Online arbitration can be defined as an arbitration in which all aspects of the proceedings are conducted online. Online arbitrations can have hearings through the use of video conferencing, but most online arbitrations simply require parties to upload their evidential documents, respond to questions from the arbitrator and they will receive a decision from the arbitrator.
Online arbitrations are widely used for internet domain name disputes and these can be legally binding or non-binding in nature. Internet domain name disputes are usually governed by the Internet Corporation for Assigned Names and Numbers’ (“ICANN”) Uniform Domain Name Dispute Resolution Policy (“UDRP”). The World Intellectual Property Organization (“WIPO”) is one of the UDRP dispute resolution service providers administering the UDRP Administrative Procedure for domain name disputes and is responsible for appointing panelists to determine the dispute.
Online arbitration shares many similar advantages as online mediation, such as lower costs and greater flexibility due to their asynchronous nature. The disadvantage of online arbitration not having face-to-face interactions is also less significant as arbitrations rely less on the parties’ interactions but more on evidentiary written submissions.
Online arbitration is also used in business to consumer disputes. However it is generally unpopular not because it is a poor medium for dispute resolution, but because consumers view such arbitration agreements as denying them access to justice through the courts and in particular, to class action suits which would offer more compensation.
Validity of online Arbitration.
● The applicability of ODR in a developing nation like India is still in a primitive stage. However, owing to the pandemic outbreak, ODR is starting to acquire increased prominence.
● On a conjoint reading of the provisions of the Indian Evidence Act, 1872, with the Arbitration and Conciliation Act, 1996 and the Information Technology Act, 2000, it is evident that the Indian laws provide for the legality and technical viability of the ODR mechanisms.
● Section 5 of the Information Technology Act, 2000 provides that digital signatures have the same effect as a paper signature, which fulfills the criteria of section 31(1) of the Arbitration and Conciliation Act, 1996.
● The signed copy of the arbitral award passed online can be provided to the parties by the arbitral tribunal electronically via email and the signed copies can be simultaneously sent through post or the arbitrators can also put their digital signatures and provide accuracy and integrity to the award. The original signed copy, either received by post or it's a digitally signed award, can be filed before the courts, for the enforcement of the arbitral award.
● There won't be any change in the procedure for enforcing an online award. According to the passing of valid award online, it can be enforced in accordance with the procedure outlined in the Arbitration Act read with the execution procedure enshrined under Code of Civil Procedure, 1908 (CPC).
● In Sundaram Finance Ltd. v. Abdul Samad and Anr[(2018) 3 SCC 622], the Hon'ble Supreme Court has clarified that execution proceedings can be invoked by an award holder before any court in India where assets of the judgment debtor are located.
● Commercial courts established under the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act 2015 would have jurisdiction in cases whether the subject matter of the arbitration is of a specified value and pertains to monetary award.
● Additionally, common issues in ADR pertaining to jurisdiction and other issues relating to geographical limitation seem to be eliminated along with ensuring automated administrative tasks, promotion of eco-friendly processes and improved productivity of professionals.
● Recently, the Supreme Court of India in a suo motu writ petition captioned 'Expeditious trial of cases under Section 138 of N. I. Act, 1881', took note of the observations in MetersandInstruments Private Limited &Anr. vs. Kanchan Mehta [2017 TaxPub (CL) 0840 (SC]
“Use of modern technology needs to be considered not only for paperless courts but also to reduce the overcrowding of courts. There appears to be a need to consider categories of cases which can be partly or entirely concluded "online" without the physical presence of the parties by simplifying procedures where seriously disputed questions are not required to be adjudicated.”
Online arbitration is not different from that of conventional arbitration models. With changing times and technology, E-DRM is the future of arbitration, which is inevitable. Sooner the companies adapt to this futuristic model of conducting arbitration, better and advantageous it would be for such companies to provide speedy disposal and resolutions to its customers both in terms of costs and time. E-arbitral awards in our opinion would have an equivalent effect as that of traditional arbitral awards and would be final and binding upon parties.
It is important to emphasize on the existence of some elements in online arbitration such as impartiality and independence of arbitrators whilst it may not be necessary for other elements to exist in online arbitration, or the degree of compliance with such elements may be different. This, however, may not hamper the effectiveness of such a process in resolving the disputes.
Online arbitration can provide a very flexible means of dispute resolution that can be tailor made in accordance with the parties needs and at the same time be recognized as a legally valid process.