Online Dispute Resolution (ODR) in India

Online Dispute Resolution (ODR) in India signifies a revolutionary transition from conventional courtrooms to a digital justice delivery system. It strives to be accessible, resilient, and results-driven, broadening the scope of justice delivery beyond the confines of courts. Initiatives like the eCourts Mission Mode Project demonstrate the judiciary’s forward-thinking approach in adopting Information and Communication Technology (ICT) for efficient dispute resolution, aligning with the constitutional principle of ‘justice for all’.

The pandemic has highlighted the importance of trust, assurance, and efficiency in economic recovery, positioning ODR as a pivotal solution. It capitalizes on advancements in Artificial Intelligence (AI), big data, Machine Learning (ML), and blockchain to seamlessly integrate into legal procedures, such as blockchain-enabled arbitration for smart contracts.

ODR surpasses traditional Alternative Dispute Resolution (ADR) mechanisms by potentially serving as a fourth party equipped with algorithmic tools for intelligent resolution assistance. Its evolution has progressed through three stages: initial adoption by e-commerce platforms, the emergence of ODR start-ups, and incorporation by governments and judiciaries. Diverse ODR models are now available, including private platforms, government-backed programs, and court-affiliated systems.

From a legal perspective, ODR in India is backed by the Code of Civil Procedure, 1908, which endorses ADR methods, including ODR. The Arbitration and Conciliation Act, 1996, is in line with the UNCITRAL Framework, offering a harmonized standard for ADR and ODR. The Information Technology Act, 2000, acknowledges electronic records and signatures, which are vital for ODR’s digital transformation. These legal frameworks, coupled with the judiciary’s endorsement, lay the groundwork for a wider application of ODR in India. 

GLOBAL ODR PLATFORM EXPANSION

In the past twenty years, Online Dispute Resolution (ODR) has experienced considerable expansion. ODR platforms globally handle a variety of disputes, encompassing those originating from online transactions and conventional issues such as labour and tenancy disputes.

Government-Operated ODR Platforms:

1. Brazil – Consumidor.gov: Manages consumer disputes. The resolution process includes complaint filing, company response, and consumer feedback. The platform collaborates with various consumer rights protection bodies and provides free services.
2. European Union – The European Online Dispute Resolution Platform: Manages consumer disputes. The platform enables direct resolution or through an ODR service provider. The EU collaborates with over 750 ODR service providers across Europe.
3. Hong Kong – COVID-19 Online Dispute Resolution (ODR) Scheme: Manages disputes arising from the COVID-19 pandemic. The scheme provides a multi-tiered dispute resolution process involving negotiation, mediation, and arbitration.
4. Mexico – Concilianet by PROFECO: Manages consumer disputes. The resolution process includes registration, complaint submission, and online conciliation hearing.
5. South Korea – E-Commerce Mediation Committee (ECMC): Manages e-commerce and E-transactions disputes. The ECMC provides dispute resolution through various communication modes.
6. United Kingdom – UK Financial Ombudsman: Manages disputes between financial businesses and customers. The resolution process includes initial assessment and review by the ombudsman.
7. United States – TAGS by FMCS: Manages labor disputes. It utilizes technology tools for efficient group problem-solving and decision-making.

Court-Annexed ODR Platforms:

1. Canada – British Columbia Civil Resolution Tribunal (CRT): Manages various disputes including motor vehicle injury and small claim disputes. The entire dispute resolution process is conducted online.
2. China – Beijing Internet Court: Manages civil and administrative disputes originating from e-commerce and the internet. The court provides a comprehensive online mediation service.

1. China – Hangzhou Internet Courts: Manages civil and administrative disputes originating from e-commerce and the internet. The court provides an online pre-litigation mediation service.
2. China – Zhejiang Province’s ODDRP: Manages various disputes including e-commerce and contractual disputes. The platform provides a tiered model of dispute resolution.
3. Singapore – Singapore State Courts e-negotiation and e-mediation platforms: Manages disputes before the Small Claims Tribunal (SCT), Community Disputes Claims Tribunal (CDCT), and Employment Claims Tribunal (ECT).
4. UAE – Dubai International Finance Centre Courts (DIFC): Manages commercial disputes, filings, wills, etc. The courts function as courts of first instance and appeal.
5. United Kingdom – Money Claim Online: Manages money claims. The resolution process includes registration, claim issuance, and defendant response.
6. United Kingdom – Online Civil Money Claim: Manages money claims. The platform enables dispute resolution through negotiation and mediation.
7. United States – Michigan Courts MI-Resolve: Manages civil disputes. The platform provides services like direct access to legal information, document sharing facility, asynchronous communication, and video conferencing.
8. United States – New Mexico Courts Online Dispute Resolution Center: Manages debt & money due cases. The platform provides a platform to negotiate and arrive at a settlement.
9. United States – Ohio’s Franklin County Municipal Court (FCMC): Manages small value claims. The court provides a platform for conversation and negotiation between parties to reach a settlement.

INDIA ONLINE DISPUTE RESOLUTION (ODR) INITIATIVES

The Indian Government has indeed acknowledged the potential of Online Dispute Resolution (ODR) and has launched several initiatives to bolster it.

ODR Adoption by Government Departments and Ministries:

1. NIXI: Addresses domain disputes online.
2. Consumer Affairs: Provides INGRAM, a consumer grievance redressal mechanism.
3. Department of Justice: Advocates for ODR adoption.
4. MSME SAMADHAAN Portal: Resolves dues for small businesses.
5. Draft National e-Commerce Policy: Suggests ODR for e-commerce disputes.
6. RBI’s ODR Policy on Digital Payments: Handles digital payment-related disputes.

Legislation Supporting ODR Technology:

1. Indian Evidence Act, 1872: Sections 65-A and 65-B acknowledge electronic evidence and establish conditions for its admissibility. These provisions guide the regulation of virtual documents and virtual hearings.
2. Information Technology Act, 2000: Sections 4 and 5 grant legal recognition to electronic records and signatures, crucial for end-to-end digitization of justice delivery.

This growth has been propelled by several factors:

1. E-ADR Challenge: Organized by Agami, a non-profit organization, in partnership with ICICI bank in 2019, this challenge aimed to identify promising start-ups that could resolve disputes online. ICICI bank pledged to send 10,000 of its disputes, each valued below INR 20 lakhs, for resolution through ‘Sama’, the winning ODR start-up.
2. Collaboration with Judiciary: The collaboration between the private sector and the judiciary, as seen in the case of e-Lok Adalats, has been successful in resolving disputes.
3. Recognition and Legitimacy: The Department of Legal Affairs has recently invited applications from institutes providing ADR/ODR services in the country to host a list of these service providers on its website. This move provides recognition and legitimacy to these start-ups.
4. Dispute Resolution Centres Adopting ODR The Indian Institute for Arbitration and Mediation has developed an ODR Platform called Peacegate, aiming to integrate all aspects of ADR from filing to back-office support. • Bangalore International Mediation, Arbitration and Conciliation Centre has been offering online arbitration, conciliation, and mediation services since 2013.
5. Mumbai Centre for International Arbitration provides a video conferencing facility to enable online arbitration proceedings.
6. Delhi Dispute Resolution Society introduced an initiative called SEHMATI, dedicated solely to ODR.

Moving forward, a crucial question that will need to be addressed is how the growth and innovation in the private sector can be facilitated while balancing the need for adherence to principles of natural justice, and basic standards in data protection, privacy, and confidentiality. 

CHALLENGES FACED IN ADOPTION OF ODR

The challenges for Online Dispute Resolution (ODR) can be grouped into three primary areas:

Structural Challenges

1. Digital Infrastructure: A robust technology infrastructure nationwide is a prerequisite for ODR integration. This includes access to computers,
   smartphones, and medium to high bandwidth internet connection.
2. Digital Literacy: Broad digital literacy is a precondition for ODR. In India, this digital literacy often varies across age, ethnicity, and geography.
3. Divide in Access to Technology: There is a divide in terms of access to technology across gender, geography, class, and age in India.

Behavioural Challenges

1. Lack of Awareness Regarding ODR: ODR is at a very early stage in India. Hence, it is crucial to build awareness regarding ODR.
2. Lack of Trust in ODR Services: This mistrust arises at several levels – from skepticism about technology to questions about the enforceability of ODR outcomes.
3. Legal Culture: It is often challenging to introduce ODR in countries where people rely more on courts and there is low penetration of ADR mechanisms for dispute resolution.
4. Role of the Government and the PSUs: The Government and Public Sector Undertakings (PSUs) are among the biggest litigants in India. Adoption of ODR to resolve inter and intra Governmental disputes would be a key step in boosting confidence in the process.

Operational Challenges

1. 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.
2. 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.
3. Archaic Legal Processes: The Supreme Court in Garware Walls Ropes Ltd. v Coastal Marine Constructions & Engineering Ltd. held that an arbitration agreement cannot be given effect unless the stamp duty is paid.
4. Enforcement of the Outcome of ODR Process: A key challenge towards meeting the objectives of this report itself is the existing uncertainty regarding enforcement of ODR outcomes.

It is recommended that the following components form a part of the training standards for ODR professionals:

Basic Training:

1. Understand all types of ODR, including eADR and algorithmic resolutions.
2. Algorithmic resolutions refer to using automated processes, often driven by artificial intelligence (AI), to assist in resolving disputes.
3. These algorithms analyze data, apply predefined rules, and make decisions without direct human intervention.
4. Adapt offline ADR techniques to the online environment.

Who Can Become an Arbitrator in India?

• No specific legal requirements.
• Beneficial to have a law background and experience in arbitration.
• Additional certifications in Alternative Dispute Resolution (ADR) can enhance credibility.
• No need to register with the Arbitration Council of India (ACI).

Challenging an Arbitration Award in India:

• Cases can be filed under Section 34 of the Arbitration and Conciliation Act, 1996.
• Grounds include incapacity of a party, invalidity of the arbitration agreement, improper notice, decisions beyond the scope of submission, improper composition or procedure, non-arbitrability of the dispute, and conflict with public policy.

When a Case Cannot Be Filed Against an Arbitration Award:

• If parties are not signatories of the arbitration agreement.
• If the arbitration agreement is unstamped or insufficiently stamped.
• If the application for setting aside the award is not made within the prescribed limitation period.
• If the arbitration is binding and the award has been made following due process.

Proposed Amendments for Online Dispute Resolution (ODR) in India:

• Amend various acts to recognize online arbitration and mediation.
• Update court procedures to acknowledge ODR.
• Allow ODR for various types of disputes including commercial, consumer, family, labor, and financial.
• Propose an umbrella mediation law for e-mediation.
• Amend various acts to facilitate electronic documentation and procedures.
• Update the Information Technology Act for secure document exchange in ODR.
• Introduce online notarization provisions.

Online Dispute Resolution (ODR) startups in India

1. CADRE: This startup offers a user-friendly online arbitration platform that provides cost-effective, transparent, and timely resolution for both social and commercial disputes.
2. SAMA: SAMA is an ODR platform that offers services such as online mediation, online arbitration, and online Lok Adalat. Their focus is on making dispute resolution collaborative, completely online, and accessible to all.
3. Centre for Online Dispute Resolution (CODR): CODR aims to make arbitration and mediation more accessible and affordable by leveraging technology. They offer a secure online platform specifically designed for online arbitration and mediation.
4. AGAMI: AGAMI focuses on nurturing the ODR ecosystem by accelerating ODR startups, creating demand amongst businesses, society, and government, and unlocking resources of all types. They integrate technology with trusted mechanisms of dispute resolution.
5. Presolv360: Presolv360 provides an end-to-end cloud platform for dispute initiation to resolution, emphasizing process automation, omni-channel communications, and certified compliance. Their goal is to save costs and time for individuals and businesses by resolving disputes online.
6. WeVaad: WeVaad offers a digital platform that helps individuals and businesses resolve legal disputes such as recovery of money, cheque bounce cases, divorce cases, family disputes, property disputes, etc., within 30-90 days.
7. CAMP Arbitration and Mediation Practice: CAMP is at the forefront of integrating commercial mediation into the practice of dispute resolution, offering training and bespoke consulting services.
8. Jupitice: Jupitice provides a digital justice platform that offers end-to-end alternate dispute resolution mechanisms to resolve disputes online. They offer services for e-commerce disputes, B2B disputes, B2C disputes, cross-border disputes, and more.
9. JustAct: JustAct is an ODR platform set up by lawyers and professionals to resolve disputes out of courts through negotiation, mediation, and arbitration. They use a Game Theory-based algorithm for negotiation and have ties with reputed arbitration/mediation institutes and independent professional.

Funding

1. SAMA: Received seed funding from Campus Fund, amount undisclosed.
2. CADRE: Raised seed funding from Campus Fund, amount undisclosed.
3. Presolv360: Secured $1.08 million in seed funding from MGA Ventures and Omidyar Network India. 

Revenue Model

1. SAMA:

• Licensing Fee-For-Service: Businesses and organizations pay licensing fees to use SAMA’s ODR platform for resolving disputes.
• Online Deposit of Fees and Costs: SAMA facilitates online payments for dispute resolution services, including fees and costs.
• Smart Contracts: In cases where parties agree to settlements or receive awards, SAMA ensures automatic transfer of funds from the losing party’s bank
  account using smart contracts.

2. CADRE: Fee-For-Service: Businesses and individuals pay for using CADRE’s online arbitration services.

3. Presolv360: Fee-For-Service: Users pay fees for dispute resolution services, including mediation, arbitration, and conciliation.

4. Jupitice:

• Service Marketplace Model: Jupitice provides a marketplace where users can find and hire ADR practitioners (mediators, arbitrators, etc.).
• Empanelment Fees: ADR practitioners pay fees to be listed on Jupitice’s platform.

5. WeVaad: Fee-For-Service: Individuals and businesses pay for legal advice and dispute resolution services.

Starting an Online Dispute Resolution (ODR) platform with bootstrap funding involves careful planning and strategic execution. Here are some recommendations:

1. Identify Your Niche:Understand the types of disputes you want to resolve. It could be consumer disputes, commercial disputes, family disputes, etc. This will help you tailor your services to a specific audience.
2. Build a Robust Platform:Invest in building a user-friendly and secure online platform. It should be easy to navigate and should ensure the privacy and confidentiality of the users.
3. Leverage Technology:Utilize advancements in AI, ML, and blockchain to make your platform efficient and effective. For instance, AI can be used for intelligent resolution assistance.
4. Legal Compliance:Ensure your platform complies with the legal frameworks in your country. In India, for instance, the Code of Civil Procedure, 1908, the Arbitration and Conciliation Act, 1996, and the Information Technology Act, 2000 are relevant.
5. Collaborate with Neutrals:Build a network of mediators, arbitrators, and other neutrals who can help resolve disputes on your platform.
6. Awareness and Trust Building:Conduct awareness campaigns to educate potential users about the benefits of ODR. Building trust is crucial for the success of your platform.
7. Partnerships:Consider partnering with e-commerce platforms, government departments, and other organizations that could benefit from ODR.
8. Customer Support:Provide excellent customer support to assist users in navigating the platform and resolving any issues they may encounter.
9. Continuous Improvement:Regularly update and improve your platform based on user feedback and technological advancements.