is the scheduling of cases? 

                 2.How are documents circulated? 

                 3.How does the video conferencing work?

                    ODR is not just a technology integration, but where technology is used to solve disputes. This means, ODR is not just a virtual scheduling of cases, not video conferencing, not document circulation but it can include automated decision making with the use of artificial intelligence and machine learning. All of these raises questions on access, particularly about the very platform of ODR.

Dispute Resolution uses the mechanisms of Negotiation and Mediation in order to let parties arrive at a consensual resolution. Arbitration is the third main method of Dispute Resolution. It is a mechanism in which a dispute is submitted, subject to agreement between the parties, wherein one or more arbitrators make a binding decision. In simple terms, it’s one of the three dispute resolution methods by which people try to arrive at a solution without having to go to court.

The conduct of the arbitration proceeding is very much outside of a court, but resembles a hearing nevertheless, in that both sides present their statements and evidence to make a strong case. The Arbitration and Conciliation Act, 1996 governs the law of Arbitration in India and sets out the conditions under which the process of Arbitration, whether domestic or international is conducted. It also covers aspects of enforceability of the arbitral awards.

One major milestone in Arbitration in India was set when the 2019 Amendment of the Indian Arbitration and Conciliation Act 1996 was made. The Arbitration and Conciliation (Amendment) Act came into effect from 9th August 2019, and was intended to make India an Arbitration friendly jurisdiction. The 2019 Amendment inter alia introduced the following amendments in Section 11 and Section 29A of the Arbitration and Conciliation Act.

Section 11: The 2019 Amendment Act introduced an appointment procedure by arbitral institutions designated specifically by the Supreme Court in cases of International Commercial Arbitration and the High Court in the other cases wherever the Council has graded arbitral institutions, and on an application made by parties. Alternatively, it provides for maintaining the panel of arbitrators by the Chief Justice of the concerned High Court for the discharging function of the arbitral institutions.

The amendment also clarifies that in a situation wherein more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to different arbitral institutions, the arbitral institution to which the request has been first made shall be competent to appoint, and that the application made under this section shall be disposed of by the arbitral institution within a period of thirty days from the date of service of notice on the opposite party.

Section 29A: The provision through 2015 Amendment mandated that an award shall be passed in a matter within 12 months of the arbitral tribunal entering upon the reference and that the parties may, by consent, extend the time for making an award by another six months. The 2019 Amendment Act added the following amendments to sub section (1) of section 29A:

One of the silver linings of the COVID pandemic is the adoption of online hearings. Even so, two problems still manifest. The first is solving the capacity problem, and then there’s the problem of accessibility to the judicial system. The only solution is that the reach of dispute resolution mechanism has to go beyond what it is today.

international commercial arbitrations shall be excluded from the purview of the timeline provided in the section, but parties thereto must endeavour [retaining the UK English spelling] to adhere to the same; and

For international commercial arbitration, the time limit for arbitral award shall be within 12 months from the completion of the pleadings of the parties under section 23(4) of the Arbitration Act instead of the existing period of 12 months that starts from the date on which the arbitral tribunal enters upon the reference.

Further amendment was with respect to adhering to the timeline of award being made within six months from the date on which arbitral tribunal enters upon the reference. In such a case, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.

These are the wise words of the man who is credited with inventing the world wide web, and a rather telling observation by him. We can hardly imagine a world now, where technology is viewed as a separate discipline, and not part of our daily lives.

It is safe to say that there has been a pre- internet world and a post-internet world, and using technology, the post internet world has seen innumerable and unimaginable breakthroughs, Online Dispute Resolution (ODR) being one of them. ODR has the power to change the landscape of the dispute resolution mechanisms, across territories. It has the power to change how humans view resolving disputes altogether. It already has, and it further will.

Online Dispute Resolution is different from the traditional court systems, and is in fact a parallel justice system, which successfully blends information technology and dispute resolution mechanisms together in order to resolve disputes efficiently. ODR is not just dispute resolution, but dispute prevention process as well.

ODR began its existence as ‘Online ADR’ and was meant to be an online equivalent process of offline face to face dispute resolution mechanisms such as negotiation, mediation and arbitration.[1] Therefore, it is very important to understand the origin of both technology and the dispute resolution mechanisms, the two pillars on which ODR has developed.

               In this context, ‘how’ and ‘why’ questions become relevant.

               How has ODR come into picture? Why is it needed at all?

For understanding ‘How ODR came into being’, it is relevant to also understand how the world we are living in has changed since the arrival of technology called the Internet and How the concept of Alternate Dispute Resolution came into picture, making Online ADR a reality.

As far as development of the Internet goes, early on in 1468 the Department of Defence, United Nations had established a Federal Advanced Research Projects Agency (ARPA)which was mainly responsible for developing technologies for military use.

The military network was called the ARPANET, and was restricted to use only by military.[2] On October 29, 1969, ARPANET delivered its first message: a “node-to-node” communication from one computer to another, thus getting October 29, 1969 widely known as the “Internet Day.”

In the year 1980, access to ARPANET was expanded to several universities by the National Science Foundation which funded the establishment of supercomputing centres in these universities. Thus ARPANET was now in use not just by the military, but also by academia.

Given the restricted use of ARPANET by military and academia, the Internet for the first 20-25 years of its existence saw very few disputes. And for the few disputes there were no online formal institutions for resolving them.

After the exclusive use by military and academia, ARPANET, was later formally decommissioned in 1990, having partnered with the telecommunication and computer industry for commercialization and an expanded worldwide network, known from then on as INTERNET came into being.

From there to now, we have witnessed how the Internet has changed the landscape for communications, associations and interactions. It has connected people disregarding all kinds of boundaries, culture, territories, so much so that the online world did not just begin to connect using the internet, but it began disputing on the internet too, just like in the offline world.

1990s was the time when the online environment for commerce, education, employment, and entertainment was on a boom. Suddenly the commercialization of the Internet was a ready tool in everyone’s hand to start interacting for anything big and small.

This gave them power, this gave their businesses the power too. However, similar to the offline world, where increased interaction often results in an increase of disputes, the online world saw increased disputes ranging from spamming, phishing, illegal downloading, piracy, to normal commerce of buying and selling online. Cyberspace was no longer a harmonious place.

The Internet as a 21st century medium has revolutionised almost all areas of life. From serving as a common source of information, communications tool, global platform for trade and commerce, it has become the engine for introducing modern technological solutions for almost every activity. Needless to say that the Internet has made an impact on many areas of private and public life, one such area being law.

Parallelly, when the world was getting introduced to Internet in the 1960’s and 1970s, the world was also witnessing dissatisfaction with the Court systems all over the world. The caseloads were increasing manifolds with each passing day and much more was expected from the Institution responsible for delivering justice.

This discontent with the formal Court systems led to the Convening of Pound Conference 1976 where several of the legal stalwarts discussed the current state and the drudgery of the judicial system, not just in terms of efficiency but relating to cost, time, quality of outcome reached, party satisfaction, impact of resolution, interest based needs, creative solutions etc.

Pound Conference has given huge impetus to the growth in popularity to the process of Mediation, which is one of the mechanisms under Alternate Dispute Resolution. Pound Conference pressed for having the mechanisms of Alternate Dispute Resolution (ADR). ADR, though seen as a recently developed mechanism, is an old trick/way of resolving disputes between parties. While Courts are the adversarial form of justice system, ADR aims at resolving the dispute in an amicable manner.

Amongst the processes of ADR i.e. negotiation, mediation and arbitration, negotiation and mediation are the informal processes which aims to settle the matter between two or more disputing parties, and are more driven by needs and satisfaction of parties than their rights and obligation. In negotiation, parties try to discuss their problems and resolve them amongst each other.

Our everyday lives are filled with negotiation, from negotiating for vegetable price to negotiating salaries. The parties realise the cost of dragging a dispute for long and taking it to the court, and understand the benefits of negotiating and reaching a solution that will benefit both parties, thus creating a win-win situation.

The process of Mediation is facilitated by a third party neutral who assists two or more disputing parties to reach a solution. Mediators does not take sides and their only aim is to resolve the issue. This is again a very real life situation wherein a third person intervenes between two feuding parties and explains to them the long term benefits of ending the dispute and making the parties reach a solution. Several husband wife matrimonial disputes have been resolved by a third party like this, with or without terming it as mediation. The process is entirely voluntary.

In fact the concept of arbitration, which is very much a formal process like courts, can also be traced back to ancient Greek mythology, wherein an arbitrator was chosen to resolve dispute between two parties through amicable settlement (much like negotiation and mediation). If this didn’t work out then the arbitrator was to adduce evidence of parties, and later on deliver a judgement based on the facts and evidence. This decision could later be appealed against by parties.

Thus, it is very clear that these processes have been part of our systems for very long and the Pound Conference 1976 was instrumental in formally pushing the idea of ADR mechanism, as a respite for parties from the Court systems and lessening the burdens for Courts as well. The Conference was followed by a series of conferences about Alternative Dispute Resolutions.

The idea of ADR has gained momentum since then throughout the world. ADR was not just an efficient way of resolving disputes, it has also come as a tool to change people’s mindset about disputes and resolving it, by looking at the bigger picture.

ODR began its existence as Online ADR, an amalgamation of technology and ADR. It is a network based equivalent of offline face-to-face dispute resolution processes like negotiation, mediation and arbitration.[3] The idea of Online Dispute Resolution emerged out of the understanding that disputes will grow as the range of online activities grew. In fact, it was very well understood that the Internet was part of the problem in generating disputes. However, it was also to be part of the solution in garnering resources to resolve it online.

As already pointed out that the first few years of the internet witnessed few cases. In fact, after the decommissioning of the Internet in 1990 for commercial activity few disputes relating to online commerce began to surface.

In April, 1994, the first commercial spam occurred when two lawyers tried to recruit clients to participate in an immigration scam.[4] Sometime later, in September, 1994, the U.S. Federal Trade Commission filed its first case of online fraud.

The case involved an American Online subscriber who advertised that for $99.00 he could show people how to create new credit files at all the major credit bureaus. However the process was not considered to be legal and he had to provide compensation to consumers. There were other instances like this.

Around the same time in 1996, first articles on ODR began to appear in a Law Review[5] and the National Centre for Automated Information Research (NCAIR) sponsored the first ever conference on ODR, which also funded the ODR projects like the Virtual Magistrate, Online Ombuds at University of Massachusetts.

A year after this Hewlett Foundation established the Centre for Information Technology and Dispute Resolution with the goal of supporting development of the field of ODR by various initiatives.[6] Since then several conferences, seminars around the world have happened with ODR as the central topic.

A big breakthrough happened in the field of ODR when e-bay founded in 1995 by Pierre Omidyar, put a feedback system where buyers could know more about the seller, in order to generate trust and risk reduction. The feedback was a big step in generating confidence in the buyers and also eliminating disputes between buyers and sellers.

Taking this further, in 1999 e-bay asked University of Massachusetts to conduct a pilot project to mediate disputes between buyers and sellers.[7] The pilot project was a huge success as it handled two hundred disputes in a two week period, by far the largest number of disputes ever handled online till then.

This prompted e-Bay to include dispute resolution as an option for buyers and sellers in the event a transaction were unsuccessful, making it the first company ever to do this. Initially, eBay’s dispute resolution process was contracted out to an Internet start-up, Square Trade. Square Trade which used new methods like employing web rather than email as means of communication, and also technology supported negotiation before requesting for a mediator.

Several years later the resolution process was taken over by eBay itself. By 2010, the number of disputes handled by eB-ay reached the extraordinary figure of sixty million.[8] According to a BBC report in 2015, e-bay has the most advanced and workable online dispute resolution system that jurisdictions such as Wales and England should adopt to evade the various civil court proceedings. The ODR conference (2016) also ranked e-Bay’s ODR as the largest in the world.

The methodology used by the company has prevented 90% of the disputes from making it to the courts. It is very clear the e-bay is a trendsetter in the field of Online Dispute Resolution. Not just other companies, but other countries have also taken inspiration from e-bay and understood what a long leap dispute resolution can take with the help of technology

Some countries such as U.K have somewhere taken inspiration from this and tried to imbibe the ODR systems in their territories, in similar or different formats. United Kingdom has tried to embrace the e-Bay approach, but they have opted to use judges to resolve the conflicts due to the existing laws. It is apparent that such a methodology is expensive and time-consuming, and can be made more dynamic and easy for the users of the ODR system.

ODR in the current state is also being used as a hybrid mechanism between online and offline by various institutions. E.g. UDRP dispute resolution happened without face to face meetings except sometimes through telephones. Some ODR providers use limited internet. One of the earlier dispute resolution providers eResolution.com employed a completely online system but stopped handling cases in 2001. Currently World Intellectual Property Organisation (“WIPO”) and National Arbitration Forum (“NAF”) have online systems where emails are sometimes used as well.

Technology is undergoing a change rapidly. What is the best technology today might get outdated tomorrow. It will become faster and cheaper. There was a time when ADR was introduced and the world took time to adapt to it, and when it did, it realised what power it brought to the whole process of dispute resolution as well as to the parties.

In ADR parties are in charge of their cases. ODR furthers this power of resolving disputes without putting a pause in one’s life. A party who was once entangled in a case would have innumerable things to worry about, cost, travel, time, attending courts, so much so that the dispute would become central to his/ her existence.

ODR, in its present form, takes away all the above mentioned hassles. The ongoing pandemic has suddenly made us face a situation where the world would have been lost, if not for technology and Internet. The need for ODR hasn’t been felt more.ODR in future, is believed to be not just an extension of ADR, but bringing in whole different dynamics altogether. ODR tomorrow might not just be about making the technology speedier or less costly but also smarter in data processing.

If that happens, the trajectory of ODR, popularly known as the “Fourth Party” would be very different from what we fathom today. The wider acceptance of ODR would also mean bringing on board very many pre litigation stage cases where parties are comfortable to get their future disputes resolved. Organizations in the future would be adopting business policies for inclusion of ODR system.

Although online mediation has received criticisms because of its impersonal attribute, in future it will not be perceived so because we are looking at a world where every transaction and communication will be happening online, and that is going to be the normal.