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The challenges for ODR

ODR faces various obstacles in its way of growth in India such as lack of human interaction and communication, lack of literacy, inadequate confidentiality and secrecy of proceedings, lack of trust and confidence, limited range of disputes, cultural, educational and language barriers, negative mindset of lawyers. But one of crucial and pivotal challenge is the admissibility of ODR.

i. i. Challenges as To Admissibility:

a) Mutual Consent and Writing:

For invoking ODR process, mutual consent of parties is essential, whether through an explicit clause in contract or by separate mutual agreement between parties, otherwise any decision rendered by neutral shall not be legally valid and binding on parties. Another essential condition is agreement between parties must be in writing. Article 2 of New York Convention and Article 7(2) of UNCITRAL Model Law requires the agreement must in writing. But at the same time New York Convention is silent upon agreements entered into through electronic communications. Whereas UNCITRAL Model law recognizes the arbitration agreements entered into by electronic communications and the same has been followed by India its 2015 Amendment to Act of 1996.

b) Place of Proceeding:

In adjudicatory process, place of arbitration is geographically determined which constitutes a core element on which numerous legal implications depend.[33] If proceedings are conducted entirely online with parties and neutral in distinct places, prima facie, it seems impossible to determine place of proceedings. This observation led some scholars to conclusion that virtual arbitration has no situs[34]

ii. Jurisdiction:

When disputes are resolved online, question as to applicable substantive law to disputes arises. In case of international arbitration it is important to distinguish four choices of law issues,

a) Substantive law governing merits of parties’ contract and claim

b) Substantive law governing parties’ arbitration agreement

c) Law applicable to arbitration proceedings (curial law or lex arbitri) Conflict of law rules applicable to each of forgoing laws.[35]

iii. Pre-trial Stage:

Important elements of pre-trial stage are discovery, interrogatories and collation of evidence in support respective contentions of parties may be minimized in ODR for speedy resolution leading to failure to discover true and correct state of facts.

iv. Awards:

Taking New York Convention as a starting point for analysis of whether electronic arbitral awards are admissible within current legal framework, it can be noted that convention does not explicitly provide for an arbitral award signed and in writing.[36] Further, Article 8 of UNCITRAL Model Law on Electronic Commerce explicitly states that requirement to present information in its original form can be met by an electronic data message. Article 31 (1) of UNCITRAL Model Law, requires “award shall be made in writing and shall be signed by arbitrator.” Followed from Model Law, in India section 31 of Arbitration and Conciliation Act, 1996 requires the same. But, traditional concept of writing and signature now has been replaced by Information and Technology act, 2000 which has given legal recognition to electronic records and digital signature.[37]

v. Enforcement:

It is the single most important pillar upon which edifice of international arbitration rests. If Act of 1996 is considered following points to be considered:

a) In adjudicatory process decisions are to be enforced through the courts of law.

b) Orders in execution are subject to appeal

c) Intervention of court during and after pronouncement of decision.

This may give rise to issues like jurisdictions or law applicable or place of proceedings for which there is need to apply the conflict of rules or proper laws to avoid forum shopping.

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