Online Dispute Resolution (ODR): The Modern Way to Access Justice

“The question today is not whether we should adopt technology but how well do we adopt technology.” 

-Justice Chandrachud 

With the interruption of worldwide commerce, plunging stock markets, major projects coming to a halt and company earnings taking a hit. The COVID-19 pandemic has destabilized the entire world economy. Countries are locked down. The world has come to a standstill. Yet, the disputes haven't dissolved. In fact, for many businesses, COVID-19 has caused huge supply-chain difficulties, triggered employment issues, and raised potential liquidity concerns. And with this, disputes have increased.

Disputes are on the Rise

The international supply chain is disrupted because countries are locked down as a precautionary measure to contain the spread of the virus. Companies all over the world are not able to fulfill their contractual obligations. Law Firms are advising their clients to suspend contracts and invoke force majeure clauses. In addition to this, lawyers are revising dispute resolution clauses in the contracts.

After the Pandemic

Global commerce may have been disrupted for now, but when it resumes, there will be more cases to arbitrate than ever before. It is very likely that once the courts open, many lawsuits will be filed. Arbitration clauses will be invoked. Parties to a contract will seek to recover the no-fault losses arising out of the pandemic. The parties can file a number of claims, including: 

a)    Contractual claims: These claims can arise from seeking to avoid, delay or terminate the contractual obligations, issues relating to frustration of a contract, force majeure and other contractual terms. In addition to this, the issues can be related to remoteness and foreseeability of the damage. 

b)   Commercial delays: Claims will be initiated involving cancellations due to disruptions in construction, manufacturing of goods and provision of services. 

c)    International trade: Claims relating to international transit, from shipping to rail to air and sea, including claims involving delays or cancellation of shipment of components for a wide array of consumer and industrial products. 

d)   Insurance claims: Claims related to coverage of losses sustained can also arise. 

e)    Employment claims: Many companies had to let go of their employees and some had to cut pays. In these cases, the disputes will arise relating to pay and terms of working and potential claims for breach of duty of care. 

f)    Insolvency claims: Companies facing huge losses, will likely file insolvency claims. 

g)   Patent claims: A lot of organizations working on the vaccine will file patent claims.

h)   Healthcare claims: There will be claims in the biotech, pharma and healthcare sector. 

i)     Data Privacy claims: Governments all over the world are trying to make apps to track the transmission of the virus. The step brings into forefront the issue of data privacy of individuals. 

Effect on Dispute Resolution Mechanisms

Courts, tribunals and various dispute resolution bodies are setting aside or postponing hearings. Matters that once would have been addressed in person are now being resolved through email, video link or teleconference. Some courts in India are already conducting virtual hearings. The Supreme Court of India has already gone digital. 

As for alternate dispute resolution mechanisms, international arbitration practice in China, South Korea, Japan, Singapore, Europe, the US and the rest of the world have been disrupted because of travel bans. Parties and arbitrators have been further affected by travel restrictions and other governmental measures where arbitral seats are situated. To cope up with this, arbitral institutions around the world have been coming up with solutions to deal with the new challenges posed by COVID-19. 

In this new world where social distancing is recommended, digitalization of dispute resolution mechanisms is bound to become the norm. This may be the push to bring online dispute resolution (ODR) in the front. 

Online Dispute Resolution in India

Combined reading and interpretation of the Arbitration and Conciliation Act, 1996, Information Technology Act, 2000, and Indian Evidence Act, 1872 make online dispute resolution mechanisms legally and technically viable. In addition to this, ODR helps overcome jurisdictional issues, eliminates geographical barriers, automates administrative tasks, improves the productivity of professionals and delivers a quick, economical and effective resolution to the disputes.

Since March 2020, the Supreme Court has issued orders that it would hear matters through video conferencing. 

The pandemic has accelerated a shift towards technology, including for resolution of disputes. This kind of  progressive approach in the justice delivery system has been critical. The systematic change forced by the pandemic had altered the course of access to justice in an unprecedented way. 

Justice Chandrachud is leading the e-courts initiative. The introduction of e-filing from anywhere in India with 24/7 availability is revolutionary. A closed-door meeting on ODR was hosted by NITI Aayog. In the meeting, Justice Chandrachud mentioned how the relevant question today is- how well can we adopt technology to enhance access to justice and strengthen the rule of law? He also stated that the use of technology should be to promote a sense of inclusive justice, justice for which the system is meant to deliver a service.

Advantages of ODR

1. Overcomes the disadvantages of International Arbitration: Parties in international arbitrations have complained of rising costs and procedural delays, specifically in arbitrations where it is increasingly challenging to get parties from different countries, as well as arbitral tribunals, in the same room at the same time. ODR overcomes all these disadvantages as the parties do not have to pay any expenses on travel. 
2. Provides short-term relief: Arbitration or litigation can be costly and time consuming and a formal court or arbitral dispute is unlikely to provide immediate short term relief to acute cash flow issues or the inability to perform contractual obligations. These forms of dispute resolution are not designed to provide interim commercial solutions during these unprecedented times. 
3. Quick Resolution: Helps in quick resolution of disputes. This would allow businesses to quickly start functioning again. 

Disadvantages of ODR

Increase in electronic filings and use of videoconferencing in arbitration proceedings would lead to heightened concerns of cybersecurity and privacy protections. The documents uploaded can be hacked if a proper system has not been put in place. To overcome this disadvantage, cyber security policies and sessions for training of arbitrators have been conducted by arbitral institutions like the American Arbitration Association with its international division, the International Centre for Dispute Resolution (AAA/ICDR). In addition to this, International Council for Commercial Arbitration (ICCA), the New York City Bar Association and the International Institute for Conflict Prevention & Resolution recently published the 2020 Cyber security Protocol for International Arbitration. 

Conclusion

Online dispute resolution is the way of the future. The changes adopted by the arbitration institutions in light of the pandemic are likely to be permanent. The pandemic has accelerated the adoption of technology to resolve disputes. With technology facilitating the process, the disputes can be resolved in an efficient and timely manner.