Related Topics

Lok Adalats
2022 OCT   21
Mediation Bill 2021
2022 OCT   4

Online Dispute Resolution

2021 MAY 25

Mains   > Polity   >   Judiciary   >   Alternate Dispute Redressal

WHY IN NEWS:

  • NITI Aayog launched the first-of-its kind Online Dispute Resolution (ODR) handbook in India on 10th April 2021. The handbook is an invitation to business leaders to adopt ODR in India

WHAT IS ONLINE DISPUTE RESOLUTION?

  • ODR is the resolution of disputes outside courts, particularly of small and medium-value cases, using digital technology and techniques of alternate dispute resolution (ADR) such as negotiation, mediation, and arbitration.

EVOLUTION OF ODR IN INDIA

BENEFITS

  • Cost effective
    • ODR offers a cost-effective mode of dispute resolution for the disputants as well as the neutrals
    • By its very nature, ODR does not require parties to travel long distances or rent a facility to conduct the dispute resolution.
    • Further, ODR has the potential to reduce legal costs. First, by way of reduced time for resolution and second, by doing away with the need for legal advice in select category of cases
  • Convenient and quick dispute resolution
    • The pendency of cases in courts across India has been one of the major setbacks for the justice system
    • ODR can address such delays by providing a faster and more convenient process for resolution of disputes.
    • In itself, ADR employs simpler procedures and a fixed timeline for processes leading to efficient dispute resolution
    • ODR can offer multi-door dispute resolution through tailored processes for specific parties and their disputes.
  • Increased access to justice
    • ODR can contribute significantly to improve access to a variety of dispute resolution processes by addressing major concerns such as lack of access to physical courts or ADR centres, cost of dispute resolution as well as the barriers due to disabilities.
    • Since ODR tools such as online negotiation and mediation are premised on mutually arriving at an agreement, they make the dispute resolution process less adversarial and complicated for the parties.
    • This improvement in the overall experience encourages more parties to opt to resolve their disputes through formal means, which in turn increases access to justice
  • Removes unconscious bias
    • Studies have identified that implicit bias and anxiety to communicate with members of different communities can influence the outcome of mediation
    • ODR processes lessen the unconscious bias of the neutral while resolving disputes.
    • ODR platforms, especially those based on texts and emails, detaches audio visual cues relating to the gender, social status, ethnicity, race, etc. and helps in resolving disputes based on the claims and information submitted by the disputing parties, rather than who these parties are
  • Improved legal heath of the society
    • Greater access to dispute resolution processes, and cost-effective resolution will result in improved legal health of the society where individuals and businesses are aware of their rights and have the means to enforce them.
    • Thus, contracts will come to be stringently enforced improving the business environment in the country
  • Complete transformation of the legal paradigm
    • ODR also has the potential to transform the legal paradigm as a whole
    • The new paradigm provides an opportunity to accord dignity and respect to every citizen in an effective, efficient and expeditious manner.
    • From ‘dispute resolution’ to ‘dispute pre-emption’, ‘reactive services’ to ‘proactive services’, ‘print based’ to ‘IT-based’ >> this new paradigm isn’t a disruption for the few, but a sustainable transformation for every citizen

FACTORS INFLUENCING SUCCESSFUL IMPLEMENTATION OF ODR

  • Availability of a reliable and secure technology tools
  • Digital infrastructure to enable usage
  • Willingness of parties to adopt to a new way of resolution
  • Co-operation and support from lawyers, Judiciary, Government to ensure enforcement of awards and agreements

PRESENT STATUS OF ODR IN INDIA

  • Role of the Executive
    • Adoption of ODR by Government Departments and Ministries
      • National Internet Exchange of India’s (NIXI) Domain Dispute Settlement Mechanism:
        • NIXI have adopted ‘.in’ Domain Name Dispute Resolution Policy (INDRP) >> which sets out the terms and conditions for resolving a dispute arising out of the registration and use of the .in Internet Domain Name
        • Under its procedure, complaints can be filed online and disputes are decided by an arbitrators on the basis of written submissions.
        • The procedure does not require any in-person hearings to resolve the dispute
      • Initiative by Department of Justice:
        • In 2017, the Department of Justice initiated the discourse on the use of ODR to address disputes involving Government bodies by releasing a list of ODR platforms and urging Government Departments to resolve their disputes online
      • SAMADHAAN Portal:
        • In October 2017, Ministry of MSME launched the SAMADHAAN portal, with facilities for e-filing and online settlement of Micro and Small Enterprises’ dues against Public Sector Enterprises, Union Ministries etc. which accounts for nearly 94 percent of the dues payable to MSEs.
        • Since its launch, SAMADHAAN portal has assisted disposal of 3982 payment due complaints
      • RBI’s ODR Policy on Digital Payments 
        • In 2019, the Nandan Nilekani led High level Committee on ‘Deepening Digital Payments’, established by RBI recommended the setting up of a two-tiered ODR system to handle complaints arising out of digital payments
        • As a consequence, in August 2020 >> RBI introduced ODR for resolving customer disputes and grievances pertaining to digital payments, using a system driven and rule-based mechanism with zero or minimal manual intervention
        • Subsequently, Payment System Operators (PSOs) have been advised to put in place ODR processes for resolving disputes involving failed transactions
      • National e-Commerce Policy:
        • In 2019, DPIIT released the Draft National e-Commerce Policy >> The policy suggests the use of an electronic grievance redressal system including dissemination of compensation electronically for disputes arising from e-commerce
      • Initiatives by the Department of Consumer Affairs
        • In 2016, the Department of Consumer Affairs launched Integrated Consumer Grievance Redressal Mechanism (INGRAM) initiative to offer a platform for consumers to get their complaints and grievances addressed directly by the companies
        • Department has also launched a “Consumer App” to solicit complaints from the consumers and provide prompt redressal
      • Other examples:
        • The e-assessment of the Income Tax Department and e-challan system introduced by the Ministry of Road Transport and Highways are some key examples of how technology has been used to for easier containment and resolution of disputes
  • Legislative Preparedness
    • Key Legislations to strengthen the ADR ecosystem in India
      • The Family Courts Act, 1984:
        • Family disputes are one of the most suitable dispute categories for mediation and conciliation.
        • Section 9 of the Family Courts Act, 1984 read along with the ‘statement of object and reasons’ requires the court to assist and persuade the parties to arrive at a settlement through conciliation.
        • Further, in ‘K. Srinivas Rao v D.A. Deepa’, the Supreme Court has held that mediation is an avenue that must be exhausted in matrimonial disputes.
      • Legal Services Authorities Act, 1987:
        • The Act provides conciliation services through Lok Adalats established in every district and enable access to justice to the weaker sections of the society.
      • The Code of Civil Procedure, 1908:
        • Section 89 of the code empowers the court to refer a case for resolution through one of the ADR modes recognised under the provision - arbitration, conciliation, judicial settlement including settlement through Lok Adalat or mediation.
      • Commercial Court Act, 2015:
        • It introduced mandatory pre-litigation mediation in India.
        • Mandatory pre-litigation mediation has been successful across countries such as Italy in significantly reducing the litigation burden on the civil courts.
      • Arbitration and Conciliation (Amendment) Act, 2019:
        • It aims to strengthen and promote institutional arbitration in India.
        • The amendment establishes an Arbitration Council with the function to frame policies for governing arbitral institutions and provide grading to these institutions.
      • Consumer Protection Act, 2019:
        • The Act takes a big step towards building capacity for mediation in India.
        • It provides for the establishment of Consumer Mediation Cells in every district to broad-base mediation facilities for consumers.
        • The Act also encourages parties to undergo mediation at any stage of the proceeding
      • Companies Act, 2013:
        • Act requires the Central Government to maintain a panel of experts called the ‘Mediation and Conciliation Panel’
        • The Act empowers any party to proceedings before the Central Government, National Company Law Tribunal (NCLT) to request for the dispute to be referred to mediation
      • Companies (Mediation and Conciliation) Rules, 2016
        • It aims for regulating the empanelment of mediators and prescribing the procedure for the mediation proceedings.
    • Legislations to address the technology aspect of ODR
      • Indian Evidence Act, 1872:
        • Section 65-A and 65-B of the Act recognises electronic evidence and provides conditions for its admissibility.
        • Such provisions can provide guidance to regulate sharing of virtual documents, recordings and conducting virtual hearings.  
      • Information Technology Act, 2000:
        • Section 4 and 5 of the Information and Technology Act provides recognition to electronic records and electronic signatures.
        • Such legal recognition can be crucial to enable end to end digitisation of justice delivery processes
    • Adoption of international convention and standards of global best practices:
      • India has adopted UN Convention on International Settlement Agreements Resulting from Mediation, 2018 ( or ‘Singapore Convention’)
      • It allows for direct enforcement of mediated settlement agreements and enable swift enforcement of settlement agreement arising from international mediation
  • Judicial Preparedness and Acceptance
    • ICT Integration in the judiciary
      • eCourts Mission Mode Project
        • eCourts project has deployed technology infrastructure and standardised software in District Courts across the country
        • Some of its key successes include the setting up the eCourts websites, creation of the National Judicial Data Grid (NJDG) and establishment of a unified CIS (Case Information System).
      • E-filing of cases
        • eCourts Mission Mode Project has already launched eFiling Portal for District Courts and High Courts
        • Restriction imposed due to the COVID-19 pandemic created an urgent need for e-filing facilities for courts
        • To address this need, in May 2020, Supreme Court issued ‘Practice Directions for eFiling’ >> to enable Advocates-on-record to file cases online through an e-filing platform
      • Electronic Signature
        • Electronic signature is a crucial step towards digitising legal processes.
        • Considering the low availability of the hardware cryptographic token for eSignature on pdf documents, the eFiling Portal launched under eCourts Mission Mode Project also provides facility for eSigning
      • Integration of Artificial Intelligence
        • Supreme Court has harnessed the potential of artificial intelligence through the development of SUVAS i.e. Supreme Court Vidhik Anuvaad Software.
        • This artificial intelligence powered software has the capability to translates judgments, orders and judicial documents from English to nine vernacular language scripts
    • Recognition for technology solutions through judicial precedents
      • Recognition of online arbitration
        • The Supreme Court >> in Trimex International v/s Vedanta Aluminium Ltd recognised the validity of use of technology in the arbitration process.
        • The court also upheld that the validity of online arbitration agreements through emails, telegram or other means of telecommunication which provide the record of agreement
      • Recognition of video conferencing
        • The Supreme Court in the case of State of Maharashtra v/s Praful Desai recognized modern modes of communication and upheld videoconferencing as a valid mode for recording evidence and testimony of witnesses
      • Recognition of electronic summons
        • The Supreme Court in Central Electricity Regulatory Commission v/s National Hydroelectric Power Corporation >> allowed service of summons through email along with other modes.
      • Admissibility of electronic records as evidence
        • In recent years, the Supreme Court, through judicial precedents has strengthened this procedure for admissibility electronic records
      • Virtual Courts for traffic challenges and cheque bouncing cases
        • The Supreme Court in Meters and Instruments Pvt. Ltd. v/s Kanchan Mehta identified that complete reliance could be placed on technology tools to resolve disputes
    • Conducting e-Lok Adalats
      • The COVID-19 pandemic has provided an impetus to the authorities to use online mechanisms in their daily functioning.
      • As a consequence, India saw the organisation of various e-Lok Adalats across States.
  • ODR ecosystem in private sector
    • Businesses adopting ODR
      • Some companies have established in-house ODR platforms to resolve disputes
      • For example, NestAway established an ODR platform — CADRE (Centre for Alternate Dispute Resolution Excellence)
    • Dispute Resolution Centres adopting ODR
      • For ex: Indian Institute for Arbitration and Mediation has developed an ODR platform called Peacegate, which hopes to integrate all facets of ADR ranging from filing to back-office support
    • Growth of Start-ups providing ODR platforms and services
      • For a few years now, legal technology start-ups have been attempting to make a difference to the justice delivery systems in India.
      • One of the key impetus to such attempts came in 2019 when an ‘E-ADR Challenge’ was organised by a non-profit organisation Agami
      • Today there are multiple start-ups in the country to provide accessible and affordable ODR services to individuals, businesses, Governments and the Judiciary

CHALLENGES FACED IN ADOPTION OF ODR

  • Structural Challenges
    • Digital literacy
      • ODR requires a basic level of digital literacy as a prerequisite.
      • In India, digital literacy often varies across age, ethnicity and geography.
      • This digital divide needs to be addressed to ensure that ODR is adopted by the society at large and not remain limited to urban areas
    • Digital infrastructure
      • A broad base adoption of ODR will require essential technology infrastructure across the country.
      • This includes access to computers, smart phones and medium to high bandwidth internet connection for atleast the length of time it takes to conduct meaningful hearings.
      • These requirements may disadvantage those who have limited access to digital infrastructure
    • Gender divide in access to technology
      • As per Internet India Report 2019, women constitute only 1/3rd of internet users in India.
      • The situation is even worse in rural India where women constitute only 28 percent of the internet users.
      • Such gender divide in accessing the internet might result in uneven access to ODR services, thereby exacerbating the gender divide that already exists in terms of access to justice through traditional courts
  • Behavioural Challenges
    • Lack of awareness regarding ODR
      • Usage of technology to connect disputing parties with neutrals and resolve disputes, is at a very nascent stage in India.
      • At present, the lack of awareness regarding ODR translates into litigants and businesses having low confidence in ODR processes and restricted application of ODR
    • Lack of trust in ODR services
      • This mistrust stems at several levels – from scepticism regarding technology to questions regarding enforceability of ODR outcomes
    • Legal culture
      • It is often difficult to introduce ODR in countries where people rely more on courts and there is low percolation of ADR mechanisms for dispute resolution
  • Operational Challenges
    • Privacy and confidentiality concerns
      • Greater integration of technology and reduced face to face interactions create new challenges for privacy and confidentiality, especially in dispute resolution
      • These challenges include online impersonation, breach of confidentiality by circulation of documents and data shared during ODR processes, tampering of digital evidence or digitally delivered awards/ agreements.
    • Availability of Neutrals
      • The adoption of ODR will likely generate a huge demand for Neutrals who are comfortable with technology and trained to effectively guide the parties through the ODR process.
    • Archaic Legal Processes
      • Supreme Court in Garware Walls Ropes Ltd. case held that arbitration agreement cannot be given effect unless the stamp duty is paid.
      • Rules framed by the State Governments require parties to attach a copy of eStamp certificate to the agreement as a proof of payment of stamp duty.
      • The archaic process does not work well with the end-to-end online process of dispute resolution and create barriers for ODR. 
      • Further, in India there are no provision for online notarisation of documents. As per the Notaries Rule 1956, notarisation of documents can only be done in person
    • Enforcement of the outcome of ODR process
      • There has been uncertainty regarding enforcement of mediation settlements for a long time now.
      • There seems to be a legal vacuum when we consider mediation processes that are not initiated by the courts.
      • For these proceedings, settlements can only be enforced as an agreement between the parties and any breach of such agreement will result in further judicial processes

WAY FORWARD

  • Capacity building:
    • It is necessary to create capacity to provide quality ADR services through mediation and arbitration. This will help in transitioning faster towards ODR
  • Role of the government and the PSUs
    • The Government and PSUs are amongst the biggest litigants in India.
    • Adoption of ODR to resolve inter-governmental and intra-governmental disputes would be a key step in boosting confidence in the process.
    • This will automatically address the issue of trust in ODR processes and outcomes.
    • For this, the officials in Government Departments and PSUs need to be trained and empowered to effectively participate in ODR processes
  • Increase access to digital Infrastructure 
    • A pre-condition for an ODR enabled nation, is widespread access to digital infrastructure.
    • Such access should not just be understood to mean physical access to technology and its tools but also methods of utilising it in the form of digital literacy.
  • Reduce digital divide
    • Design platforms that maximise access:
      • It is recommended that these platforms be mobile friendly to enable their wide adoption.
      • The Government can also incentivise platforms to develop interfaces that cater to differently abled persons.  
    • Encourage the use of technology among women and elders:
      • It is recommended that the Legal Service Authorities, with the support of the Judiciary, civil society organisations and self-help groups, design special campaigns to encourage use of technology among women and elders
  • To improve privacy and confidentiality:
    • Digital signatures, encryption of documents to ensure confidentiality etc. are some of the measures that need to be taken to sustainably integrate ODR for large scale of disputes
  • Skill training:
    • A robust training ecosystem for ADR/ ODR professionals that caters to this demand is necessary while pushing towards integration of ODR as a preferred dispute resolution mechanism
  • Reforms in notarisation of documents:
    • Such processes should be digitised to ensure an end-to-end ODR process.
  • Build awareness regarding ODR:
    • Court-annexed ADR centres can be equipped with digital technology and Legal Services Authorities and ADR Centers can be used as nodal agencies to spread awareness regarding ODR
  • Legislations required to increase ODR’s legitimacy and acceptability
    • A robust ODR framework in India will require a comprehensive data protection law that can address both the confidentiality and security concerns that frequently arise with ODR processes.
    • Hence speedy passage of Personal Data Protection Bill, 2019 is a must.

BEST PRACTICES:

  • COVID-19 Online Dispute Resolution (ODR) Scheme of Hong Kong:
    • To resolve disputes that are arising due to COVID-19 pandemic
  • Zhejiang Province’s Online Dispute Diversification Resolution Platform, China
    • It provides intelligent online consultation through relevant laws and cases. Such consultations are then followed by manual consultations.
  • EU model:
    • The European Union has taken the initiative of legal health promotion where it mandates all merchants in EU countries to inform consumers about the availability of ODR.

PRACTICE QUESTION:

Q. “The concept of courts should be conceptualized as a service not a place”.  In the light of this statement analyze the prospects of Online Dispute Resolution (ODR) in India