Online Dispute Resolution

ONLINE DISPUTE RESOLUTION
Project Work of Alternate Dispute Resolution

On
Online Dispute Resolution
Submitted To:Mr Hrishikesh Manu

Faculty of Alternate Dispute Resolution
Submitted By: Kumar Vikram Aditya

Roll No. 1023
3rd Year B.B.A. LL.B. (Hons)
CHANAKYA NATIONAL LAW UNIVERSITY
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ACKNOWLEDGEMENT
I am highly elated to have worked on my research topic Online Dispute Resolution under
the guidelines of Mr Hrishikesh Manu Faculty of Alternate Dispute Resolution. I am very
grateful to him for his proper guidance. I would like to take this opportunity to express my
profound gratitude and deep regard to him for his exemplary guidance, valuable feedback and
constant encouragement throughout the duration of the project.
His valuable suggestions were of immense help throughout my project work.
His perceptive criticism kept me working to make this project in a much better way. Working
under him was an extremely knowledgeable experience for me.
I would also like to thank all my friends and my seniors and apart from all these I would like
to give special regard to the librarian of my university who made a relevant effort regarding
to provide the materials to my topic and also assisting me.
Finally I would like to thank my parents and brother for their immense support and presence
during this whole project work.
Kumar Vikram Aditya
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TABLE OF CONTENTS
Acknowledgement ...................................................................................................... 2
Aims and objectives ................................................................................................... 4
Hypothesis ................................................................................................................. 4
Research methodology .............................................................................................. 4
Sources of data .......................................................................................................... 4
Online dispute resolution: meaning ............................................................................ 5
A brief history of online dispute resolution .................................................................. 8
Online dispute resolution current scenario ............................................................ 11
Odr in the context of other dispute resolution mechanisms ...................................... 13
Odr in india ............................................................................................................... 17
Disadvantages and Advantages of odr..................................................................... 19
Benefits: ................................................................................................................ 19
Drawbacks: ........................................................................................................... 19
Conclusion ............................................................................................................... 22
Bibliography ............................................................................................................. 24
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AIMS AND OBJECTIVES

The prime objective of the researcher is to:
To acquaint with meaning and history of Online Dispute Resolution.
To know Online Dispute Resolution in terms of other Alternate Dispute Resolution

Methods.
To know Advantages and Disadvantages of Online Dispute Resolution.
To know Online Dispute Resolution in context to India.
HYPOTHESIS
The hypothesis taken by the researcher is that Online Dispute Resolution is a far more
effective mechanism for resolving online disputes than traditional Alternate Dispute
Resolution Methods or litigation
RESEARCH METHODOLOGY
The various books, various articles, websites, Law journals, Acts, are referred for this topic.
The sources from which the material for this research collected are primary & secondary. The
methodology used in the research has been Doctrinal. No non-doctrinal method has been used
by the researcher in this project work.
SOURCES OF DATA
Primary Sources: -
Secondary Sources: - Books on Arbitration and Conciliation, Magazines, Websites,
Arbitration and Conciliation Act 1996.
and Journals etc.
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ONLINE DISPUTE RESOLUTION: MEANING

Online Dispute Resolution relates simply means to resolving disputes on the Internet.
It is happening in many forms and forums across Canada, the United States, Europe, India
and many other countries. Todays ODR mechanisms are said to be early harbingers of the
future global dispute resolution landscape in the Digital Age.1
The term ODR refers to an array of dispute resolution procedures. Some are fully
automated, others, although they take place exclusively online, involve a human neutral. A
large group of processes that are included in ODR use digital technologies to lesser degrees.
Thus, online dispute resolution is not a monolithic concept for this reason, some authors
argue that it is more accurate not to speak of ODR, but rather of ODR techniques 2, or even of
a plethora of online dispute resolution services3 devoted to the expeditious and speedy
resolution of disputes. The term ODR is used for mechanisms as different as dispute
prevention (education, outreach, rating and feedback programs), ombudsman programs, blind
bidding,
automated
negotiation,
early
neutral
evaluation
and
assessment,
mediation/conciliation, mediation-arbitration (binding and/or non-binding), arbitration, expert

determination, executive tribunals or virtual juries. Based largely on traditional (offline)
alternative dispute resolution4 procedures, such as mediation or arbitration, and various
hybrids thereof, ODR is sometimes equivalently labelled as e-ADR. The synergy of
alternative dispute resolution and information and communication technology via the Internet
is considered a dominant feature of ODR as canvassed in legal literature.
The field of out-of-court dispute resolution has grown and flourished alongside the
rapid advance of technology for almost thirty years. Yet, a successful relationship between
ADR and technology could not have happened without the appearance of the commercial
Internet and World Wide Web a decade ago. Since then, one of the main challenges facing
the global network is how to resolve a growing number of cross-border disputes in the
1
Many authors have suggested that the spectrum of dispute resolution mechanisms will soon encompass a full
range of virtual options made possible by the current revolution in information technology see for instance:
Thomas J. Stipanowich, Contract and Conflict Management (2001) Wis. L. Rev. 831.
2
Julia Hrnle, Online Dispute Resolution The Emperors New Clothes? Benefits and Pitfalls of Online
Dispute
Resolution
and
its
Application
to
Commercial
Arbitration,
online:
<http://www.bileta.ac.uk/02papers/Hrnle.html> [Hrnle].
3
Leon E. Trakman, From the Medieval Law Merchant to E-Merchant Law (2003) 53 U. Toronto L.J. 265 at
284.
4
The main forms of alternative dispute resolution (ADR) are arbitration, mediation and negotiation, processes
that are effective in settling disputes out of court and in a manner that is less formal than litigation in court.
Some authors exclude arbitration from ADR though, emphasizing amicable (conciliatory) nature of ADR, as
opposed to adjudicative procedures, such as litigation or arbitration.
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electronic environment. Diverse legal and non-legal obstacles such as physical, linguistic and
cultural distances between parties, juridical difficulties concerning the applicable law,
competent jurisdiction and enforcement of judgments make traditional methods of dispute
resolution ineffective in the online environment. It has been argued that these deficiencies
may significantly hamper further development of the Internet and electronic commerce.
Although not free from similar and other concerns, ODR is being depicted as the potentially
optimal method to resolve disputes arising on the Internet.
At the commonsense level, as several authors argue, if the Internet gives rise to some
disputes, it seems appropriate to employ the same medium to deal with them.5 Given that
parties physically located far from each other can easily meet and communicate in
cyberspace, they can both cause and resolve a dispute in cyberspace. In addition, ODR can be
more effective than traditional methods in terms of time, convenience and financial resources
involved in dispute resolution procedure.6 Thus, in Katsh and Rifkins view, online dispute
resolution is a response to the dispute and other activities that are appearing online, and
also a user of resources becoming available in cyberspace. Its nature, therefore, reflects
various qualities and features of the online environment7.
ODR has qualities acquired from the online environment, but it also has traits
acquired from ADR. ODR has the same potential advantages over litigation of greater
efficiency, greater party control and lower costs.8 It is fair to say that ODR grows directly out
of the history of offline ADR as observed by Rule in its earliest incarnations online
dispute resolution procedures were unchanged ADR procedures conducted online.9 The first
three pilot projects launched to develop workable dispute resolution techniques online (the
Virtual Magistrate, the Online Ombuds Office and the Maryland Mediation Project) were
based on arbitration, mediation and complaint assistance techniques.10 For that reason, in the
opinion of some authors, the ODR phenomenon relates simply to using the Internet to
Hrnle wrote that it is logical to use the same medium for the resolution of disputes arisen in online settings
Hrnle, supra note 2
6
ODR is particularly convenient and efficient where the parties are located at a distance, as distance
communication obviates the need for travelling. Part II explains the advantages of ODR in more detail.
7
Katsh and Rifkin, supra note at 19.
8
Hrnle pointed out that the introduction of high technology increases these advantages of ADR over litigation
Hrnle, supra note 2.
9
Rule, supra note at 13.
10
Schiavetta, supra note
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provide ADR, whether as an adjunct to face-to-face services or in substitution of them.11
Consequently, they define ODR as ADR that takes place using computer-mediated
communications in the online environment.12 They also indicate that most laws and
principles that apply to ADR in the brick-and-mortar regime will also apply to e-commerce
and other Internet disputes. Yet, although ODR is an offspring of ADR13, it must be
pointed out that with the development of online technology a new dimension has been added
to the dispute resolution industry.14 Some ODR procedures, like automated negotiation15 or
facilitated negotiation16, do not have exact offline equivalents. At this point, the conclusion
reached by Hrnle seems accurate: In one sense, ODR is simply about the use of new tools
information management tools and communication tools for dispute resolution. But it is
equally true that these tools change the methods by which disputes are being solved. ODR
introduces a new paradigm of dispute resolution.17
The growing consensus believes that online dispute resolution can be useful for two
types of disputes: those that arise from online interactions and those that arise offline.18
Initially, the focus of ODR stakeholders was largely on consumer disputes resulting from ecommerce transactions. This continues to be an important area for ODR, but it has been
joined by a growing number of disputing contexts. The chart below illustrates the wide range
of fields in which different services have been offered by ODR providers.
11
Anne-Marie G. Hammond, The Effectiveness of Online Dispute Resolution, thesis completed for Royal
Roads University MA (Conflict Analysis and Management), available from author hammond00@earthlink.net
or in the National Library of Canada.
12
United Nations Conference on Trade and Development, E-Commerce And Development Report 2003
(Internet edition prepared by the UNCTAD secretariat): Chapter 7: Online dispute resolution: E-commerce and
beyond, online: <http://www.unctad.org> [UNCTAD].
13
Hrnle, supra note 2.
14
Schiavetta, supra note.
15
With automated negotiation the disputants use a software programme to settle their monetary dispute. Firstly
they enter settlement figures and once the amounts come within certain proximity of each other, say twenty per
cent, the claim is settled midpoint.
16
The disputants are provided with a web platform and ICT tools for the purpose of facilitating a resolution.
17
Hrnle, supra note 2. The relation between two fields, which ODR has grown out of, i.e. online (ICT)
technology and alternative dispute resolution movement, is far more complex than it could appear prima facie.
ADR and ICT technology certainly share some common themes: they involve processes of information
exchange and communication, and they both are attributed with resistance to government. See: Thomas Schultz,
An Essay on the Role of Government for ODR, (2003) August ADROnline Monthly.
18
Joseph W. Goodman, The Pros and Cons of Online Dispute Resolution: An Assessment of CyberMediation (2003) Duke L. & Tech. Rev. 4 [Goodman].
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A BRIEF HISTORY OF ONLINE DISPUTE RESOLUTION

Many authors break up the development of ODR into three different stages: the first
lasted until about 1995 (the elementary stage), the second dated from 1995 to 1998 or 1999
(the experimental stage), and the third to the present (entrepreneurial stage).19
Before 1995, only a few specialized dispute resolution procedures were applied
informally in specific online contexts.20 Until 1992, the Internet was largely a US-centred
network, and commercial activity was banned from it under that countrys National Science
Foundations acceptable use policy.21 The network was used mainly by academics for
sending email and participating in listservs and, in the case of those with some technical
expertise, for exchanging files. As the network grew, flaming22 and other violations of
netiquette23 emerged. Other early online disputes involved individuals participating in roleplaying games.24 Some online mechanisms were used to deal with these conflicts, but there
were no organized dispute resolution institutions devoted specifically to ODR. Even the term
ODR had not yet been invented. When the ban on commercial activity on the Internet was
repealed, disputes related to commerce began to surface.25 For example, the first commercial
spam case occurred in April 1994.26
The second stage coincided with the growth of the Internet, particularly as a medium
for commerce.27 The idea for ODR emerged out of a recognition that disputes would multiply
as the range of online activities grew. Thus, the origins of ODR are traceable to a simple
insight: the more online transactions there are, the more online disputes there will be.28 As
companies began exploring the Internets commercial opportunities, interest grew in domain
names, and many disputes arose between trademark owners and domain name holders. With
19
Rule, supra note at 21, Katsh & Rifkin, supra note, UNCTAD, supra note 12.
For example, blocking or unsubscribing flamers on mailing lists Rule supra note at 21.
21
Jay P. Kesan and Rajiv C. Shah, Fool us once shame on you fool us twice shame on us: What we can learn
from the privatizations of the Internet backbone network and the domain name system (2001) Washington
University Law Quarterly 79, online: <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=260834>.
22
The term flaming refers to the process of sending repeated nasty messages to individuals or about
individuals on the Internet see: Joshi Pradyna, Flamers Make for Unease on Net, Milwaukee J. Sentinel,
Apr. 15, 1996, at 9.
23
Netiquette means common courtesy online and the informal rules of the road of cyberspace see:
Netiquette Home Page, online: <http://www.albion.com/netiquette/>.
24
UNCTAD, supra note 12.
25
ibid.
26
R. Everett-Church, The spam that started it all, Wired News, April 13, 1999, online:
<www.wired.com/news/politics/0,1283,19098,00.html>.
27
28
20
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the growth of the network, new types of disputes emerged, for example concerning the
legality of linking between websites, or other intellectual property issues related to the use
and copying of information. In fact, the more the Internet was used for any purpose, the more
disputes arose.29 During this period, recognition grew that the Internet needed some focused
online institutions to address problems that were arising with increasing frequency. The
pioneering experiments in ODR during this phase were largely sponsored by academics and
non-profit institutions. Various projects were designed to allow those involved in a dispute to
obtain expertise from a distance. For example, in the first case mediated by the Online
Ombuds Office, an online mediation project at the University of Massachusetts, an online
mediator helped an individual website owner resolve a problem with a local newspaper
claiming copyright infringement.30
The third stage is the most recent phase, during which commercial entities began to
show interest in online dispute resolution. This stage has involved the commercialisation of
ODR systems. This has coincided with a new interest on the part of governmental and
international institutions in ODR.31 During this period, to large extent, ODR has become
accepted as a needed process in the online environment, and it has been demonstrated that it
can be employed with diverse kinds of disputes originating both on- and offline. Despite high
costs of building and implementing ODR systems, the number of firms offering some form of
ODR has continued to grow. Consequently, the authors of the 2003 UNCTAD E-Commerce
and Development Report conclude, there has been growing recognition by both governmental
and commercial interests that online resources can be a solution for many problems that
originate in the online environment. Thus, the main achievement of the current phase of
ODRs development seems to be that it is now accepted that it is appropriate indeed,
desirable that ODR be the process of first choice for disputes generated in online
activities32.
Certainly, the main conclusion that could be drawn from this brief historical analysis
is that ODR is intimately tied to the expansion and development of the Internet. The role of
ODR in cyberspace will be greatest where there is a high degree of interactivity between a
29
ibid.
See Center for Information Technology and Dispute Resolution, Online Ombuds Narrative I: The Web Site
Developer and the Newspaper, online: <www.ombuds.org/narrative1.html>.
31
32
30
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wide variety of users.33 In Colin Rules words, the growth of the net fuels the growth in
ODR, and the slowdown in the net, temporarily, slows the growth of ODR. Yet, in a long run,
like the Internet, the expansion and refinement of ODR is inevitable, and it goes beyond the
flavour-of-the-month attention spans of the media and the stock market.34
33
E. Casey Lide, ADR and Cyberspace: The Role of Alternative Dispute Resolution in Online Commerce,
Intellectual Property and Defamation (1996) 12 Ohio St. J. on Disp. Resol. 193 at 193.
34
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ONLINE DISPUTE RESOLUTION CURRENT SCENARIO

Despite the fact that first online dispute resolution projects were set up a decade ago,
ODR is still in its infancy. No theory as a systematically organized set of principles offered
to explain a particular phenomenon35 has been created for ODR so far. Few authors have
written on the theory of online dispute resolution: in the cutting edge book by Katsh and
Rifkin, the section entitled The Theory of ODR does not even fill two pages.36
This lack of theoretical reflection on online dispute resolution results mainly from the
fact that ODR is still a novelty which has not managed to attract popular attention yet. As of
June 1, 2005, altogether only 138 articles in the LexisNexis database contained the term
online dispute resolution, and many of them only did so in a single sentence or a footnote
reference. Another important reason is that ODR represents the gamut of dispute resolution
possibilities which are difficult to measure and classify by any coherent set of criteria and
principles. As noted by Rule, ODR may both involve automated negotiation processes
administered by a computer, or it can provide world-class experts to administer arbitration
procedures remotely, for example. ODR systems can be legalistic and precedent-based, like
the courts, or flexible exception-handling mechanisms to act as an extension to customer
service efforts. ODR can be a multimillion dollar customer relationship management system
or a $ 75 website set up to aid a mediator with administration of a small case. Any use of
technology to complement, support, or administer a dispute resolution process falls into the
world of ODR.37
This richness of the online dispute resolution phenomenon, inherited from ADR albeit
growing, implies that ODR could be classified into different traditional groups of dispute
resolution procedures. While some ODR mechanisms are procedures of agreement (for
example online mediation), others belong to procedures of advice (e.g. tools supporting
negotiation) or procedures of decision (e.g. online arbitration).38 Sometimes the ODR
neutral plays a facilitative, non-judgemental role, and other times they have absolute
decision-making authority.39 ODR can take place both on an ad hoc basis, as well on the
basis of advanced agreement, dispute resolution program and arguably, also in the future
35
See: Merriam-Webster Dictionary, online: <http://webster.com>.

Katsh and Rifkin, supra note at 10-11.
37
38
On the classification of the procedures of agreement, advice and decision, see: Genevieve A. Chornenki, The
Corporate Counsel Guide to Dispute Resolution (Canada Law Book Inc., Aurora, 1999) at 7-10 [Chornenki].
39
36
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legislation or government mandate.40 While some ODR processes enable integrative
(cooperative) problem solving in which parties can work together to generate new value for
both sides (expand the pie)41, others such as automated blind bidding are designed for
merely splitting a difference.42 Finally, in cyberspace, like in real space, when seeking to
resolve a conflict, parties can rely both on their interests as well as rights or power. As
observed by Bordone, encouraging people to approach dispute resolution from an interestbased rather than a rights- or power- based perspective is not always easy, either offline or
online.43
The ODR phenomenon encompasses a collection of diverse procedures intended to
prevent, manage or resolve disputes in the online environment. Fitting them into a coherent
theoretical framework suitable for dispute resolution is certainly a difficult task.
Nevertheless, given that dispute resolution is commonly viewed as a series of informational
exchanges44, or more specifically as a complex process of information management,
information processing, and communication45 according to several authors information
and communications technology lends itself well to this task.46 What makes ODR particularly
intriguing and new is that some of these informational exchanges occur between human and
machine, rather than directly between human and human.47 Bit by bit, the newest methods of
resolving disputes, embodied in the ODR phenomenon, can change the landscape of dispute
resolution, along with its theoretical underpinnings. Theoretical reflection on online dispute
resolution is still in its infancy. This paper focuses rather on practical, i.e., regulatory aspects
of the ODR phenomenon.
40
Chornenki, supra note 38 at 11.

Rule, supra note at 37
42
Yet, it seems that in the realm of the Internet even the latter can bring about a mutually satisfying and winwin solution, if applied in appropriate circumstances and upon parties consent.
43
Robert Bordone, Electronic Online Dispute Resolution: A Systems Approach Potential, Problems, and a
Proposal (1998) 3 Harv. Negotiation L. Rev. 175 at 187-189 [Bordone]. See also Rule, supra note at 37,
suggesting that both in offline and online settings, disputes are frequently framed as zero-sum, me-versus-you
affairs where any gain enjoyed by one party comes at the expense of the other party.
44
Ethan Katsh, Online Dispute Resolution: Some Lessons from the E-Commerce Revolution (2001) 28 N.
Ky. L. Rev. 810 at 817 [Katsh, Online Dispute Resolution].
45
Julia Hrnle, Online Dispute Resolution in John Tackaberry and Arthur Marriott, Bernsteins Handbook of
Arbitration and Dispute Resolution Practice, Volume 1 (Sweet & Maxwell, London: 2003) at 783 [Hrnle,
Online Dispute Resolution].
46
ibid. at 783.
47
As observed by Katsh, what makes the design of online processes difficult is that the range of requests
permitted to the human by the system must be flexible and broad enough to satisfy the needs of the human. At
the same time, however, any possible request must be anticipated so that a suitable and appropriate array of
responses is programmed into the machine Katsh, Online Dispute Resolution, supra note 44 at 817.
41
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ODR IN THE CONTEXT OF OTHER DISPUTE RESOLUTION

MECHANISMS
The role of technology in mediating communication between parties is seen as the
main difference between ODR and other methods of dispute resolution.48 Yet ODR applies
technology to achieve the very same goal: helping people to resolve their disputes.
The role of ODR in the context of other dispute resolution mechanisms has been often
viewed through the prism of achievements of the ADR movement. As noted by Katsh &
Rifkin, over the last quarter century, ADR has proven that moving justice away from the
courthouse is often desirable and that the arena of dispute resolution, once thought to be the
exclusive domain of law and courts, is markedly different from what it was several decades
ago.49 While ADR has moved dispute resolution away from litigation and the courts, online
dispute resolution extends this trend even further. If ADR represents a move from a fixed and
formal process to a more flexible one, ODR by designating cyberspace as a location for
dispute resolution moves ADR from a physical to a virtual place50, and makes dispute
resolution even more flexible and convenient. The Internet has brought ADR directly to
each individuals personal computer.51 ODR can combine the effectiveness of ADR with
the comfort of the Internet.52
ADR was the original model for ODR, and many goals and techniques of ADR will
certainly remain goals and techniques of ODR.53 As noted by Rule, ODR started out as the
administration of ADR processes online: it was seen as a way to replicate face-to-face
interaction when such interaction was not possible. If the face-to-face mediation process
involved three stages (such as unassisted storytelling, assisted storytelling, and joint problem
solving), then that was exactly what early online neutrals attempted to do. The tasks of the
online mediator were the tasks of the offline mediator: reframing the discussion, keeping the
parties on track, and reality-testing proposed solutions.54 Online mediation still strongly
resembles offline mediation, and it does not seem likely to change in the not-so-distant
48
Rule, supra note at 45

50
Arno R. Lodder and John Zeleznikow, Developing an Online Dispute Resolution Environment: Dialogue
Tools and Negotiation Support Systems in a Three-Step Model (2005) 10 Harv. Negotiation L. Rev. 287 at 297
[Lodder and Zeleznikow].
51
Martin C. Karamon, ADR on the Internet (1996) 11 Ohio St. J. on Disp. Resol. 537 at 548.
52
Lodder and Zeleznikow, supra note 50 at 337.
53
Ethan Katsh, Bringing Online Dispute Resolution to Virtual Worlds: Creating Processes through Code
(2004/2005) 49 N.Y.L. Sch. L. Rev. 271 at 285 [Katsh, Bringing].
54
Rule, supra note at 44 (noting that arbitration were even simpler).
49
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future. Online processes can even get closer to replicating true dispute resolution
procedures as technology is perfected.55 Today, since high-quality videoconferencing systems
are not yet easily affordable, communications in online mediation are mainly textual and
asynchronous. The principal means of communication are thus email and web-based
communications, i.e. chat rooms and bulletin boards.56 In the future, videoconferencing, and
certainly also new means of communication, will be utilized to more accurately replicate
face-to-face interaction in the online environment. Regardless of the quality and accessibility
of videoconferencing however, of course ODR will never completely replace the face-to-face
encounter. ODR should not be seen as a competitor or substitute for offline alternative
dispute resolution57, but rather a natural response to the emergence of new sphere of human
activity and, consequently, new types of conflicts.
The necessity for new methods of dispute resolution arises from the fundamental
nature of the Internet itself. First, the global character of the Internet undermines the notion of
territoriality, one of the foundations of traditional locus-based systems of dispute resolution.
Because the Internet does not correspond to the jurisdiction of any sole existing sovereign
entity, territorially defined laws and rules are difficult to apply to the Internet and activities of
Internet users.58 Traditional, state-run and territorial courts are too slow, too expensive, and
too inaccessible to address all problems that arise on the Internet.59 The Internet collapses
not only physical space, but also time, in many ways. Information travels rapidly on the Web:
cyberspace allows people in all corners of the world to send and receive information 24/7.
This feature has significant implications for the world of dispute resolution. As noted by
Rule, one way that online interaction completely changed the dispute resolution process was
in the way it changed the participants notion of time.60 They can contact one another much
faster and more often than ever before. In addition, they can do it in a number of ways. New
synchronous (such as instant messaging or VoIP) and asynchronous (for example threaded
55
ibid.
Thomas Schultz, Does Online Dispute Resolution Need Governmental Intervention? The Case for
Architectures of Control and Trust (2004) 6 N.C. J.L. & Tech. 71 at 74 [Schulz, Does Online].
57
See, for example, Joel B. Eisen, Are We Ready for Mediation in Cyberspace? (1998) BYU L. Rev. 1305 at
1308 [Eisen] (who noted that electronic communication is no substitute for the ability of face-to-face
conversations to foster important process values of mediation.)
58
Alejandro E. Almaguer and Roland W. Baggott, III., Shaping New Legal Frontiers: Dispute Resolution for
the Internet (1998) 13 Ohio State Journal on Dispute Resolution 711 at 712 [Almaguer and Baggott].
59
David R. Johnson and David Post, Law and Borders The Rise of Law in Cyberspace (1996) 48 Stan. L.
Rev. 1367 at 1372-1373.
60
56
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discussion) ways of communication became available, and are already widely employed in
online dispute resolution61.
As observed by Bordone, online technology brought about the vast potential for
increasing communication and understanding, and at the same time, also an increased
potential for misunderstanding. From ones computer terminal, it is difficult to understand
the implications of cyberspaces annihilation of distance and space on communication in
relationships. [] In the non-virtual world, persons communicate using much more than
mere words. Tone, affect, space, and time all add to the richness of an interpersonal
communication and help us to calibrate our responses appropriately to that of our
counterpart.62 While it is easier to communicate a difficult or unpleasant message via email,
or other asynchronous means, than in person or on the telephone (the distance of time and
location makes such communications more comfortable for the messenger), the impact on the
receiver is not likely to be any better. On the contrary, the ultimate effect of using a
computer-mediated communication to comfortably deliver uncomfortable messages can
actually lead to more rather than less conflict between the involved parties.63
Although online dispute resolution borrows so much from ADR, its place is in a very
different environment. In cyberspace, communication transcends time, space, and physical
reality.64 These unique characteristics inevitably influence the nature and type of disputes
arising on the Internet, and thereby the type of dispute resolution process best suited for the
forum.65 As the Internet grows, new forms and techniques of ODR are being developed, such
as software that helps parties to brainstorm, identify their interests and priorities, or organize
and focus their conversation. As a result, ODR becomes increasingly independent from the
world of offline ADR. There is no doubt that ODR has already moved out of the stage where
it was a mere, and inherently pale, imitation of face-to-face interaction when such interaction
was not possible.66 Online technology presents us with opportunities to develop new tools for
dispute resolution that might be employed in both online and offline environments. 67 While
61
ibid. According to Rule, most people do not interact at the same time over the Internet. Many communication
technologies used online were actually designed as asynchronous to allow people to log on as they like
throughout the day.
62
Bordone, supra note 43 at 180-181.
63
ibid. at 180-181.
64
ibid. at 179.
65
ibid.
66
Katsh, Bringing, supra note 53 at 284.
67
ibid. at 290-291.
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ODR still borrows much from ADR, it seems that in the future ADR will also borrow from
ODR.68
68
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ODR IN INDIA
With the aforesaid legislations in place, the ground is now set for ODR to take a
footing because we have both an ADR-friendly civil procedure and the technology and the
statutory recognition for the use thereof. What we now require is first, that more and more
courts make earnest attempts at making the optimum use of the provisions of Section 89 of
the Code, and second, that there be more and more trained dispute resolution service
providers (DRSPs), individuals as well as institutions, who can effectively deal with the
disputes referred to them by the courts for resolution. Whenever a foray is made into any new
territory, uncharted routes need to be taken. So is the case with ODR, as the implementation
of technology as the fourth party69 in dispute resolution is a novel scenario for India. It is
hence inevitable that in the course of implementing ODR systems, questions will be raised
regarding various aspects thereof and the argument against it is likely to be on the lines of
there is no precedent to that. Undoubtedly, as with everything else in life, issues will arise
from time to time on several aspects of ODR. However, the basic issue of legal sanction for
the use of electronic media has already been settled by the 2000 Act. The Supreme Court too
has shown its approval of the use of technology in dispute resolution. In a recent case70 it held
that video-conferencing could be resorted to for the purpose of taking evidence of a witness.
In that case, one party was seeking direction of the court to take evidence of a witness
residing in the United States of America. Though a lower court had ordered such evidence to
be taken with the help of video-conferencing, the concerned High Court struck down that
order on the grounds that the law required the evidence to be taken in the presence of the
accused. The Appeal Bench of the High Court upheld the said latter order. The Supreme
Court struck down the High Court order by stating that recording of evidence satisfies the
object of Section 273 of the Code of Civil Procedure that evidence be recorded in the
presence of the accused. In explaining the benefits of video-conferencing, the Court observed
that In fact the Accused may be able to see the witness better than he may have been able to
if he was sitting in the dock in a crowded Court room. They can observe his or her
demeanour. In fact the facility to play back would enable better observation of demeanour.
They can hear and rehear the deposition of the witness. Addressing the various submissions
made before it, the Court stated that Virtual reality is a state where one is made to feel, hear
or imagine what does not really exist. Video-conferencing has nothing to do with virtual
69
70
See Ethan Katsh and Janet Rifkin, Online Dispute Resolution: Resolving Conflicts in Cyberspace (2001).
State of Maharashtra v. Dr. Praful B. Desai (2003) 4 SCC 601
Page 17

reality. 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. This is not virtual reality, it is actual reality. Several
interesting observations are made in the said Order which clearly indicate the strong support
for use of technology, and especially video-conferencing, in the justice delivery system. This
is not the first time that the Supreme Court has ruled in favour of technology. In an earlier
decision71 it held that When an effective consultation can be achieved by resort to electronic
media and remote conferencing it is not necessary that the two persons required to act in
consultation with each other must necessarily sit together at one place unless it is the
requirement of law or of the ruling contract between the parties. In this case the contention
was that the two arbitrators appointed by the parties should have met in person to appoint the
third arbitrator. In yet another decision72 in which use of available technology has been given
a real boost, the Supreme Court held that Technological advancement like fascimile,
Internet, e-mail, etc. were in swift progress even before the Bill for the Amendment Act was
discussed by Parliament. So when Parliament contemplated notice in writing to be given we
cannot overlook the fact that Parliament was aware of modern devices and equipment already
in vogue.
71
72
Grid Corpn. Of Orissa Ltd. V. AES Corpn. 2002 A.I.R. (S.C.) 3435
Sil Import, USA v. Exim Aides Exporters, Bangalore (1999) 4 SCC 567
Page 18
DISADVANTAGES AND ADVANTAGES OF ODR

BENEFITS: The principal advantages of ODR are as follows:
Economically viable: Cost is one of the most crucial factors in dispute resolution, as
disputants like to reach an optimal decision at the lowest possible price. ODR best suits
the financial demands of all parties to a dispute, as most of the document are exchanged
via email and the proceedings take place online as opposed to exchange of documents by
post. The costs related to travel and accommodation, venue for conducting the
proceedings is also eliminated. Therefore, carrying out ODR is not only easier and faster,
but it is also significantly cheaper.
Speedy resolution: ODR is a speedy process. Where, in ADR it may take several months
to resolve a dispute, ODR promises settlement of disputes within a few weeks. Further,
the borderless nature of the internet diminishes the communication problems faced by
parties and their counsels who may be located in different time zones. Moreover, the
internet enables parties to easily obtain data and other information about their cases in
real time. In addition to easy accessibility, e-mail simplifies the task of scheduling ODR
proceedings and avoids any phone or fax-tags in the process. The internet is also a
superior and swifter form of communication, as it facilitates the sending and storing of
documents of multiple parties simultaneously, thus saving both time and money.
Non-confrontational mechanism: By removing the physical presence of the adversary,

ODR enables the adjudicating body to dispassionately resolve the dispute, purely on basis
of the merits of the case. Further, since most of the arguments or dialogues take place
asynchronously over the internet, it allows the disputants to reflect on their positions
before articulating their response. Additionally, such a mechanism neutralizes any
economic or other power disparities that may obtain between the disputants, as there may
be several instances where one party to the dispute is a small-time manufacturer/supplier
and the opposite party is global entity.
Neutral forum: The internet offers a neutral forum for adjudication and the home
advantage one of the parties hitherto enjoyed. Facilitates record keeping: ODR facilitates
the process of maintaining the record of the correspondences, pleadings, statements, and
other written, oral or visual communications, by relying solely on digital records. This inturn saves time and money of the parties.
DRAWBACKS: The following drawbacks prevail in the ODR process which hampers its
growth as an efficient mechanism for resolving disputes:
Page 19
Lack of human interaction and miscommunication: The lack of face-to-face interaction

deprives the adjudicating authority of the opportunity to evaluate the credibility of parties
and the witnesses. Moreover, the impersonal nature of the internet can potentially cause
miscommunication between the parties, which is likely to occur when parties are located
in different countries and speak different languages.
Limited range of disputes: Like ADR, ODR is also best suited to resolve only certain
types of disputes, like, e-commerce and domain name disputes. The ODR mechanism
may not be suitable for resolving every kind of online dispute, for example, negotiation
and mediation may be more suitable in resolving issues such as the damages that may be
payable for breach of contract. Further, tortious disputes, such as defamation and trespass,
may require discovery, interrogatories, recording the testimony of a witnesses and the
crossexamination, which may not be convenient to process over the internet.
Inadequate confidentiality and secrecy of proceedings: The secrecy of proceedings is

fundamental to the process of dispute resolution, which ODRs inherits from ADRs.
Accordingly, ODR providers have made technological arrangements, such as, installation
of various softwares, firewalls, etc., to protect the data sent by the parties from data
interception, alteration, etc. Though substantial efforts have been made towards creation
and implementation of data protection laws, these measures do not ensure 100%
protection from hackers and other cyber offenders and require constant updating, despite
which there may still exist loop-holes which can be exploited. Thus, inadequate internet
security may act as a major deterrent in the growth of ODR.
Inadequate authenticity: Closely related to the issue of security is the issue of authentic
identification of the user. In an ADR process, one party can be certain that the other party
it is dealing with is the party actually involved in the dispute. However, in cyberspace, it
is not easy to verify the authenticity of messages received and it is relatively easy for a
third party to impersonate or misrepresent one of the parties in the dispute, causing
confusion, thereby defeating the very purpose of adopting ODR.
Jurisdiction: Internet being a borderless medium transcends and challenges traditional

concepts of jurisdiction. This leads to problem in deciding the applicable substantive law
which is to be applied to the dispute. This issue can only be resolved by parties clearly
identifying the applicable substantive and procedural laws in the clause whereby they
agree to submit the dispute to resolution by ODR. Ultimately, the resolution of this issue
would be contingent upon the pronouncement of the court systems in different
Page 20

jurisdiction which would examine and interpret such ODR clauses, but this process is
inescapable and inevitable and cannot be circumvented.
Hindrances at pre-trial stage: A significant component of the pre-trial stage is discovery,

interrogatories and collation of evidence in support the respective contentions of the
parties. This discovery or fact-finding process may be minimized in the ODR process to
speed the process of settlement of dispute. However, in a situation where the facts are
disputed, a limited discovery procedure may serve to limit the fact finding capacity of the
adjudicating authority to discover the true and correct state of facts. Further, limiting or
eliminating the discovery process may offend the due process, causing the courts to strike
them down as they do not meet the minimum requirements of due process.
Publication of proceedings and award: If ODR is to be encouraged as a popular mode of

dispute resolution, details of proceedings and decisions would be required to be published
which ensures transparency. But, this contradicts the very essence of ODR, which is
respecting the confidentiality and right to privacy of the parties. Thus, the fate of ODR
hangs in balance with one school of thought demanding absolute secrecy of proceedings
and the other school seeking publication of proceedings and the decisions. As a matter of
practice, currently, all ODR providers keep the proceedings confidential and release
information only if both the parties agree to publish the decision.
Difficulty in enforcement of online awards: Like ADRs, in the case of online arbitrations,
once the decision has been rendered, the same has to be enforced in the appropriate court.
In several jurisdictions, including India, the orders in execution are subject to appeals and
this serves to protract the process of execution. Going by this principle, unless the parties
are assured of the enforcement and implementation of the decisions, disputants may not
have much faith in online proceedings. Further, enforceability of foreign decisions
pronounced after completion of ODR proceedings is also an issue which must be
considered while agreeing to an ODR clause.
Challenging an award: Since ODR proceedings are conducted online, another issue
requiring clarity is the intervention of a court during or after the completion of the
proceedings and/or pronouncement of the decision. This will again raise the question of:
(a) the enforcement of the decision of the court in the country where the opposite party
operates/resides; and (b) appeals against the decision of the court and enforcement of the
said decision.
Page 21
CONCLUSION
Online dispute resolution has its sceptics and its enthusiasts. The sceptics say given
that ODR has not revolutionized dispute resolution yet, it is nothing more than a passing fad.
The enthusiasts see an opportunity to develop new resources to resolve conflicts more
effectively than today and argue that the Internet and ODR are still in a process of institution
building even if it takes longer than originally assumed time will come to develop a
global ODR system.
This project contends that the lack of a spectacular success of online dispute
resolution projects stems from significant flaws of their current regulatory framework. There
is no comprehensive legal regime governing dispute resolution on the Internet, and as a result
online dispute resolution suffers from the lack of legal certainty and public confidence. The
absence of ODR law is exacerbated by the weaknesses of the other modalities of regulation:
market, norms and technology. Arguably, a solid legal framework is needed to allow for the
proper growth of online dispute resolution with its norms, market and technology.
Over the past decade, Internet law in India and many other countries has evolved
significantly with the introduction of new privacy, e-commerce, and copyright legislation.
One constant, however, has been governmental support for a hands-off, self-regulatory policy
approach for online dispute resolution. Given the unsatisfactory effects of this approach, it is
time to re-examine it. While it remains to be seen which trend in ODR regulation will prevail,
it must be kept in mind that the development of the Internet has changed the dynamics of the
regulatory environment. The reasonable policy-making must rely on careful consideration of
all the modalities of regulation. The best, and in fact the only presently effective solution, is
co-regulation, a combination of both private and national and international mechanisms,
working in a coordinated effort to provide the optimal regulatory framework of online dispute
resolution.
Suggestions: In the absence of an enforceable international regulatory regime, the
following suggestions are proffered to establish ODRs as an effective mechanism of dispute
resolution: Creation of national and international body: By an international treaty of the
community of nations, an international ODR body needs to be created which would establish
its own substantive and procedural law. Every member country should have a national body
conducting
ODRs,
providing
the
infrastructural
facilities
and
the
panel
of
arbitrators/mediators, based upon the guidelines set out in the treaty to which the country is
a signatory/member. This international body should be independent and should be vested
Page 22

with appellate powers. Hence, in case the disputants wish to challenge the decision, they can
only have recourse to this appellate forum and not to the national civil court system. Further,
the decisions should be final and binding upon the parties and the said international body
should also have the power to enforce the award. Due process and fair play: To be a
successful means of resolving disputes, ODR must satisfy all requirements of due process
and fair play, such as the appointment of an unbiased decision maker to settle disputes by
allowing parties to choose from a panel of arbitrators or mediators, which may be made
available on the website of the ODR provider; providing background information of
arbitrators or mediators to facilitate the process of selection; and pronouncing a reasoned
decision. Security technology: ODR providers should be certain that they adopt security
mechanisms to ensure the safety of the parties information, such as, allow only authorized
access to their websites and adopt the latest security technology available and update it
regularly. ODR providers should also mandate that parties use digital signatures in their
online communications. The purpose of such digital signatures is two-fold: (a) it encrypts the
online message or document, thereby providing security to the transmission; and (b) it allows
the receiver to verify the authenticity of the message.
Further, the rapid growth of ODR providers in the last few years is evidence that
ODR is a far more effective mechanism for resolving online disputes than traditional ADR
or litigation. A concerted effort by the governments, consumer groups, and the online
industry could go a long way in facilitating the establishment of speedy and economical
resolution of disputes employing the ODR mechanism.
Page 23
BIBLIOGRAPHY
STATUTE:
The Arbitration and Conciliation Act 1996.
BOOKS:
An Introduction to Alternate Dispute Resolution System (ADR), Anupam Kurlwal,

2nd Edition, 2014, Central Law Agency.
Alternate Dispute Resolution, M. Sridhar, 1st Edition, 2006, Lexis Nexis
Law of Arbitration and Conciliation, Justice R.S. Bachawats , 5th Edition (Reprint),
2015, Lexis Nexis.
Alternate Dispute Resolution, P.C.Rao and William Sheffield, 2009, Universal Law
Publishing Co.
WEBSITES:
Electronic Consumer Dispute Resolution, online: <http://www.ecodir.org>.
Dispute
Resolution
Services,
online:
<http://www.drs
adr.com/novaforum_revised.php>.
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ONLINE DISPUTE RESOLUTION

Project Work of Alternate Dispute Resolution

Submitted To:Mr Hrishikesh Manu

Submitted By: Kumar Vikram Aditya

CHANAKYA NATIONAL LAW UNIVERSITY