The Court’s Secretary General emphasized the importance of the anticipated information technology system upgrade, which would allow the Secretariat to keep track in real time of the status of each case, this is part of an entire review of priorities and procedures internally and externally with a view to delivering a quality service.

The ICC International Court of Arbitration‘s work load continues to increase at a fast pace. The number of cases registered jumped to 663 last year from 599 in 2007. In addition 407 awards were rendered in 2008, compared with 349 in 2007, while there were 1,317 cases pending compared with 1,285 at the end of the previous year. The new Hong Kong office of the Court was up and running, with some 100 cases already registered.

¿How, exactly, PayPal resolves disputes between ecommerce merchants and their customers? Colin Rule, PayPal‘s Director of Online Dispute Resolution was intervied by Practical eCommerce magazine:

Practical eCommerce (PeC): If an ecommerce customer pays for a legitimate product using PayPal and then decides he doesn’t like it and complains to PayPal, what will PayPal do?

Colin Rule: In cases where the buyer is simply disappointed in the item, we would encourage the buyer to work directly with the seller. PayPal does offer buyer protection, but this protection covers buyers for items that they didn’t receive and for items that are significantly not as described. It does not cover cases where the buyer is merely disappointed with the item or where the item did not meet the buyer’s expectations.

Practical eCommerce (PeC): What are a merchant’s options if a customer asks PayPal to hold payment?

Colin Rule: If a merchant does get a chargeback, a couple pieces of information can be extremely helpful to dispute it. Proof of delivery, such as online tracking offered by both USPS and UPS, can be critical evidence in reversing the chargeback. A copy of the buyer’s signature confirming receipt can also be extremely effective. Finally, if a merchant did refund the buyer at any point in time, proof of the refund (and/or the shipment of a replacement item) is important.

Practical eCommerce (PeC): What other options are available to merchants to address disputes?

Colin Rule: Again, we always encourage buyers and sellers to first try to work through disputes together. To help with that, we’ve launched the dispute resolution center – a step-by-step system designed to facilitate communication between the buyer and the seller in order to get resolution of the issue. Since launching PayPal Dispute Resolution, buyer claims against sellers decreased by 50 percent, and seller losses on PayPal due to chargebacks decreased 20 percent.

If the dialogue with the seller fails to produce a satisfactory result, the buyer can then escalate the dispute into a claim, where our claims specialists gather information from both parties, examine the case and work with both parties to try to fairly and efficiently resolve the claim. In this process, PayPal will ask sellers for documentation that helps us determine that they shipped the item to the buyer and that the item was as described.

Practical eCommerce (PeC): Why should an ecommerce merchant accept payments from PayPal?

Colin Rule: It helps them increase sales and lower costs. PayPal has 141 million accounts worldwide and merchants therefore have access to a large, global base of buyers. At any given time, there is $3 billion stored in PayPal accounts, which turn over every two weeks. Many buyers view the money in their PayPal accounts as discretionary, so they are more willing to spend it, perhaps with an ecommerce merchant.

Source: Quick Query: PayPal’s Director of Online Dispute Resolution

With the enactment of Information Technology Act, 2000, e-commerce and e-governance have been given a formal and legal recognition. Even the traditional arbitration law of India has been reformulated and ‘Arbitration and Conciliation Act, 1996′ was enacted, he said.

In mediation, the practitioner has no advisory role, instead, a mediator renders help to parties to develop a shared understanding of the conflict and to work towards building a practical and lasting solution, he said.

He also emphasised the need for creating awareness on mediation among the general public.

“Unless the general public was aware of the goodness in the process of mediation, all our efforts would turn out to be a futile exercise”, he added. The litigant public, who look to the court for redressal of their grievance, should have an idea about this process, he said.

Negotiation: The most common form of dispute resolution is negotiation. By this means alone nearly all disputes are solved. If negotiations fail, it is necessary to seek the assistance of a neutral third party or several neutral third parties to facilitate a solution.

Mr. Christopher To, Secretary General of Hong Kong International Arbitration Centre HKIAC, video:

Arbitration: For an arbitration to take place, the disputing parties must agree to take their dispute to arbitration. In practice, this agreement is often made before the dispute arises and is included as a clause in their commercial contract. In signing a contract with an arbitration clause, the parties are agreeing that their dispute will not be heard by a court but by a private individual or a panel of several private individuals. If parties have agreed to arbitration, they will generally have to go to arbitration rather than court as the courts will normally refuse to hear their case by staying it to force the reluctant party to honour their agreement to arbitrate.

Arbitration is a legal process which results in an award being issued by the arbitrator or arbitrators. Arbitration awards are final and binding on the parties and can only be challenged in very exceptional circumstances. An award has a status very like a court judgment and is enforceable in a very similar manner. Arbitration awards made in Hong Kong are enforceable through the courts of most of the world’s trading nations.

Litigation: In the absence of an arbitration agreement or other consensual means of dispute resolution, the parties may commence proceedings in the courts. Litigation in Hong Kong courts is handled very competently. The decision of the Court of First Instance is not, however, final as an aggrieved party has an automatic right of appeal to the Court of Appeal and if the amount in dispute exceeds HK$1,000,000, they have an automatic right of appeal from the Court of Appeal to the Hong Kong Court of Final Appeal.

Online Arbitration in Hong Kong International Arbitration Centre HKIAC

The Hong Kong International Arbitration Centre HKIAC places great emphasis to providing online dispute resolution services in a wide variety of areas including the areas of intellectual property and information technology. Thus it is fitting that the Hong Kong International Arbitration Centre HKIAC has set as one of its goals to be one of the leaders among online dispute resolution providers in regard to domain names and E-Commerce.

The Hong Kong International Arbitration Centre HKIAC provides online dispute resolution services in the following ways:-

Dispute Resolution Service for Domain Names:

1. Dispute Resolution for gTLDs (for example: .com, .net and .org etc) – (UDRP)
As a partner in and manager of the Hong Kong Office of in the Asian Domain Name Dispute Resolution Centre which is one of the four domain name dispute resolution providers approved by the Internet Corporation for the Assigned Names and Numbers (ICANN) to provide domain name dispute resolution services in regard to generic top level domain names (gTLDs) such as .com, .net and .org. Disputes in regard to gTLDs are carried out under the Uniform Domain Name Policy (UDRP) issued by ICANN. Dispute Resolution for gTLDs

2. Dispute Resolution for ccTLDs (for example: .hk, .cn , .pw and .ph etc)
a. The Hong Kong International Arbitration Centre HKIAC is the sole provider of dispute resolution services in regards to .hk domain names, having been appointed for such purpose by the Hong Kong Domain Name Registration Company Limited (HKDNR). Mandatory final and binding arbitration is the method chosen by HKDNR for the purpose of resolving disputes in regards to .hk domain names. Dispute Resolution for .hk
b. The Hong Kong International Arbitration Centre HKIAC has been appointed by the China Internet Network Information Center (CNNIC) to resolve .cn domain name disputes. Dispute Resolution for .cn
c.The Hong Kong International Arbitration Centre HKIAC was appointed by the .pw Registry Corporation as the sole .pw Domain Name Dispute Resolution Service Provider. Dispute Resolution for .pw
d.The Hong Kong International Arbitration Centre HKIAC was recently appointed by the .dotPH – the Official Domain Name Registry for Philippines to resolve .ph domain name disputes. Dispute Resolution for .ph

3. DotAsia Sunrise Challenge Policy.

The Hong Kong International Arbitration Centre (HKIAC) is the global official dispute resolution provider to handle disputes and challenges arising out of the launch of the .Asia domain.

Dispute Resolution for Registrar Transfer (TDRP)

The ADNDRC has started to handle Registrar Transfer Disputes under the ICANN Registrar Transfer Dispute Resolution Policy since 11 December 2004. Dispute Resolution for Registrar Transfer Disputes.

Dispute Resolution for Internet Keyword

The Hong Kong International Arbitration Centre HKIAC has been appointed by the CNNIC as a provider to handle Internet Keyword Dispute under CNNIC’s Internet Keyword Dispute Resolution Policy. Dispute Resolution for Internet Keyword Dispute.

Dispute Resolution for E-Commerce – HKIAC Webtrust Programme

Webtrust Programme is a third party arbitration framework for the use and adoption by on-line merchants to handle consumer disputes on-line. It is jointly promulgated by the HKIAC and the Hong Kong Institute of Certified Public Accounts in January 2002. The HKIAC is the administrative organisation of that programme, responsible for administering the Programme and appointing of arbitrator. The HKIAC Electronic Transaction Arbitration Rules was adopted as the rules for the arbitration process of that programme.

In order to facilitate the efficient and speedy disposition of domain name disputes, the HKIAC, with technology powered and supported by the Tradelink Electronic Commerce Ltd., has developed a proprietary on-line dispute resolution system for gTLD and hkTLD, which permits parties to conduct their domain name dispute cases by means of a sophisticated fully on-line web-based system.

More information: Hong Kong International Arbitration Centre HKIAC.

- The American Arbitration Association – AAA – says ODR is used in only a small percentage of all cases settled, but it has seen recent growth. In 2006, 3,000 of the 160,000 cases the AAA handled were done digitally.

- ODR, Online dispute resolution is a broad category: Any mediation, ar­bitration or dispute resolution that takes place outside of court and at least partially online qualifies. It differs from alternative dispute res­olution, which refers to processes outside governmental jurisdiction. ODR can mean anything from e-mailing documents and evidence to using videoconferencing to bring the sides together. And it has been most effective in international or long-distance disputes involving technology issues.

- ODR will always be most important for online businesses since it’s clear the Internet is not always a harmonious place, giving rise to many disputes. Often those disputes involve small dollar amounts, far-flung ad­versarial parties and seemingly petty issues. In the wildly popular online game Second Life, a dispute arose because one player put a nude image where another player would be forced to look at it. It’s the kind of thing that’s too small to litigate in the real world—but using Web mediation, it got resolved.

- ODR makes most sense in cases in which attorneys’ fees would exceed what could be recouped. But many large organizations, particularly insurance companies and municipalities, are finding ODR saves them money even in big-money cases because a matter can be handled much faster.

- ODR is faster because it is not dependent on getting on a mediator’s or judge’s calendar. Using e-mail, discussion groups and Web sites, agreements can be written, posted and responded to when convenient. And when something needs to get done fast, participants can log on to a chat or a secure online session and hash out a dispute no matter where in the world participants may be.

- ODR has the added benefit of simplifying jurisdictional issues. Such matters can be resolved at the outset once all parties agree. And there is greater flexibility for the adversarial parties, with each dispute process tailored to each dispute’s needs. As long as someone can get online, he or she can participate in the process.

ODR Aplications:

Online dispute resolution may not have taken over the process of solving conflict, but it has provided new, efficient and low-cost ways to reach the goal. The following are a few examples of ODR applications:

1. FILING A CLAIM ONLINE

SquareTrade uses a tool called Direct Negotiation, which handles all the communications through e-mail, including an online form to explain the complaint and possible resolutions, and contact with the defending party to see if it will counter. If Direct Negotiation doesn’t bring a settlement, a mediator can join in.

2. TRADING SETTLEMENT OFFERS

In Cybersettle’s system, a claims professional initiates the process with confidential offers. The opposition is notified by fax, e-mail or mail, and the respondent has three tries to settle the claim. If the complainant’s offer is less than or equal to the opposition’s, the claim settles.

3. DISCUSSING THE ISSUES

The E-Arbitration-T Open Source Groupware and Customer Relationship Management Suite allows parties to create an entire ODR system, handling online case document sharing between all parties and offering full security. Off-the-shelf solutions like wikis and whiteboards also allow parties to share information, discuss and collaborate on documents, and even reach agreements online.

4. SIGNING AN AGREEMENT

The federal E-Sign Act has validated the use of electronic documents and electronic signatures since 2000. Digital signatures can now be added to many commonly used documents, including those created with Adobe Acrobat 8.

More information in: Settling It On the Web.

The aim of this article is to stress upon the importance of Information and Communication Technology (ICT) for resolving contemporary electronic commerce (e-commerce) and other disputes. The best example of the same is the use of Online Dispute Resolution (ODR) for resolving these disputes and misunderstandings. The Online Dispute Resolution Mechanism (ODRM) is gaining popularity among all the countries of the World, including India. There are, however, certain prerequisites that must be satisfied before ODRM can be effectively established and used in India.

I. Introduction

In the present globalised and decentralised world, India cannot afford to keep its economy closed and secluded. Thus, an interaction between Indian economy and world’s economy is inevitable. That is not a big problem. The real problem is to make Indian economy an efficient and competitive economy. Though there are many indicators for measuring the strengths and weaknesses of an economy, but the ICT strategy of a nation is very crucial to put it on a global map. It is very important that the ICT strategy and policies of a nation must not only be suitable but should also believe in a “holistic application and implementation”. The ICT strategy and policy of a nation cannot afford to keep the different components of ICT[1] separate. Their amalgamation and supplementation must be done at a priority basis otherwise the ICT strategy and policy will not bring the desired results.[2] The present ICT strategy and policies of India are deficient and defective.[3] It must be appreciated that the ICT is directly related to International Trade, more particularly e-commerce. Thus, when the Indian economy will be integrated with the Global economy certain disputes are bound to be there. We cannot use the traditional litigation methods to resolve those disputes. That will only put more pressure on the already overburdened courts. The fact is that the increasing backlog of cases is posing a big threat to our judicial system. The same was even more in the early 90 but due to the computerisation process in the Supreme Court and other courts that was reduced to a great extent. However, the backlog is still alarming.[4] This is because mere computerisation of Courts or other Constitutional offices will not make much difference. What we need is a will and desire to use the same for speedy disposal of various assignments. There is a lack of training among Judges regarding use of Information Technology (IT). We need a sound training of Judges first before we wish to capatilise the benefits of IT. A good initiative has already been taken by the Supreme Court.[5] However, the same appears to be dormant for the time being. Thus, we need a public initiative as well.[6] Besides, the use of ICT for ODR purposes is also inevitable due to the mandates of the “right to speedy trial” that is provided by the Constitution of India.

II. The Constitutional mandates

Article 21 of the Constitution of India declares in a mandatory tone that no person shall be deprived of his life or his personal liberty except according to procedure established by law. The words “life and liberty” are not to be read narrowly in the sense drearily dictated by dictionaries; they are organic terms to be construed meaningfully. Further, the procedure mentioned in the Article is not some semblance of a procedure but it should be “reasonable, fair and just”.[7] Thus, the right to speedy trial has been rightly held to be a part of right to life or personal liberty by the Supreme Court of India.[8] The Supreme Court has allowed Article 21 to stretch its arms as wide as it legitimately can.[9] The reason is very simple. This liberal interpretation of Article 21 is to redress that mental agony, expense and strain which a person proceeded against in criminal law[10] has to undergo and which, coupled with delay, may result in impairing the capability or ability of the accused to defend himself effectively. Thus, the Supreme Court has held the right to speedy trial a manifestation of fair, just and reasonable procedure enshrined in Article 21. A speedy trial encompasses within its sweep all its stages including investigation, inquiry, trial, appeal, revision and re-trial. In other words, everything commencing with an accusation and expiring with the final verdict falls within its ambit.[11]

The constitutional philosophy propounded as right to speedy trial has though grown in age by almost two and a half decades, the goal sought to be achieved is yet a far-off peak. The failures of prosecuting agencies and executive[12] to act and to secure expeditious and speedy trial have persuaded the Supreme Court in devising solutions which go to the extent of almost enacting by judicial verdict bars of limitation beyond which the trial shall not proceed and the arm of law shall lose its hold.[13] The validity or justness of those decisions is not the matter to be decided but the seriousness of delay in the conclusion of criminal and civil matters must be appreciated at the earliest. This seriousness was appreciated and accepted by many[14], including the Constitutional Courts[15], long before. The same has got recognition from the “legislature” as well in the form of introduction of “Alternative Dispute Resolution” (ADR) Mechanism (ADRM) through various statutes. There is a growing awareness among the masses as well regarding ADR/ODR and people are increasingly using the same for getting their disputes settled outside the court.[16] Thus, to make that choice a ground reality the ICT strategy of India must consider and accommodate these concerns as well.

III. Online dispute resolution in India

Internet is a communication tool, which facilitates free information dissemination. The growth of Internet has created various new problems as well. New forms of business practices like e-commerce, franchising, service agreements etc. are being used in international and national trade. With the explosive globalization of trade and investment, there has been a corresponding increase in commercial disputes between the parties across national boundaries. It has become difficult to resolve these disputes by applying the traditional judicial settlement mechanisms because of conflict in laws of various countries. In order to overcome this problem a suitable ODRM is required that is compatible with online matters and is netizens centric. The use of ODRM to resolve such e-commerce and web site contracts disputes are crucial for building consumer confidence and permitting access to justice in an online business environment. The ODRM is not part and parcel of the traditional dispute resolution machinery popularly known as “judiciary” but is an alternative and efficacious institution known as ADRM. Thus, ODRM can be used in almost all contentious matters, which are capable of being resolved, under law, by agreement between the parties. They have been employed with very encouraging results in several categories of disputes, especially civil, commercial, and industrial disputes. These techniques have been shown to work across the full range of business disputes like banking, contract performance, construction contracts, intellectual property rights, insurance, joint ventures, partnership differences etc. ODRM offers the best solution in respect of commercial disputes. However, ODRM is not intended to supplant altogether the traditional means of resolving disputes by means of litigation. It only offers alternatives to litigation. There are a large number of areas like constitutional law and criminal law where neither ADR nor ODR can substitute courts. In those situations one has to take recourse of the existing traditional mo des of dispute resolution.

The ADR mechanism can be effectively used to settle online disputes by modifying it as per the need. It is time effective and cost efficient. It can also overcome the geographical hurdles. However, there are certain issues revolving around ODRM like need for personnel with knowledge of IT, ADR and law; technical concerns; legal sanctity of proceedings; industry support etc. But these hurdles are just a passing phase. The use of ADR mechanisms for resolving online disputes is increasing day by day. This will be in great demand in the future since the 1996 Act has given paramount importance to “party autonomy” by accepting the intention of parties as a platform for dispute resolution. Thus, what law will be applicable will depend on the intention of parties. If the parties have adopted the mechanism of ODRM then it will definitely apply with necessary minor modifications. The language used in various sections of the Arbitration and Conciliation Act, 1996 give options to the pa! rties to opt for the procedure as per their agreement during the arbitral proceedings before the arbitrator.[17] It is high time that we must build a base for not only offline ADRM but equally ODRM in India. It must be noted that every new project needs time to mature and become successful. Thus, the success of ADRM and ODRM depends upon a timely and early base building.

IV. The roads ahead

The provisions of the Information Technology Act, 2000 (IT Act, 2000) must be used for establishing an ICT base that may be conducive for the development of ODRM in India. . The following provisions of the IT Act, 2000 reflect India’s commitment to use e-governance for various purposes including ODRM:
(a) Legal recognition of electronic records (section 4),
(b) Legal recognition of digital signature (section 5),
(c) Use of electronic records and digital signature in governmental dealings (section 6), (d) Retention of electronic record for certain period (section 7),
(e) Establishment of electronic gazette (section 8), etc.

These provisions will go a long way in building a conducive base for ODRM in India. However, these provisions provide only a non-absolute right to claim a sound e-governance base (section 9). This is the reason why till now no such ODRM has been established by the Government. Though, a grant of Rs 23,000 Crores has been sanctioned by the Government out of the public money for e-governance purposes yet the need to establish a sound and effective ODRM has not found favour with the Government. This is another drawback of the e-governance plan of India. The Governement must appreciate the need of ODRM for resolving disputes originating due to the liberalisation of its economy. It is also important to remember that the foreign countries are vary particular about getting their disputes resolved through ADR/ODR methods and India may find itself in an embarrasing situation if its ICT startegies are not modified accordingly. Equally important is the security and maintenance of these ODRMs that also seems to be missing in the present e-governance plan. For a successful ODR project technology plays only 15% role, while rest 85% role is being taken care of by project management. Human resource development of the existing workforce in order to inculcate appropriate skills and attitudes is a critical factor. Equally important is the establishment and set up of the basic infrastructure, which is conducive to the efficient functioning of the ODRM. A sound communication infrastructure is essential for easy access. It should be innovatively used to ensure that no section of society is deprived of the benefits arising therefrom. Governments have to learn to digitise documents quickly and effectively so that the ICT revolution becomes a reality in India.

Article sent to E-Arbitration-T by © Praveen Dalal. All rights reserved with the author.
* Arbitrator, Consultant and Advocate, Supreme Court of India.
Pursuing Ph.D in Cyber forensics.
Managing partner-Perry4Law (First Techno-Legal and ICT Law Firm, New Delhi, India).
Contact at: pd37@rediffmail.com/ perry4law@yahoo.com

[1] These are e-governance, e-commerce, security of ICT infrastructure, cyber forensics, computerisation of various governmental departments, etc.
[2] http://cyberlawindia.blogspot.com/2006/07/ict-strategy-in-india-need-of.html
[3] Praveen Dalal, “Techno-legal compliance in India: An essential requirement”, http://www.crime-research.org/articles/2130/
[4] http://www.supremecourtofindia.nic.in/new_s/pendingstat.htm
[5] http://www.indianjudiciary.in/
[6] I am trying the same and it is available at http://indian-judiciary.blogspot.com/ . This resource is based on the ground reality that mere computerisation will not serve the purpose. The resource titled “Electronic Courts in India” is making a database of different situations that the Courts may face while discharging the judicial functions.
[7] Maneka Gandhi v. U.O.I, AIR 1978 SC 597.
[8] Hussainara Khatoon (1) v. Home Secretary, State of Bihar, (1980) 1 SCC 81.
[9] Article 21 is a Fundamental Right that can be directly enforced in the Supreme Court under Article 32 of the Constitution of India. Fundamental Rights, as incorporated in Part III of the Constitution, are different from Constitutional Rights that cannot be directly enforced U/A 32. All Fundamental Rights are Constitutional Rights but not vice-versa.
[10] This agony is equally present in civil cases where the proceedings are dragged to numerous years before their completion.
[11] http://www.odr.info/THE%20CULTURE%20OF%20ADR%20IN%20INDIA.doc
[12] The Executive wing of the Indian Constitution.
[13] P.Ramachandra. Rao v. State of Karnataka, (2002)4 SCC 578.
[14] Justice Malimath Committee in 1990 stressed the importance of ADRM to supplement the legal forum with a view to decrease the burden of traditional courts.
[15] The Supreme Court and the High Courts.
[16] http://praveendalal.blogspot.com/2005/12/culture-of-adr-in-india.html
[17] http://www.odr.info/ONLINE%20DISPUTE%20RESOLUTION%20IN%20INDIA.doc