This article is written by Anubhav Saxena, pursuing a Certificate Course in Arbitration: Strategy, Procedure and Drafting from Lawsikho.com.
In the current globalization era of electronic and IT age where suppliers, users, buyers and workers are all at different places and are separated by different time zones disputes which arise must be settled through electronic arbitration so that time and money both can be saved. This article tries to dwell more on the exciting future of e-arbitration provided systems of checks and balance are maintained like traditional arbitration.
Advantages of online dispute resolution
Time is money, with the number of B2B transactions increasing in e-commerce where disputes are between parties who have never seen each other, having electronic arbitration agreements as a part of the main contract shall both save time and productivity of all parties involved which are separated. A speedier resolution of cross border e-commerce disputes can be realized by saving time of travel and paperwork.
- Effectiveness of solutions, recommended or imposed
The e-arbitration agreement is a unique method where an electronic tribunal or authority will be decided to settle a dispute, on the positive side, if both parties have submitted to e arbitration then it’s quick and fast. Since information travels fast in electronic works, the solutions are effective in their implementation as it can affect the reputation. The extent to which courts agree to the E tribunal, which is set up will decide the effectiveness of the solution. In an increasing business scenario it is recommended but will need extensive clarity about the procedures; otherwise, it will be more imposed and will create more disputes.
Assessing methods of online dispute resolution
- Time and desire of the parties to adjudicate – mediation in electronic form is more achievable then e-arbitration.
- Types of the e-authority to adjudicate – a recognized acceptable cyber authority needs to be present which is accepted by courts.
- Rules which to be followed to arbitrate which should be acceptable to the courts in case the decision is challenged by parties.
- Can two methods of resolution for e.g. e-arbitration and e-conciliation happen one after another during the course of the arbitration.
- Availability of all documents in electronic forms which are acceptable to be present as fact.
Consequences of a Decision
- For making the decisions binding the courts have to adjust to accommodate the decisions taken in e arbitration and make it binding and recognize paperless systems of working and digital signatures instead of solely relying on traditional ways of signing documents.
Formation of the e-arbitration agreement
Electronic consent to arbitration
- Accessibility of the arbitration agreement – the arbitration should have clear unambiguous e-arbitration clause stating clearly the willingness of the parties to settle the disputes through electronic consent to arbitration through digital signatures.
- Electronic expression of consent – it is another issue which needs to be decided in the today’s context, how can one be sure if e-contracts have been given consent, in the absence of mechanism of physical signatures, either digital signatures or links on every page should be mentioned which should state that each clause has been verified and agreed upon to avoid confusion at later date.
Electronic Form of the Arbitration Agreement
- Requirements of international agreements
The e agreement must be clear to all parties. The arbitration clause should be in line with international laws like FIDIC and UNCTAD. The arbitration clause in the agreement even in electronic form should clearly define the authority and rules under which adjudication will be done. The fundamental principle of arbitration is that willingness to submit should be clearly established. Usage of digital signature should be mandatory as the same is a secure way to avoid confusion at a later time of acceptance. Additionally, compulsory recording of the IP address while downloading a contract should be there and simultaneous sending to the emails of the parties should be there which would prove the electronic conversation at same time regarding acceptance.
- Requirements of national laws
The electronic contract should follow the requirements of national law and should be transmitted over electronic mail and secured servers while being deposited in a secure vault so that tampering is not possible and courts can recognize the e contracts which have been digitally signed and stored.
Arbitration in consumer disputes
- Arbitrability of consumer disputes
In b2C disputes, e arbitration should give faster decisions if agreed upon by the parties. However since companies have more financial power and resources than individual consumers, it’s the consumer who should choose whether he decides to e arbitration, moreover the option of selecting the method of arbitration should be presented to him after rising of dispute so that there can be a fair resolution of disputes.
- Validity of the arbitral clause
The arbitral clause should clearly state who can invoke the arbitration and under what circumstances the same can rise. However, concern of the consumer should be addressed first as the success of e arbitration relies solely on the fact how secure the consumer feels in arbitration in the electronic domain where companies hold more resources.
Electronic arbitration procedure
Conduct of electronic proceedings
- Stages of electronic proceedings
- Like in regular proceedings, after digital signing of a contract in an electronic way, if a dispute arises, the same should be conveyed through electronic means by email etc.
- Reminders in secured drive should be given so that the same is accessed by both parties, once that is also not able to resolve disputes then.
- Electronic notice to invoke arbitration should be sent along.
- After E tribunal is set up and, E arbitration is commenced the same should be conducted through video conference and recorded.
- Statement of claims and defence along with supporting documents should be provided in electronic forms.
- Cross examination if required should be held through video links.
- The decision should be given electronically and copy should be sent to parties in sealed covers signed by the authority for implementation.
- Principles governing electronic proceedings
- Equal opportunity should be given to both the parties by the arbitrator to present the case.
- All documents or statements sent to the arbitrator electronically should be sent to another party and the same should be time stamped and saved in a secured server to prove when they were submitted.
- Safety of the documents: the server where all the documents are saved should be secured as to not allow access to third parties which can cause tampering with the evidence and also breach confidentiality.
- Availability of documents: all documents should be available to both parties so that parity can be maintained in submitting the case like in traditional methods of arbitration.
Administration of electronic evidence
- Gathering of electronic evidence
The ways of gathering electronic evidence could be for e.g. in B2C could be recorded in the history of transactions on websites, also the evidence can be through email where copy of all orders and payments receipts can be stored. In case of dispute raised the chat history between the parties can be submitted, regular evidence in electronic mail can be submitted. creenshots also can be submitted as evidence of any transaction or conversation.
- Electronic evidence before an arbitral tribunal
The evidence in electronic form is difficult to access; however, through established mechanisms of checks and balances, the same can be overcome. For example, all electronic documents should be signed digitally, and the same should be done using encrypted technology so that chances of fraud are less. However, it would also depend on the choice of the law of governance the parties had chosen.
For e.g. if the arbitration agreement is based on UNCITRAL law of commerce, then decided steps can be taken by the arbitrator to determine the veracity of the evidence.
Efficacy of electronic arbitration
Seat of electronic arbitration
- Utility of determining place of arbitration
It is very critical in traditional as well electronic arbitration to determine the place of arbitration as rules of the place shall hold valid there.
- Seat of arbitration – a strictly legal concept
The seat of arbitration should be decided based on the willingness of parties, since the parties are spread through distance and the arbitration being in electronic regime hence more than the seat of arbitration what is more critical is that legal linking of disputed item and parties is established if parties are unable to choose the seat the same should be get done by a competent arbitrator.
- Form of the electronic award
The written award document should be digitally signed and encrypted and should be uploaded on the website of the arbitration authority whose servers should be secured as per the norms.
- Communication of the electronic award
The award should be communicated electronically digitally signed and also in hard copies so that the same can be enforced or challenged in courts.
- Requirement of writing
To bring clarity and also to ensure correctness and no false play, hard copywriting should be given for award and sent to parties.
- Rise in e-arbitration as a dispute resolution mechanism
E arbitration is the future; however, proper checks and balance needs to be made in the system for its implementation. It’s fast and quick; however, if the safety of data and records is maintained the same can be a useful tool in e-commerce transactions.
- Types of contracts concluded by electronic means:
- EDI (Electronic Data Interchange): The contracts which are concluded where software is transferred and records are maintained online.
- Web-based contracts.
- Electronic mail – email are mechanisms by which the communications in contracts can be executed and preserved.
With the advent of technology in the growing e-commerce era e-arbitration are the future however the same can only be successful if there are laws, digital security, digitization of courts, online paperless judiciary and codal provisions should be in place in india, which are followed otherwise there shall be rise in more disputes and the basis purpose of arbitration will be thwarted and consumers will be denied equitable justice.
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