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The Future of Online Dispute Resolution in India: Opportunities and Challenges

Persuade your neighbours to compromise whenever you can. Point out to them how the nominal winner is often a real loser — in fees, expenses, and waste of time.- Abraham Lincoln (16th President of the USA)

Conflict is an inevitable part of any human communication or transaction, be it private or personal. We see that people quarrel and fight over petty issues, especially in India, where we witness it on a daily basis. Some are resolved, while some are escalated to an extent that the state machinery is obliged to interfere. Only a few matters are settled outside the court, but the many have to see its compounds.

17,62,837 is the total number of cases that were instituted in all the high courts across India in the year 2015 and 1,89,39,721 fresh cases were instituted in the same year in district and sessions court around the country[1]. As of December 2020, the number of cases pending in the High Courts was around 4.7 Million and 35.2 Million in the district courts around the country[2]. Justice delayed is justice denied, with the amount of case backlog India has, getting timely justice seems like a distant dream. As of August 2019, there were over 3.5 Crore cases pending across the Supreme Court, the High Courts, and the subordinate courts. Of these, subordinate courts account for over 87.3% pendency of cases, followed by 12.5% pendency before the 24 High Courts.[3]

At this point of time, even if we make the judiciary work at their maximum efficiency, the backlog of cases could be handled; but what about the new cases that are being filed in the court every day? The answer to this problem is ADR, Alternate Dispute Resolution, or in a layman’s language ‘out of court settlements’. ADR is not a novel creation, but has been part of the Indian society and culture since time immemorial. Even today in rural India, there is a system of panchayats, which is a form of ADR mechanism. Great Indian philosophers and political thinkers such as Yajnavalkya and Narada have mentioned about Puga, Sreni and Kula tribunals for resolving disputes in ancient India.

The Puga or a board of persons who belonged to different sects and tribes but lived in the same locality; the Sreni or assemblies of tradesmen and artisans belonging to different tribes were connected in some way with each other, the Kula or groups of persons bound by family ties.[4] The Kula was a tribunal where issues and disputes relating to one’s family, caste, community or tribes were settled.

The Sreni could be called as a predecessor to what we call as commercial arbitration, as it was a group consisting of people expert in trade and acted as a tribunal to resolve all trade related disputes. The Puga was a tribunal at a higher pedestal, with the power to review decisions taken by the Kula and the Sreni. The decisions of the Puga could be further challenged before Pradvivaca and the final appeal was permissible before the king.[5] Despite its long history, the arbitration regime in post independent India was considered to be archaic, unpredictable and expensive.[6]

ADR is a process of resolving issues or disputes between two parties, without going through the hassles of litigation. ADR is an attempt to devise a machinery which should be capable of providing an alternative to the conventional methods of resolving disputes.[7] The National Alternative Dispute Resolution Advisory Council (“NADRAC”) of Australia has very aptly defined ADR as “an umbrella term for processes, other than judicial determination, in which an impartial person assists those in a dispute to resolve the issues between them.”[8] Processes under ADR include mechanisms such as, Arbitration, Negotiation, Mediation, Conciliation, Lok Adalats, Panchayats and hybrids of these processes.

Interestingly, ADR has been increasingly referred to as ‘appropriate dispute resolution’, in recognition of the fact that such approaches are often not just an alternative to litigation, but might be the most optimum way to resolve a dispute.[9] But unfortunately, not just in India, but in developed countries such as America, most lawyers still view ADR as an alternative rather than the primary or preferred method of settling disputes[10]. CJI Bobde in an international conference hosted by the Indian Council for Arbitration and Federation of Indian Chambers of Commerce and Industry on 8th February, 2020 pointed out various reasons as to why ADR is not popular in India. According to the CJI, the Problem lies in the word ‘Alternative’ which is taken literally, resulting in litigation to be seen as a default method.

In India, there are over 30 different arbitral institutions, some domestic and some international having their own set of rules, procedures and guidelines; yet there are hardly any cases that go for arbitration or mediation or any other ADR method. The International Centre for Alternative Dispute Resolution (ICADR) that works under the aegis of the Supreme Court of India in New Delhi had a total of 53 cases till the year 2016, 49 of arbitration and 4 of conciliation.[11] Whereas on the other hand, the Singapore International Arbitration Centre (SIAC) in the very same year, i.e. 2016 dealt with 343 new cases.[12] The question is not of efficiency, but of acceptability and adaptability.

In the year 2017, a high level committee under the chairmanship of Justice B.N. Shrikrishna to review the institutionalisation of Arbitration in India came out with a report, which lead to the amendments of 2019 in the Arbitration and Conciliation Act. The committee pointed out some crucial problems when it comes to Institutional arbitration. The report said that India lacks of credible arbitral institutions, that there are misconceptions with masses regarding institutional arbitration, the government is not supportive to these institutions, as there is an indifferent judicial attitude towards arbitration and there is need for a specialist arbitration bar.

2020 was indeed a unique year, a year where humanity learned that it was its own enemy all time. We ourselves created the monsters which we are unable to cage now. During lockdown, even the Judiciary had to suspend its work for some time, and hasn’t yet resumed working at it full capacity. Pre-lockdown, when the judiciary was working at it full capacity, it was unable to deal with immense backlog of cases; post-lockdown, with a number of new cases mounting up and already existing backlog of cases, the repercussions of the pandemic will be felt for many years. Although, The Indian Judicial system quickly and efficiently shifted from its old school approach to a new technological approach with virtual courts and e-filings to ensure that the justice delivery system is not stagnant,[13] but will it be enough?

The answer to this problem is also ADR, or to be precise, ODR. Online Dispute Resolution means simply as the name suggests, taking the various processes of ADR to an online platform, the counterpart of virtual judicial hearings. According to the United Nations Commission on International Trade Law, ODR encompasses a broad range of approaches and forms (including but not limited to ombudsmen, complaints boards, negotiation, conciliation, mediation, facilitated settlement, arbitration and others), and the potential for hybrid processes comprising both online and offline elements[14]. ODR as a mechanism is generally applied to resolving cross-border disputes or matters relating to e-commerce, but with the ongoing pandemic where maintaining physical distancing is mandatory, ODR is being viewed as a valid solution for solving disputes.

Justice Indu Malhotra once commented that ODR which was at an infancy stage in India, has now acquired greater importance due to COVID19[15]. The Peculiarity of ODR which has recently made it so popular is that it does not require physical presence of any of the parties, both the parties along with their arbitrators, mediator or negotiators can communicate with each other on a virtual platform without having the inconvenience of travelling to arbitration centres or expensive and fancy conference rooms. One can have one’s dispute resolved easily within the vicinity and comfort of either one’s office or one’s home. ODR as a mechanism is gaining a lot of popularity especially in International Commercial Transactions, where 2 people in different countries are easily able to settle their disputes without having one or both of them to travel to the place decided as the seat of arbitration.

ODR not only reduces the cost of litigation, but also reduces other related costs such as travel, accommodation, venue, etc. and provides for speedier results. ODR can proved useful where there are sensitivities between the parties that may be exacerbated while being in the same room (e.g. matrimonial disputes).[16] ODR not only provides convenience to the parties but also provides a sense of privacy and security as the platform is accessible to only the people involved.

Its drawbacks are the part and parcel of life, and ODR is no exception to the same. No matter how great an ideology or a concept is, it can never be perfect. In the words, as Prof. Stephan Hawking, “One of the basic rules of the universe is that nothing is perfect”. ODR comes with it’s own set of problems and setbacks. The very basic problem for ODR in India is digital illiteracy, even though India has a literacy rate of 74.04%[17], it still lacks digital literacy. India is a vast country with majority of its population living in the rural and semi urban areas, where not just internet connectivity but a knowledge of digital device is a problem.

Presuming that ODR as a mechanism is used by educated city dwellers, yet certain problems exists. Mechanisms of ADR such as mediation and negotiations are successful, because they carry a human touch, a sense of belonging, some things which are ignored in courts at times. Unfortunately, ODR also deprives the plaintiff of that feeling of personal touch, as one is speaking to a screen. Then comes the problem of internet connectivity. Even if one lives in a city with high speed internet, there is no guarantee that it might stop abruptly. There can be a storm on the day of one’s ODR meeting, and the light goes out, one cannot access the WiFi, or for that matter. Mobile towers can also be shut down in case of a severe lightening storm.

Presuming that one party to the ODR lives in a sensitive area, and a day before one’s ODR meeting, riots break out in that area and the government imposes severe restrictions on communication channels. One can argue that access to internet is one’s fundamental right, but then again, no right is absolute, as every right comes with certain reasonable restrictions. Then there is always a possibility that a technical problem such as one’s device can abruptly stop working due to bugs or viruses.

Cyber crimes such as hacking is another major threat to ODR, as internet plays a crucial factor in any ODR meeting, the vulnerability of getting hacked is always present. India is one of most vulnerable country when it comes to cyber security. Although platforms such as Legaler, Modron, RDO (Resolve Dispute Online), CODR (Centre for Online Dispute Resolution), AGAMI, SAMA etc. have been developed, the latter 3 have been developed by Indians, and many more are still in process, but the knowledge about these platforms is not common.

The biggest crisis for ODR is the acceptability, it is in the nature of human beings that they resist change. We have not yet accepted the traditional methods of ADR. But efforts are definitely being made in this sphere too, on June 6, 2020, Niti Aayog in partnership with Agami and Omidyar Network India hosted the first ever key stakeholder meeting to advance Online Dispute Resolution in India.[18] The meeting was attended by many senior judges, industry leaders, secretaries from different ministries and legal practitioners.

‘We need a fundamental change in mindset’[19], the mindset that ADR is secondary or inferior to litigation needs to change, and unless it does, all other reforms to promote ADR methods including arbitration, are likely to remain ineffective.[20] The need is not just for a change in the policies or amendments in the statues, but in the minds of the people that even though they always have the last recource of going to the court to get justice, one must also give ADR a chance.

End-Notes:
  1. https://doj.gov.in/sites/default/files/ASCI%20Final%20Report%20Page%20641%20to%20822.pdf
  2. https://ecourts.gov.in/ecourts_home/ (Last Visited on 9th December, 2020)
  3. https://www.prsindia.org/theprsblog/examining-pendency-cases-judiciary
  4. https://shodhganga.inflibnet.ac.in/bitstream/10603/10373/8/08_chapter%202.pdf
  5. https://doj.gov.in/sites/default/files/GNLU.pdf
  6. https://www.livelaw.in/pdf_upload/pdf_upload-369996.pdf
  7. Avtar Singh, Law of Arbitration and Conciliation 557 (EBC Publication, Gaziabad, 11th Edition, 2017)
  8. https://www.ag.gov.au/legal-system/alternative-dispute-resolution
  9. http://lawtimesjournal.in/alternative-dispute-resolution-india/#_ftnref2
  10. https://hbr.org/1994/05/alternative-dispute-resolution-why-it-doesnt-work-and-why-it-does
  11. https://icadr.nic.in/file.php?123?12:1490865651
  12. https://www.siac.org.sg/images/stories/articles/annual_report/SIAC_AR_2016_24pp_WEBversion_edited.pdf
  13. http://www.lawstreetindia.com/experts/column?sid=424
  14. https://www.uncitral.org/pdf/english/texts/odr/V1700382_English_Technical_Notes_on_ODR.pdf
  15. https://niti.gov.in/catalyzing-online-dispute-resolution-india (Last Visited on 07/01/2021)
  16. https://viamediationcentre.org/readnews/OTE1/Advantages-and-Disadvantages-Of-ODR (Last visited on 07/01/2021
  17. https://knowindia.gov.in/profile/literacy.php#:~:text=The%20literacy%20rate%20in%20the,Mizoram%20(91.58%20per%20cent) (Last Visited on 07/01/2021)
  18. Supra 15
  19. Supra 15
  20. Supra 6

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