ONLINE DISPUTE RESOLUTION (ODR) SYSTEM FOR DIGITAL PAYMENT IN INDIA

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Introduction 

Online Dispute Resolution, or ODR, refers to a collection of technologies designed to enhance or replace conventional methods of resolving conflicts. Alternative dispute resolution, or ADR, shares and improves on the core principles of ODR, stressing quicker and more efficient means of resolving disputes. ODR employs a variety of technologies and approaches for resolving disputes.

ODR platforms that are seeking to resolve something narrower – such as negotiating a dollar amount for a settlement – might support an exchange of chat messages between parties. They could convey demands and offers using the platform. This could happen synchronously or asynchronously and a mediator may or may not be involved.

Parties may participate in a variation of ODR that resembles conventional mediation but is performed through video conferencing, with a mediator regulating who speaks with whom and when. During the mediation, depending on the platform, the parties may be able to collaboratively develop settlement language and access other documents.

Indian Judiciary and ODR

In India, the judiciary has been at the forefront of reform. The eCourts Mission Mode Project has produced a number of critical initiatives whose influence will be seen both vertically and laterally.  However, an efficient system that settles issues before they reach the courts is required to make dispute resolution significantly more successful. This Committee is tasked with developing one such framework that builds on previous efforts and moves us closer to realising the objective established in our Constitution “equal access to justice for everyone.”

In the face of the pandemic, the court has taken the lead by positively reacting to the system’s technical demands. The judiciary has performed a considerable number of virtual hearings, and as a result, the conventional judiciary has been redefined in many ways, with congested courthouses, overflowing paper files, and courtroom hearings.  The successful use of technology has not been restricted to the courts, but has been expanded to other institutions as well.

Moving forward, there may be a spate of new technologies available that go beyond what is now achievable in order to improve access to justice. One such relatively new approach of settling conflicts helped by technology is Online Dispute Resolution (ODR).

Preparedness and Acceptance of the Judiciary

1.  ICT Integration in the Judiciary

The judiciary’s road to ICT integration started out in 1990 with attempts at computerisation of judiciary initiated by the National Informatics Centre (NIC). Under the leadership of the E-Committee for Monitoring the Use of Technology and Administrative Reforms in the Indian Judiciary (E-committee) this project continues to advocate and work towards greater reliance on ICT tools in the justice delivery process.

(a) E-filing of cases:

The eCourts Mission Mode Project has already launched eFiling Portal for District Courts and High Courts. These numbers are likely to have seen a further rise during the COVID-19 induced crises. To address the burgeoning need to mainstream e-filing, in May 2020, the Supreme Court issued Practice Directions for eFiling to enable Advocates-on-record to file cases online through an e-filing platform.

(b) Electronic Signature:

Electronic signature is a crucial step towards digitising legal processes. Considering the low availability of the hardware cryptographic token for eSignature on pdf documents, the eFiling Portal launched under the eCourts Mission Mode Project also provides a facility for eSigning.

(c) Integration of Artificial Intelligence:

Taking ICT integration one step further, the Supreme Court has now harnessed the potential of artificial intelligence through the development of SUVAS i.e. Supreme Court Vidhik Anuvaad Software. This artificial intelligence powered software has the capability to translate judgments, orders and judicial documents from English to nine vernacular language scripts and vice versa.

2. Explicit Recognition of ODR’s Potential

(a) Recognition by judicial members

In a stakeholders’ meeting titled “Catalyzing Online Dispute Resolution in India” organised by NITI Aayog on June 6 2020, Justice Indu Malhotra spoke about the advantages of ODR as an expeditious and cost-effective mechanism for dispute resolution. She noted the possibility for business conflicts, particularly those involving Micro, Small, and Medium Enterprises and those arising under the 2016 Insolvency and Bankruptcy Code. At the same conference, Justice D.Y. Chandrachud remarked on the value of ODR as a service for obtaining justice and, as a result, using technology to foster a sense of fairness. In addition to conflict resolution, ODR may provide dispute containment and avoidance services.

(b) Conducting e-Lok Adalats

The COVID-19 pandemic has prompted authorities to incorporate online techniques into their regular operations. As a result, India has seen the formation of numerous e-Lok Adalats around the country. On July 13, 2020, the Chhattisgarh High Court and the State Legal Services Authority hosted the first e-Lok Adalat, which resolved 2,270 cases in a single day by video conferencing. Following this success, e-Lok Adalats have been organised in Karnataka which saw even higher numbers. Some State Legal Service Authorities have taken technical assistance from ODR service providers to organise e-Lok Adalats.

Advantages of ODR

The incorporation of ICT into dispute resolution procedures has enormous promise for overcoming issues that are normally associated with courts, as well as those that have afflicted ADR systems. The following are some of the primary benefits of ODR that have already been felt in a few jurisdictions:

1. Cost Effective:

The financial burden of conflict resolution sometimes turns the procedure into a punishment, obstructing access to justice. As a result, ODR is a cost-effective means of conflict settlement for both disputants and neutrals.

ODR does not, by its very nature, need parties to travel large distances or rent a venue in order to resolve a dispute. Furthermore, ODR has the potential to minimize legal expenses by reducing the time it takes to resolve disputes and eliminating the need for legal counsel in certain types of cases. Aside from these direct costs, businesses also experience secondary costs as a result of protracted legal processes.

For example, businesses experience a loss of productive time, a decline in employee well-being, a decline in investor confidence, a reduction in investment, and, as a result, slower economic growth. While ODR will not be able to totally eliminate all of these effects, it can assist to mitigate them and hence be cost effective.

2. Convenient and Quick:

The pendency of cases in Courts across India has been one of the major challenges for the justice system. Excessive adjournments, vacancy in judicial and administrative staff, and complex processes involving multiple participants are some of the major reasons for such pendency.

By offering a speedier and more comfortable mechanism for resolving disputes, ODR can help to avoid such delays. ADR, in and of itself, uses simplified protocols and a set schedule for processes that lead to effective conflict settlement. In addition to these advantages, ODR removes the requirement for travel and schedule synchronization. This reliance on asynchronous communication, allows parties to submit their arguments intermittently, or follow a ‘documents-only’ process.

The absence of a requirement for physical presence decreases the need for travel, which benefits parties involved in cross-border conflicts in particular. Similarly, the usage of ODR within businesses such as e-commerce organizations offers customers with a one-stop shop for resolving their problems, resulting in faster and more convenient dispute resolution.

3.Encourages Dispute Resolution:

By addressing primary difficulties such as lack of access to actual courts or ADR centers, expense of conflict resolution, and hurdles related to disability, ODR can dramatically enhance access to a range of dispute resolution methods. ODR technologies, such as online negotiation and mediation, make the dispute resolution process less combative and difficult for the parties because they are based on mutual agreement.

The ability to resolve disagreements at the user’s own home might make the dispute resolution process feel more accessible. As a result of the improved overall experience, more parties may choose to resolve their conflicts through such official channels rather than not claiming their rights at all.

Current Status in India.

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. The part that follows examines the current state of ODR in India and where we stand in terms of integrating technology into our dispute resolution system. It examines the government’s readiness to incorporate ODR, as well as the legislative stance on ODR, the judiciary’s approval of ODR, and private-sector innovations. The chronology below summarizes some of the significant measures that have prepared the path for ODR expansion in India.

1. Adoption of ODR by Government Departments and Ministries:

In the recent past, Ministries and Departments within the Government have acknowledged the potential of ODR and launched programmes that help resolve disputes in the sectors regulated by them. Some of the initiatives that are paving the way for ODR integration with the Government include:

(a) National Internet Exchange of India’s (NIXI) Domain Dispute

Settlement Mechanism- The National Internet Exchange of India (NIXI) has approved the.in Domain Name Dispute Resolution Policy (INDRP), which outlines the rules and circumstances for resolving disputes resulting from the registration and usage of the .in Internet Domain Name.

(b) Initiatives by the Department of Consumer Affairs-

The Department of Consumer Affairs launched the National Consumer Helpline (NCH) to disburse information on issues pertaining to consumers and promote consumer welfare. Online Conciliation and Mediation Centre (OCMC) was established at the National Law School of India University under the aegis of Ministry of Consumer Affairs with an aim to propel online mediation as a first choice for resolving consumer disputes.

(c) SAMADHAAN Portal- The Ministry of Micro, Small and Medium Enterprises (MSMEs) launched the SAMADHAAN portal, with features such as e-filing and online settlement of MSE dues against Public Sector Enterprises, Union Ministries, Departments, and State Governments, which account for nearly 94 percent of MSE dues. MSEs can also utilize the website to submit payment due applications in state-specific MSE Facilitation Councils against private firms, proprietorships, and others.

2. Key Legislations in India:

There does exist a governance framework to regulate ODR in the country. There are a range of support legislations, which address both the technology and ADR aspects of the ODR. In the realm of ADR, the most prominent of these legislations is the Arbitration and Conciliation Act, 1996. While this legislation recognizes arbitration procedure, the power of the court to refer parties to not just arbitration but all forms of ADR come from the Code of Civil Procedure, 1908. The Securities and Exchange Board of India (Ombudsman) Regulations,

2003 provides ombudsman services to resolve disputes regarding allotment of securities, receipt of share-certificate, dividends, interest on debentures and other related matters.

3. United Nations Convention on International Settlement Agreements Resulting from Mediation, 2018:

To improve ADR in India, the government has opted to be regulated by international commitments and norms of global best practises, in addition to domestic legislative measures. The United Nations Convention on International Settlement Agreements Resulting from Mediation (commonly known as the “Singapore Convention”) is one of the most recent moves in this direction. On September 12, 2020, the Convention entered into force in India. It provides for direct enforcement of mediated settlement agreements as well as quick enforcement of international mediation settlement agreements.

Disadvantages of ODR

Though ODR has enormous potential for providing efficient and effective conflict resolution, it faces various hurdles as it integrates into the mainstream dispute resolution ecosystem. The availability of reliable and secure technology tools, digital infrastructure to enable usage, willingness of parties to adopt a new way of resolution, co-operation and support from lawyers, judiciary, and government to ensure enforcement of awards and agreements, and other factors all play a role in the success of ODR implementation.

1. Digital infrastructure:

A solid technology infrastructure across the country is a prerequisite for ODR integration. This involves having access to laptops, smart phones, and a medium to high-bandwidth internet connection for at least the duration of important hearings. Those with limited access to digital infrastructure are likely to be disadvantaged by the lack of such regulations. The National Digital Communication Policy of 2018, which aspires to deliver universal broadband access and allow effective participation in the global digital economy, has made efforts to build digital infrastructure.

2. Digital Literacy:

Apart from digital infrastructure, a pre-requisite to ODR is widespread digital literacy. In India, this digital literacy often varies across age, ethnicity and geography. To enable the large-scale adoption of ODR it is necessary that such a digital divide be addressed. To attain this, programmes focusing on increasing internet connection in rural regions, as well as focused attempts to popularize the fundamental skill sets necessary to utilise ODR services, are required. Initiatives like the Pradhan Mantri Gramin Digital Saksharta Abhiyaan (PMGDISHA) would go a long way toward ensuring that even the most distant and marginalized elements of society have access to justice.

3. Lack of awareness regarding ODR:

In its early stages, ODR resembles off-line ADR processes, although via a technological interface. Even yet, in India, the use of technology to link disputing parties with Neutrals and resolve conflicts is still in its early stages. With more people using ODR, people grow accustomed to it. As a result, in addition to raising awareness through regular efforts, further channels for continual ODR usage are required.

4. Lack of trust in ODR services:

The issue of lack of confidence in ODR is reflected in the following point. This skepticism arises from a variety of sources, ranging from technological distrust to concerns about the enforcement of ODR findings. At every stage of the effort to mainstream ODR, the issue of trust must be addressed.

5. Privacy and confidentiality concerns:

Greater integration of technology and reduced face to face interactions create new challenges for privacy and confidentiality, especially in dispute resolution. Online impersonation, violation of confidentiality through the circulation of papers and data given through ODR procedures, and tampering with digital evidence or digitally transmitted awards/agreements are just a few of the issues. To overcome these problems, ODR service providers should focus on developing strong data storage and management systems.

Conclusion

In India, the conflict resolution mechanism faces a number of long-standing issues, including inefficiency and lack of access. Dispute resolution in India requires a significant investment of time and money due to delays in settlement and high pending cases in traditional courts and tribunals. This has a negative impact on India’s ease of doing business. Despite recent improvements in the World Bank’s ease of doing business ranking, India’s dispute resolution mechanism is ineffective, preventing the country from creating an ideal environment for enterprises and entrepreneurs.

The future of conflict resolution will be defined by ICT advancements and new concepts that will make dispute resolution more efficient and accessible to all members of society. In this regard, ODR has a significant role to play. ODR can provide tailored dispute resolution solutions for businesses through simply accessible and user-centric methods, allowing entrepreneurs to enforce contracts quickly.

Furthermore, it has the potential to make conflict resolution more accessible to the general public, reducing the pressure on the existing court system. The question of how and whether such initiatives will be required will be determined by how the ecosystem responds to the current guidance framework in the coming years. What is, however, certain is that our conceptions of normal are vastly changing. In the dispute resolution ecosystem, ODR is that change. ODR is the future and that future is now.