What is ODR?
Online Dispute Resolution (“ODR”) is a branch of alternate dispute resolution that either adjuncts or seeks to replace the traditional methodology that the parties use to resolve disputes. It emphasizes on easier and more efficient methods of addressing conflicts by building up on the foundational characteristics of alternate dispute resolution. It focuses particularly on small and medium-value cases deploying digital technology and dispute resolution methods such as conciliation, mediation, and arbitration for expediting a mutually beneficial solution for the parties in dispute.
NITI Aayog, a policy Think Tank of the Government of India conducted a stakeholders’ virtual consultation on June 06, 2020, for advancing ODR in India, wherein senior judges of the Supreme Court, secretaries from key government ministries, leaders of the industry, legal experts expressed their views recognizing the opportunity that ODR presents in India. ODR, which is at an infancy stage in India, has presently acquired greater importance due to the global pandemic. As per the press release by NITI Aayog, in the coming months, ODR could be the mechanism that helps with achieving expedient resolution. With reference to present Indian socio-economic conditions, dispute resolution is one of the key facets to the revival of the economy post the pandemic crisis.
The ODR ecosystem has witnessed exponential growth across the world in the last two decades. India, though in its nascent stages of ODR development, has shown early promise in ODR integration at all three levels – the Judiciary, Government and the private sector. In addition to various Government programmes that help resolve disputes regulated by them (for eg, NIXI’s)
Domain Dispute Settlement Mechanism, SAMADHAAN Portal, RBI’s ODR Policy on Digital Payments), the Supreme Court, in Shakti Bhog v Kola Shipping, and in Trimex International v Vedanta Aluminium Ltd., recognized the validity of the use of technology in the arbitration process. The Court also upheld the validity of online arbitration agreements through emails, telegrams or other means of telecommunication which provide the record of the agreement.
Subsequent to the virtual consultation, NITI Aayog released a draft report in October 2020 on the proposed ODR Policy Plan for India. According to this report, the use of technology to actually resolve disputes (such as video conferencing and digital circulation of files) can constitute ODR. ODR is also more than just e-ADR (electronic alternate dispute resolution, like virtual scheduling) it can include the resolution of disputes through automated dispute resolution or AI/ML tools.
According to the draft report of NITI Aayog, at a preliminary level, ODR refers to the usage of Information and Communications Technology (“ICT”) tools to enable parties to resolve their disputes. This includes using simple to complicated communication technologies such as audio-visual tools ranging from telephones to smartphones to LED screens, spreadsheets, e-mail and messaging applications, with the crux of it being to enable dispute resolution without a physical congregation of the parties. At an advanced stage, ODR also holds immense potential to improve the dispute resolution experience through intelligent decision support systems, smart negotiation tools, automated resolution, and machine learning.
The NITI Aayog virtual consultation advice for a hybrid of opt-in and opt-out models for ODR in India. Presently, India practices an opt-in model wherein the parties can voluntarily opt for mediation. In contrast, various countries such as Italy practices the opt-out model, as per which the parties are mandated to conduct mediation proceedings and in case of failure to reach a resolution, parties may opt for litigation.
In the private sector, various enterprises, especially those working in e-commerce and other internet-based sectors, are increasingly resorting to ODR to save time and money in resolving disputes that are arising during the course of their business. Given the initial requirement for technical expertise, it is ideal even for the Government-run and court-annexed ODR platforms to partner with private ODR service providers to incorporate off-the-shelf technology solutions to establish a comprehensive ODR framework.
NITI Aayog has launched a one-of-its-kind handbook on ODR on April 10, 2021, inviting business leaders to adopt ODR in India. It highlights the need for such a mechanism, the models of ODR that businesses can adopt and an actionable pathway for them. The handbook prescribes certain essentials as design principles for ODR platforms to operate with. These principles determine the reliability and functionality of an ODR platform, to name a few, the essentials are – interoperability, scalability, portability, modularity, user-centricity, data-driven development, and data empowerment. Privacy and confidentiality have been lauded as the utmost pillar for the successful conduct of ODR between parties.