So what exactly is expert determination and how does it differ from other methods?

This is one of a number of private dispute resolution methods collectively referred to as alternative dispute resolution (ADR). Other ADR methods include arbitration and mediation.

In expert determination an independent expert is asked by the disputing parties to decide one or more issues between them. The experts are required to use their knowledge and experience to reach a decision based on their own investigation of the issues. The experts must act fairly and the parties must agree to be bound by the decision.

In England and Wales arbitration is supported and controlled by the Arbitration Act 1996, which supports the enforceability of arbitration awards locally and internationally. There is no similar statutory involvement in expert determination.

In arbitration, fairness is formalised by the Arbitration Act. The arbitrator can only undertake an investigation if permitted by the parties and must share the results with the parties. Unlike the arbitrator, the expert is not immune from actions for negligence. In mediation, the mediator helps the parties arrive at their own settlement.

Are there particular types of dispute that suit expert determination?

Expert determinations tend to be applied to technical disputes. The expert is usually chosen for their expertise. The types of dispute for an accountant acting as expert include: share/business valuation disputes; disputes in relation to completion accounts; deferred consideration disputes following a sale of a business; profit share disputes in partnerships and joint venture agreements; and disputes about the loss of profits from breach of contract.

There can be numerous subsidiary disputes in connection with facts and the interpretation of words, which may be outside the expertise of the expert.

Together with other procedural considerations, the expert may need to agree arrangements to enable these matters to be dealt with in a way that does not lead to the validity of his award in respect of the substantive issue(s) being undermined.

How are appointments as expert made and what happens if no agreement can be reached?

A dispute resolution clause may be included in a contract, for example in a sale and purchase agreement for a company, which requires that an expert is appointed to resolve the dispute by expert determination.

If the parties to the agreement have not named the expert, or they are unable to agree on an expert, the contract may provide that the appointment is made by the president of a particular professional body from among its members.

Alternatively, there may be no pre-existing contractual provision for the appointment of an expert to determine the dispute. The parties may decide to use expert determination to solve the dispute.

How does the whole process work and what can the parties expect in terms of fees?

The initial stage of an expert determination assignment involves completion of the engagement formalities and agreement of the expert’s powers. The expert will check whether these are sufficient and, if not, seek to agree those necessary to fulfil their mandate.

The expert will usually issue directions in relation to disclosure of documentation and exchange of submissions including content, sequence and timing.

It is not unusual for further procedural issues to emerge as the matter proceeds.

These may include: defining the issue(s) for determination; dealing with delay on the part of a party; and dealing with abuse of the established process generally.

The written decision of the expert may be by letter to the parties, or in some other form of notice. In arbitration, accompanying reasons for the decision are a requirement, subject to the parties choosing otherwise. In contrast, in expert determination, unless it is agreed that they are required, the expert need not give reasons.

In arbitration, unless the parties agree otherwise, the arbitrator is required to deal with their costs and is empowered to award interest. In contrast, in expert determination these matters may not be within the agreed brief. In any event, it may only be the allocation of the expert’s fees which are in issue as far as the expert is concerned. Alternatively, the parties may have agreed to share these costs.

How much does the whole process cost and how does it compare with other methods?

In expert determination there may be no hearing, reduced disclosure (being disclosure necessary to meet the expert’s requirements), relatively little legal representation required if any, and no reasons given with the award. As a consequence expert determination is likely to be significantly cheaper than litigation. Due to the less formal structure of expert determination, subject to the agreed arbitration process, it can similarly be cheaper than arbitration.

Source: ITweek, UK. Daniel Djanogly is a partner at Kingston Smith LLP.

“This new course is a unique opportunity for participants to gain insight into the different stages of any amicable dispute resolution procedure. Bringing together individuals from widely diverse professional and cultural backgrounds, the training creates an exceptional forum for exchanging experience and viewpoints,” said Melanie Meilhac, Manager, ICC (International Chamber of Commerce) Dispute Resolution Services.

ICC’s (International Chamber of Commerce) first ADR training session, held in Paris last April, attracted participants from 15 countries, reflecting the increased attention that the international legal community is giving to mediation and other methods of dispute resolution.

In recognition of the growing importance of the Asia Pacific region to ICC (International Chamber of Commerce) Dispute Resolution Services and the ICC (International Chamber of Commerce) International Court of Arbitration, ICC (International Chamber of Commerce) announced last week that it would open a branch of the Secretariat of the Court in Hong Kong with a case management team to administer cases in the region under the ICC (International Chamber of Commerce) Rules of Arbitration. ICC (International Chamber of Commerce) will locate the Director, ICC (International Chamber of Commerce) Arbitration and Amicable Dispute Resolution Asia in Singapore, where it will open a liaison office dedicated to ICC (International Chamber of Commerce) Dispute Resolution Services.

ADR operates under a set of rules that leaves parties free to choose the technique best suited to the circumstances. In addition to learning about mediation, participants in the new interactive course will become familiar with other amicable methods, such as neutral evaluation and mini-trial.

- 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 2008 International Forum on Online Dispute Resolution will take place in Victoria, British Columbia. This important conference will held at venues including Royal Roads University, and the Lester B. Pearson College of the Pacific on Vancouver Island June 18-19, 2008. The photograph is of Hatley Castle at Royal Roads University. The Forum has as its purpose the bringing together of the world’s leading practitioners, academics, theorists, and online negotiation application developers, to share information, and to create a vehicle for ODR education.

The 2008 International Forum on Online Dispute Resolution in Victoria will build on the research, applications and field development discussed at other international ODR meetings and workshops that were held in Geneva (2002 and 2003), Edinburgh (2003), Melbourne (2004), Bologna (2005), Brussels (2005), Cairo (2006), and Palo Alto (2007), Liverpool (2007) and Hong Kong (2007).

The 2008 International Forum on Online Dispute Resolution will consist of two days of plenary sessions and breakout sessions. The Forum brings together the world’s leading practitioners, academics, students, and civil society to discuss the resolution of disputes using online technologies. These disputes may range from b2c (Business to consumer) to the prevention of human rights violations in conflict regions, to reconciliation of opposing groups in armed conflict, to disputes over intellectual property on the internet. It also brings together the leading technology developers who design conflict resolution platforms for use legal, commercial, or insurance related disputes (i.e. PayPal). Keynote Speakers The organizing committee of the 2008 International Forum on Online Dispute Resolution notes that we have invited two special keynote speakers, Dr. Vinton Cerf, inventor of the Internet, and Dr. Jose Ramos Horta, Pax Nobel 1996 and President of East Timor). The presence of these notable persons on the world stage as our special guests indicates the importance and relevance of the Forum’s deliberations. The keynote speakers will add their unique perspectives on the possible uses of technology and the Internet to resolve disputes and create peace.

Agenda of the 2008 International Forum on Online Dispute Resolution

Wednesday June 18, 2008

0900 – 0930 Opening ceremony
0930 – 1000 What is ODR
1000 – 1040 Key note address for the day The Internet and Resolving Disputes
1040 – 1100 coffee break
1100 – 1200 The Uniform Domain Resolution Policy
1100 – 1200 Press conference
1200 – 1300 Lunch
1300 – 1500 Breakout groups

1) Technology presentations and demonstrations
2) Social – cultural aspects of ODR – assimilating cultural approaches to language, process, bidding to an online environment

1500 – 1520 coffee break
1520 – 1630 Breakout groups
ODR and Environmental concerns
ODR and Health Care
1630 – 1700 Day 1 summary
1700 – 1830 Reception

Thursday June 19, 2008
0800 – 0900 continental breakfast coffee
0900 – 0915 Housekeeping welcoming
0915 – 0945 ODR and First Nations
0945 – 1030 Keynote address Dr Ramos Horta, Peace and the internet
1030 – 1050 Coffee break
1050 – 1200 ODR and Business
1200 – 1300 Lunch
1300 – 1500 Breakout sessions
1) ODR and the Legal environment
2) ODR and Peace
3) ODR and developing nations
1520 – 1520 Coffee break
1520 – 1600 ODR Education
1600 – 1700 Plenary session
2008 International Forum on Online Dispute Resolution
More information: 2008 International Forum on Online Dispute Resolution

World of Arbitration In a civilised society, citizens look to the courts to settle their disputes. The courts put judges at the disposal of the parties, the courts determine the substantive and procedural law which is to be applied and the courts enforce their own orders through court officers, when necessary. It is a one-stop shop.

For those engaged in alternative dispute resolution – ADR, the courts are available not merely to enforce decisions and awards but also to supervise and control the chosen ADR procedures, should matters go awry.

Where disputes arise in the international arena, the picture is a little different because national courts are rarely acceptable to both sides. Disputes between states or between an individual and a foreign state or between an individual and an international organisation may be regarded as being in a special category, where the aggrieved party may have recourse to treaty arbitration. Examples are arbitration before the PCA1 and arbitration under the auspices of ICSID2. Beyond that special category, the parties must make express provision for dispute resolution in their agreement, failing which the aggrieved party will be left to seek his remedy from the domestic courts of one country or another, depending upon which will assume jurisdiction.

The result is a contrast. Whereas national courts often represent a convenient and acceptable means of dispute resolution for parties to a dispute which has no international element, there is no international equivalent. In consequence, most international disputes fall to be resolved through a process or by a tribunal which is essentially consensual in origin.

This paper is concerned with the resolution of disputes arising under international construction contracts. The purpose is to survey the available alternatives and to identify some of the considerations to be borne in mind by those concerned. In this last context, the emphasis is on two key considerations, being enforcement and applicable law.

Enforcement

It is convenient to note at this stage that there is more than one aspect to enforcement. Thus, we may distinguish between enforcement in the sense of ensuring implementation of the chosen disputes resolution procedure, on the one hand, and enforcement in the sense of giving effect to the resulting award or decision, on the other.

There are various conventions which bear upon enforcement. However, on the international stage, it is the New York Convention which is of most significance. Replacing the Geneva Convention of 1927, the New York Convention provides a simple and effective method of obtaining recognition and enforcement of foreign arbitral awards. By Article II, Contracting States agree to recognise arbitration agreements in writing and undertake that their courts, if seized of an action in respect of which the parties have made an arbitration agreement in writing, will, in principle, refer the parties to arbitration. Further, By Article III, awards made in the territory of a Contracting State, provided that they are made pursuant to an arbitration agreement in writing, are to be recognised and enforced by another Contracting State. Limited grounds for refusal of recognition and enforcement are set out in Article V. These are as follows:

Article V(1) (Conflict with the law of the State where the award was made or where the arbitration proceedings took place)

1. Incapacity of parties and invalidity of arbitration agreement.

5. Award not yet binding or already set aside or suspended.

Article V(2) (Conflict with the law of the State where recognition or enforcement is sought)

1. Dispute not capable of settlement by arbitration.

2. Recognition or enforcement contrary to public policy.

In applying such grounds for refusal of enforcement, it is customary for the courts of contracting states to allow a margin of appreciation in recognition of the fact that the award was made in another jurisdiction. For example, although ad hoc arbitration agreements are void under the PRC Arbitration Act 1995, the courts of the PRC have nevertheless chosen to enforce arbitration awards rendered by ad hoc tribunals in foreign jurisdictions, rather than invoking the public policy ground set out in Article V(ii)(b)5.

Applicable Law

The second key consideration concerns the applicable law. It is in the context of arbitration that the need to ascertain the applicable law is most acute. It has been said that, without undue sophistication, there are at least five different systems of law which may have a bearing on an international commercial arbitration6. Allowing for the fact that this paper is concerned not only with arbitration but also with other forms of ADR, the five may be expressed as follows:

1. The law governing the parties’ capacity to enter into an dispute resolution agreement;

2. The law which governs the dispute resolution agreement and its performance;

3. The law which governs the existence and proceedings of the mediator, conciliator or tribunal – sometimes known in the context of arbitration as the lex arbitri;

4. The law governing the substantive issues in dispute, generally described as the applicable law, the governing law, the substantive law or the proper law of the contract;

5. The law governing recognition and enforcement of the award or decision (which may in practice be more than one, if the attempt to enforce has to be made in more than one jurisdiction).

Having noted above a distinction between enforcement in different senses, it is to be observed that enforcement in the sense of ensuring implementation of the chosen disputes resolution procedure is governed by the law at (2) above, whilst enforcement in the sense of giving effect to the resulting award or decision is governed by the law at (5).

Mediation and Conciliation

The parties to an international dispute may embark on mediation or conciliation. If they do it will either be because the contract calls for it or because they have agreed to do so on an ad hoc basis. Various institutions involved in international dispute resolution have published protocols providing for mediation or conciliation, such as the ICE7, the ICC8, the LCIA9 and the HKIAC10.

Since such procedures depend largely for their success upon the parties reaching consensus, the fact that the dispute has an international element tends to have relatively little bearing on the proceedings, save that, for one party or the other (and perhaps both) the applicable substantive law may be foreign. However, the international element cannot wholly be overlooked. Those involved will wish to bear in mind the effect of anything said and done in the context of a mediation upon any subsequent means of dispute resolution to be undertaken if the mediation fails. For example:

1. The privilege against disclosure and production of documents which common lawyers associate with the epithet without prejudice is unknown in Greek law. Accordingly, if the ultimate arbitration is to be conducted according to Greek procedural law, the parties to any mediation process should be aware that any documents disclosed may ultimately come to the attention of the arbitral tribunal even if the parties purport to conduct the mediation on a without prejudice basis.

2. Parties who succeed in settling their dispute in mediation do well to include in the settlement agreement not only a term which identifies the law which governs the settlement agreement itself but also a term (if it can be agreed) to the effect that in the event of dispute both parties agree to submit to the jurisdiction of a particular national court.

It may also be necessary to have the law applicable to enforcement in mind when considering the possibility of dispensing with mediation even though it is expressly provided for. Thus, if the disputes resolution procedure laid down by the contract makes mediation a condition precedent to arbitration, the party who fails to cooperate in mediation may do so at its peril. The court from whom enforcement is sought might decline to do so under Article V of the New York Convention, either upon the basis that the arbitral procedure was not in accordance with the agreement of the parties (Article V(1)(d)) or on the basis that enforcement would be contrary to public policy (Article V(2)(b)).

A similar problem might arise in with the process sometimes known as “Med-Arb”. In, for example, the PRC an arbitral tribunal may well find itself acting as mediator and conciliator. In that jurisdiction, there is no objection to the tribunal subsequently resumed its arbitral function, provided that the award is rendered promptly. But, whereas such a procedure would be regarded as quite normal in the PRC, it might not be seen in the same light elsewhere. Accordingly, there is a risk that if enforcement were sought in some other jurisdiction, it might well be resisted under the New York Convention on public policy grounds.

Disputes Boards

For a project of any size involving contracting parties of different national origins, the contract which provides for the interim resolution of disputes on referral by a Disputes Board11 is now the rule rather than the exception. The rules under which such a body operates tend to vary from project to project. However, a degree of standardisation has been introduced as a result of the publication of standard rules both by the ICC12 and by FIDIC13.

Typically, the Disputes Board is appointed at the commencement of the project; its members are required to visit the site periodically and to familiarise themselves with the works; disputes come before the Disputes Board only upon referral by one or other of the parties; and the Disputes Board’s decision (or “recommendation”) binds the parties, subject to review by an Arbitral Tribunal (or, more rarely, by the courts).

Once again, the international element of the dispute tends to have little bearing on the proceedings conducted before the Disputes Board. However, practitioners still need to take into account the effect of different systems of law. Thus:

1. The enforceability of the Disputes Board procedure will be governed by the law which governs the disputes resolution provisions generally.

2. The enforceability of the Disputes Board’s decision will be governed by the law of the state in which enforcement is sought.

Let it be supposed that a substantial infrastructure is part complete when a dispute over valuation arises, leading the contractor to issue a threat to suspend all work on the relevant part of the project unless its demands for payment are met. Let it be supposed further that the employer then seeks injunctive relief to restrain the contractor from carrying out its threat. The contractor maintains that the court ought to decline jurisdiction in favour of the Disputes Board constituted in accordance with the Disputes Resolution provisions. The issue for the court is whether or not to enforce the contractual procedure. Many will recognise these as the outline facts of the Channel Tunnel case14. As is well known, the House of Lords preferred to enforce the contractual disputes resolution procedure. In doing so, it may be regarded as having applied the law governing the dispute resolution agreement and its performance.15

The moral of the tale is that the practitioner should keep well in mind the likely attitude of the courts in the state in which enforcement action might be taken.

Treaty Arbitration

The PCA situated at The Hague was established by the Convention for the Pacific Settlement of International Disputes included at The Hague in 1899 and revised in 1907. Where the relevant state is a party to one or other of the two Hague Conventions, a dispute may be referred to the PCA where at least one party is a state, state entity or an intergovernmental organisation.

ICSID was established by the Washington Convention of 1965,16 better known as the ICSID Convention. It gives both private individuals and corporations who are “investors” in a foreign state the right to bring legal proceedings against that state before an international arbitral tribunal. “Investors” in this context include a foreign contractor implementing a construction project in the territory of the state in question. Here, the source of authority to arbitrate is a bilateral investment treaty. For the contractor who qualifies as an “investor”, this offers the opportunity to institute proceedings before an international Arbitral Tribunal administered by ICSID in Washington. The advantages to the “investor” are that there is no fear of the outcome being influenced by the Respondent state as there might be if the dispute could only be litigated or arbitrated within the borders of that state. Furthermore, state immunity is much restricted.

A full review of ICSID arbitration is beyond the scope of this paper. However, a particular problem to be noted is that which can arise where the underlying construction contract itself provides for the arbitration of disputes. In such a case, what sometimes appears to be a contest between two tribunals can arise in the event that one party purports to refer to a dispute to the contract tribunal, whilst the other purports to refer the same dispute to a tribunal constituted by ICSID.17

Arbitration pursuant to Agreement

Turning to arbitration pursuant to agreement, there is a distinction between an arbitration agreement incorporated into the contract at the outset and an arbitration agreement which is concluded ad hoc. But, either way, the threshold questions concern what is agreed or provided for as to the constitution of the Tribunal and what procedural law is be applied.

Parties commonly agree that the dispute is to be arbitrated in accordance with specified institutional rules such as those of UNCITRAL,18 the ICC,19 the Stockholm Chamber of Commerce,20 the HKIAC,21 CIETAC,22 SIAC23 and the Swiss Chambers of Commerce.24 In such a case, these threshold questions are likely to be provided for, if not agreed.

Where the parties do not adopt institutional rules, matters such as the constitution of the tribunal and the choice of procedural law fall to be settled in the event of dispute by the courts of the state in which the arbitration takes place. In English law, the approach would be to resolve such disputes by reference to the law which governs the arbitration agreement.

Thus, in the Star International case,25 the contractual arbitration clause was silent as to the procedural rules to be followed. After the award had been published, the unsuccessful party sought to challenge it on the basis that no oral hearing had been held. The court, applying English law, held that the absence of a hearing did not amount to unfairness and declined to interfere with the award.

Once the tribunal has been constituted and the procedural rules identified, practitioners are likely to find it necessary to refer to any one or more of a number of different systems of law.

Let it be supposed, for example, that the claimant seeks interim conservatory relief, perhaps an order that an area of allegedly defective flooring be preserved so that forensic tests can be conducted. In the first instance, there is a question whether the tribunal has jurisdiction to make such an order. The answer to that question will depend on the lex arbitri. In many cases, institutional rules expressly confer jurisdiction upon the tribunal to make such an order. Beyond that, if the tribunal does make an order, there is a question whether the local court should enforce it. The answer to that question will depend in part on the lex arbitri, in that the court would be unlikely to enforce an order made without jurisdiction. But it may depend also on the law of the state in which enforcement is sought. In the PRC, for example, it is unlikely that such an order would be enforced, since it seems that it is only the court which is regarded as having power to order interim relief.

Then again, let it be supposed that, following publication of the award, the losing party seeks to challenge it. The question whether or not the award can be challenged may depend in part on the lex arbitri. Thus, for example, the ICC Rules are regarded at least in England and Wales as excluding appeals26. But if the institutional rules are silent on the point, the question of challenge may depend on the law of the place of the arbitration. So, if such a situation were to arise in a case where the arbitration took place in, say, South Korea, the court would be likely to assume jurisdiction to set aside the award on grounds similar to those given in Article V of the New York Convention for refusing enforcement, provided that an order for enforcement has not already been made.27

In the same way, there are a number of circumstances in which the practitioner will wish to have in mind not only the lex arbitri but also the law of the state in which the arbitration takes place. These include where a party seeks to restrain the tribunal from proceeding at all, where a party seeks security for costs,28 where a party seeks to sub-poena witnesses; where a party seeks an order for disclosure of documents from a non-party; where a party seeks to challenge an award for lack of due process,29 and so on.

Discusion about this paper in Keating Chambers – United Kingdom – International Dispute Resolution website:
Article by John Marrin QC
United Kingdom: International Dispute Resolution.

http://www.mondaq.com/article.asp?articleid=44022&searchresults=1

The 5th Anniversary International Competitions for Online Dispute Resolution are open for registration! The free competitions offer law students worldwide an opportunity to practice and demonstrate their ADR and litigation skills working in a technological environment on the international plane.

The only requirements are that students have access to the internet and permission of a faculty member to participate. Student competitors are evaluated anonymously by experienced professionals from ADR and Litigation from around the world
.
The competitions will run over the following periods:
Litigation: January 20 – March 20, 2006
Arbitration: February 1 – March 31, 2006
Mediation: Round One : February 6-13,
2006; Round Two February 16-23, 2006
Negotiation: Round One: February 27-March 6; Round Two March 10-17, 2006

Problems for the negotiation and mediation competitions are graciously provided by the Harvard Program on Negotiation. Problems for the arbitration and litigation competitions are graciously provided by the International Chamber of Commerce Institute of World Business Law.
We are pleased to once again have West Workspace/Erooms Technology as our sponsor and platform provider for the competition.
To see previous competitions please visit the ICODR portal.
As part of this 5th anniversary ICODR celebration, please note the call for papers for the University of Toledo Law Review International Symposium on April 21-22, 2006 in Toledo, Ohio entitled “Enhancing Worldwide Understanding through Online Dispute Resolution.

Questions or comments? Please contact Ben Davis (bdavis8(at)UTNet.UToledo.Edu) or Alan Gaitenby (gaitenby@disputes.net)

The swift growth of e-commerce and web site contracts has increased the potential for conflicts over contracts which have been entered into online. This has necessitated a solution that is compatible with online matters and is netizens centric. This challenging task can be achieved by the use of ODRM in India. 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. These ODRM are 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, ADR techniques are extra-judicial in character. They 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, industrial and family 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. ADR offers the best solution in respect of commercial disputes. However, ADR 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 ADR cannot substitute courts. In those situations one has to take recourse of the existing traditional modes of dispute resolution.

II. THE PREMIER MODE OF ADR

Arbitration is the supreme method for resolving and adjudicating commercial disputes . It is a procedure in which the dispute is submitted to one or more arbitrators, for adjudication, who resolve the dispute. The decision is given in the form of an award. The main objects of arbitration are speed, economy, convenience and simplicity of procedures. It encourages healthy relationship between the parties. The Arbitration and Conciliation Act, 1996 governs the ?arbitration procedures? in India. Section 5 of the Act provides that notwithstanding anything contained in any other law for the time being in force, in matters governed by Part I (Sections 2 to 43), no judicial authority shall intervene except where so provided in the said part. This clearly indicates the legislative intent to minimise supervisory role of courts to ensure that the intervention of the court is minimal. Section 4 is a deeming provision, which lays down that where a party proceeds with the arbitration without stating his objection to non-compliance of any provision of Part I from which the parties may derogate or any requirement under arbitration agreement, it shall be deemed that he has waived his right to so object. Section 7 provides that the arbitration agreement shall be in writing and such an agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. Sub-section (4) of Section 7 provides the conditions under which a document or exchange of letter or exchange of statement of claim and defence may amount to an arbitration agreement. Section 11 of the Act provides for appointment of arbitrators and sub-section (6) thereof empowers the Chief Justice of the High Court or any person or institution designated by him to make such an appointment on the happening of certain conditions enumerated in clauses (a), (b) or (c). Section 16 of the Act is important and it provides that the arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or authority of the arbitration agreement . Thus, the base provided by the Act is sufficient to accommodate the mandates of ODRM. It must be noted that a court of law cannot render justice unless the ultimate decision is based on the contemporary law as prevailing in the society. A decision based on an old law, which does not satisfy the requirements of the present situation, and environment should be avoided. In such a situation the efforts of the courts should be to give the law a “purposive, updating and an ongoing interpretation”. This position makes the interface of justice delivery system with the information technology inevitable and unavoidable. We cannot allow the dead hand of the past to stifle the growth of the living present. Law cannot stand still; it must change with the changing social concepts and values. If the bark that protects the tree fails to grow and expand along with the tree, it will either choke the tree or if it is a living tree, it will shed that bark and grow a new living bark for itself. Similarly, if the law fails to respond to the needs of changing society, then either it will stifle the growth of the society and choke its progress or if the society is vigorous enough, it will cast away the law, which stands in the way of its growth. Law must therefore constantly keep on adapting itself to the fast changing society and not lag behind . Justice is supreme and justice ought to be beneficial for the society so that the society is placed in a better-off situation. Law courts exist for the society and ought to rise up to the occasion to do the needful in the matter, and as such ought to act in a manner so as to sub serve the basic requirement of the society. It is a requirement of the society and the law must respond to its need. The greatest virtue of the law is its flexibility and its adaptability; it must change from time to time so that it answers the cry of the people, the need of the hour and the order of the day. Thus, the justice delivery system cannot afford to take the information technology revolution lightly . The judiciary in India has not only recognised this need but has also utilised the information technology to do complete justice. The Supreme Court has on various occasions encouraged the use of information technology for meeting the ends of justice and to do complete justice. There is nothing that shows that the courts in India will not encourage the concept of ODRM in India. The Supreme Court has encouraged the use of ADR techniques in India and very soon the same will be extended to ODRM as well.

III. E-JUSTICE SYSTEM IN INDIA

The judicial response vis-?-vis information technology is positive and technology friendly.

In M/S SIL Import, USA v M/S Exim Aides Silk Exporters the words “notice in writing”, in Section 138 of the Negotiable Instruments Act, were construed to include a notice by fax. The Supreme Court observed: “A notice envisaged u/s 138 can be sent by fax. Nowhere is it said that such notice must be sent by registered post or that it should be dispatched through a messenger. Chapter XVII of the Act, containing sections 138 to 142 was inserted in the Act as per Banking Public Financial Institution and Negotiable Instruments Laws (Amendment) Act, 1988.Technologiacl advancements like Fax, Internet, E-mail, etc were on swift progress even before the Bill for the Amendment Act was discussed by the Parliament. When the legislature contemplated that notice in writing should be given to the drawer of the cheque, the legislature must be presumed to have been aware of the modern devices and equipments already in vogue and also in store for future. If the court were to interpret the words “giving notice in writing” in the section as restricted to the customary mode of sending notice through postal service or even by personal delivery, the interpretative process will fail to cope up with the change of time. So if the notice envisaged in clause (b) of the proviso to section 138 was transmitted by Fax, it would be compliance with the legal requirement”.

Thus the requirement of a written notice will be satisfied if the same is given in the form of a fax, e-mail etc, using the information technology. It must be noted that a notice by e-mail can be send instantaneously and its delivery is assured and acknowledged by a report showing the due delivery of the same to the recipient. This method is more safe, accurate, economical and lesser time consuming as compared to its traditional counterpart, popularly known as “Registered A.D”.

In Basavaraj R. Patil v State of Karnataka the question was whether an accused need to be physically present in court to answer the questions put to him by the court whilst recording his statement under section 313. The majority held that the section had to be considered in the light of the revolutionary changes in technology of communication and transmission and the marked improvement in the facilities of legal aid in the country. It was held that it was not necessary that in all cases the accused must answer by personally remaining present in the court. Once again, the importance of information technology is apparent. If a person residing in a remote area of South India is required to appear in the court for giving evidence, then he should not be called from that place, instead the medium of “video conferencing” should be used. In that case the requirements of justice are practically harmonised with the ease and comfort of the witnesses, which can drastically improve the justice delivery system.

In State of Maharashtra v Dr.Praful.B.Desai the Supreme Court observed: “The evidence can be both oral and documentary and electronic records can be produced as evidence. This means that evidence, even in criminal matters, can also be by way of electronic records. This would include video conferencing. Video conferencing is an advancement in science and technology which permits one to see, hear and talk with someone far away, with the same facility and ease as if he is present before you i.e. in your presence. Thus, it is clear that so long as the accused and/or his pleader are present when evidence is recorded by video conferencing that evidence is recorded in the “presence” of the accused and would thus fully meet the requirements of section 273, Criminal Procedure Code. Recording of such evidence would be as per “procedure established by law”. The advancement of science and technology is such that now it is possible to set up video conferencing equipments in the court itself. In that case evidence would be recorded by the magistrate or under his dictation in the open court. To this method there is however a drawback. As the witness is not in the court there may be difficulties if commits contempt of court or perjures himself. Therefore as a matter of prudence evidence by video conferencing in open court should be only if the witness is in a country which has an extradition treaty with India and under whose laws contempt of court and perjury are also punishable”.

This judgment of the Supreme Court is a landmark judgment as it has the potential to seek help of those witnesses who are crucial for rendering the complete justice but who cannot come due to “territorial distances” or even due to fear, expenses, old age, etc. The Courts in India have the power to maintain anonymity of the witnesses to protect them from threats and harm and the use of information technology is the safest bet for the same. The testimony of a witness can be recorded electronically the access to which can be legitimately and lawfully denied by the Courts to meet the ends of justice.

The above discussion shows that the judiciary in India is not only aware of the advantages of information technology but is actively and positively using it in the administration of justice, particularly the criminal justice. Thus, it can be safely concluded that the “E-justice system” has found its existence in India. It is not at all absurd to suggest that ODRM will also fine its place in the Indian legal system very soon.

IV. ONLINE 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 ADR mechanism 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. A number of web-sites provide for some type of online dispute resolution method like arbitration, negotiation, mediation etc. and also certain conflict management services. These services fall into the general categories of complaint handling, negotiation, mediation and arbitration. These services 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 Act give options to the parties to opt for the procedure as per their agreement during the arbitral proceedings before the arbitrator. So if there is an agreement between the parties with regard to the procedure to be followed by the arbitrator, the arbitrator is required to follow the said procedure. However, this would not mean that in appeal parties can contend that the appellate procedure should be as per their agreement. The appellate procedure would be governed as per the statutory provisions and parties have no right to change the same . It must be noted that party autonomy presupposes the existence of an arbitration agreement. There may be a situation where the parties had not entered into an arbitration agreement. To meet such situations Sec.89 of CPC can be invoked. The reason for inserting Sec.89 has been to try and see that all the cases which are filed in the court need not necessarily be decided by the court itself. Keeping in mind the law delays and the limited number of judges, which are available, it has now become imperative to resort to ADR Mechanism as contemplated by Sec.89. There is a requirement that the parties to the suit must indicate the form of ADR, which they would like to resort to during the pendency of the trial of the suit. If the parties agree to arbitration, then the provisions of the Arbitration and Conciliation Act 1996 will apply and that will go outside the stream of the court .

V CONCLUSION

The need and necessity of ODRM is going to be felt very soon and we must be prepared for the same. A sound techno-legal base must be established in advance. There is a possibility that we may get BPO services in arbitration matters in the distant future. In any case it is also a mandate of Article 21 of the Constitution of India. Art.21 confers a Fundamental Right on every person not to be deprived of his life or liberty, except according to procedure established by law. Such procedure is not some semblance of a procedure but the procedure should be ?reasonable, fair and just?, and therefrom flows the right to speedy trial . It cannot be doubted that if the State is encouraging ODRM it is thereby assisting in the attainment of a speedier, economical and convenient justice system. Thus, the sooner ODRM is adopted the better it will be for the nation in general and the justice seeker in particular.

Praveen Dalal
Arbitrator, consultant and attorney
Delhi High Court, India.

E-mail:pd37(at)rediffmail.com
Contact at: +91 9899169611

The Center for Information Technology and Dispute Resolution at the University of Massachusetts (CITDR) invites you to participate in the seventh annual online dispute resolution Cyberweek.

This is an all-online Web based conference with no fee for participation and registration. A few of the opportunities planned for Cyberweek include:

* Release of the new ODR library and database

* Discussions with leading practitioners and theorists about the present and future of ODR

* Report on the UN Forum on ODR 2004

* The 2005 International Competition on Online Dispute Resolution (presently ongoing)

* Seminar on the challenges in planning and implementing ODR efforts – examples from Sri Lanka, the Phillipines and Great Britain

* Panel discussion on teaching ODR * Seminar on public sector ODR – the University of Massachusetts/National Mediation Board/National Science Foundation project

* Demonstration of teaching and collaborating in groups with Moodle

* Simulated dispute resolution processes

* Demonstrations involving ConflictLab.com, SmartSettle.com, Info-Share.org and others.

Tuesday 7 December 2004, 14:00 – 17:00 at Tilburg University, Building A, Room AZ 186
ICTs have the potential to enhance and revolutionize conflict resolution mechanisms by making these processes more efficient and cheaper. The lectures will give an in-depth introduction to the emerging field of Online Dispute Resolution (ODR) and will discus the benefits of and challenges for ODR technology.

Programme

14:00 – 14:05 dr. Ronald Leenes Welcome

14:05 – 14:35 prof. Maurits Barendrecht
Access to Courts and Civil Procedure Rules? Key Features of Effective
Institutions for Dispute Resolution

14:35 – 15:05 mr. Berend de Vries
ODR: Challenges and Opportunities for Enhancing Dispute Resolution

15:05 – 15:15 Discussion: ADR/ODR – a solution? For what?

15:15 – 15:30 tea break

15:30 – 16:00 dr. Arno Lodder
How to support parties in ODR best? Fundamental and practical
guidelines on the use of technology

16:00 – 16:30 prof. John Zeleznikow
Using game theory and artificial intelligence to provide support with
regard to trade offs – a case study.

16:30 – 16:45 dr. Ronald Leenes
Layla, the Layman’s legal assistant, glimpse of a new research project

16:45 – 17:00 Discussion: ODR technology

17:00 Cocktail reception

For more information, see

http://www.uvt.nl/faculteiten/frw/onderzoek/schoordijk/tilt/lectures/lectures.html.

You can attend free of charge, please …

register via e-mail
(b.r.devries)uvt.nl.

Kind Regards,

Berend de Vries
Tilburg University
Tilburg Institute for Law, Technology, and Society (TILT)
www.uvt.nl/tilt
Tel. +31 (0)13 466 8193
Tel. +31 (0)13 466 8199

http://ssrn.com/author=356185

All that the student needs is access to the internet with a browser and permission of a faculty member to participate. Schools in Australia, Canada, Ireland, New Zealand, Singapore and the United States have expressed interest so far. For further information about fielding teams or acting as an evaluator, please go to http://www.odr.info/icodr2005.php or contact Alan Gaitenby at gaitenby(at)disputes.net or Benjamin Davis at ben.davis(at)utoledo.edu.

Best regards,

Benjamin Davis
Associate Professor of Law
University of Toledo College of Law
2801 W. Bancroft Street
Toledo, Ohio 43606
Tel.: 1 419 530 5117
Fax: 1 419 530 2439
E-mail:ben.davis(at)utoledo.edu

To participate, law students need only have 1) access to the internet through a browser and 2) permission of a faculty member. The competitions are free of charge. This year we will again have online negotiation, mediation, and arbitration competitions. As a new development we will also hold a prototype online litigation competition.
ICODR Registration (schools and evaluators)
ICODR 2005 Negotiation Competition Rules and Schedule
ICODR 2005 Mediation Competition Rules and Schedule
ICODR 2005 Arbitration Competition Rules and Schedule
ICODR 2005 Prototype Litigation Competition Rules and Schedule

The Process:

Over the past three years we have held online negotiation, mediation, and arbitration competitions between teams from law schools around the world. Law students have opportunities to role play as advocates for claimants and respondents as well as neutrals in each of the competitions. Hypothetical cases used have been designed by law professors or been provided by the Harvard Program on Negotiation. Distinguished professionals from around the world have participated as evaluators.

Through ICODR 2004 ten technologies have been graciously provided free of charge including Online Resolution, West Workspace/Erooms Technology, Squaretrade.com, and several in the eNegotiation group (SimpleNS, MeetingOne, WebNS, The Negotiating Room, and Negoisst, Inspire, Family_Winner, and SmartSettle).

The Hong Kong International Arbitration Centre, the International Chamber of Commerce International Court of Arbitration, the Arbitration and Mediation Centre of the World Intellectual Property Organization, the London Court of International Arbitration, the Permanent Court of Arbitration at the Hague, and the International Centre for Dispute Resolution of the American Arbitration Association have permitted us over the past years to make reference to them when students are appointed neutrals in the arbitration competition ? to help the realism of the experience.

To participate law students express interest through faculty members (i.e. coaches), in each competition team(s) are assigned roles and given hypotheticals to prepare, and then the students participate anonymously by accessing a platform in cyberspace for conducting conflict management.
Student roles in 2005 will be as advocate for their client in the negotiation competition, as advocate for their client or as mediator in the mediation competition, as advocate for their client or arbitrator in the arbitration competition, and as advocate for their client or judge in the prototype litigation competition.

Evaluators have access to the rooms in which the students are acting and can read what the students submit to evaluate the effectiveness of each student team. The most effective teams in each role in each competition are recognized.

Schedules and other information:

Hypotheticals are scheduled to be handed out in early January 2005.
The Online Negotiation competition will be held in two rounds in February and March 2005. Round 1 (February 20-27), Round 2(March 2-5), Results posted April 15.
The Online Mediation competition will be held in two rounds in February 2005. Round 1 (February 6-13), Round 2(February 16-20), Results posted April 15.

The Online Arbitration competition will be held in one round over two months in February and March 2005. Round: February 1 ? March 31, Results posted May 15. Advocates will participate as Claimant in one room and Respondent in another room. To the extent possible student arbitrators will serve in two rooms and – depending on numbers – in arbitral tribunals of 3 members.
The prototype Online Litigation competition will be held over two months in February through April 2005. Round: February 15 ? April 15, Results posted May 15. Advocates will participate as Plaintiff/Claimant in one room and Defendant/Respondent in another room. To the extent possible student judges will serve in two rooms.

West Workspace/Erooms Technology has accepted to be the technology for the ICODR 2005 competitions. To explore a past year of the competition on this platform, please go to

https://www.westworkspace.com/eroom/icodr2003

Username: observer2004
Password: observer2004

If prompted click on browser only
For more information please contact:

Alan Gaitenby
Assistant Director
Center for Information Technology and Dispute Resolution
University of Massachusetts
Amherst, Massachusetts
Tel.: 1 413 577 1394
email: gaitenby@disputes.net

Benjamin Davis
Associate Professor of Law
University of Toledo College of Law
2801 W. Bancroft Street
Toledo, Ohio 43606
Tel.: 1 419 530 5117
Fax: 1 419 530 2439
E-mail:ben.davis(AT)utoled