Online dispute resolution needed a booster shot. This covid-era game-changer might be it.
However, as covid lockdowns ushered in a wider acceptance of video conferencing for everything from office meetings to school learning, Presolv360 began to see a change. By the end of 2023-24, this Mumbai-based online arbitration and mediation firm had handled 125,000 cases.
Krunal Modi, founding partner and manager for strategy and innovation, Presolv360, expects more companies and individuals to embrace online dispute resolution as the Union government seeks to include video conferencing in the next amendment of the Arbitration Act, among other proposals.
“This will certainly encourage the adoption of online arbitration in the country and aid the stakeholders by improving efficiency and affordability. The convenience this mode brings to the table is especially beneficial for a vast and diverse country like India, where people in remote areas often struggle to access traditional dispute resolution forums,” said Modi.
“By offering video conferencing facilities, among other advantages, ODR platforms become a viable alternative to disputing parties in comparison to traditional dispute resolution forums.”
A new definition
The proposal to add video conferencing in the Arbitration Act comes as more than 50 million cases are pending in Indian courts.
India’s Mediation Act, which empowered another out-of-court dispute resolution process last year, included video conferencing in its definitions, bolstering an ecosystem of online dispute resolution service providers in the country.
The proposed inclusion of video conferencing in the Arbitration Act is part of the Centre’s push for institutional over ad hoc arbitration.
The draft law sets the new definition of arbitration as “any arbitration whether or not administered by an arbitral institution and includes arbitration conducted, wholly or partly, by use of audio-video electronic means”.
The government has also defined “audio-video electronic means” as the “use of any communication device for video conferencing, filing of pleadings, recording of evidence, transmission of electronic communication, for the purposes of conduct of arbitral proceedings”.
For speed and efficiency
Online dispute resolution platforms play a pertinent role in the legal system by allowing parties to resolve small-value matters with relative ease and speed. For instance, a person being sued for non-payment of rent need not go to a small causes court for respite. They can choose the services of an ODR platform, which provide both arbitration and mediation services.
Small-to-mid value disputes related to sectors such as finance, consumer, insurance, securities market, real estate, and micro, small, and medium enterprises (MSMEs) are generally registered on ODR platforms, experts said. The average value of disputes resolved by ODR platforms are in the range of ₹10-15 lakh.
Matters related to family law, which are resolved in family courts across the country and often referred to mediation, can also be directly taken to ODR platforms for speedy disposal, law practitioners said.
Online dispute resolution platforms can also relieve high courts of some of the burden of appointing arbitrators for commercial disputes, thus reducing pendency in the legal system, they said.
“Certain amendments such as the inclusion of audio-video means to conduct arbitration, recognition of a digitally signed arbitration agreement, etc., align with the core processes used by ODR platforms. By formally incorporating them in the legal framework will certainly contribute to the increased adoption of ODR platforms,” said Modi of Presolv360.
Digitising arbitration
Reforms pitched by a panel led by former law secretary T.K. Viswanathan in February proposed the digitization of the arbitration process.
“Virtual arbitration proceedings will help address logistical challenges and issues arising from physical hearings, while also reducing costs involved in travel and hospitality arrangements. These costs add to the overall costs of the arbitration. Introducing tools for document management and transcription will benefit all stakeholders, augmenting the ease in conduct of proceedings,” the committee said in its report.
“The committee is of the opinion that the infrastructure for seamlessly carrying out virtual hearings in a cost-effective, secure, and efficient manner is still not freely available in the market. Once such techno-legal utilities are widely available, necessary and cost-effective services will become more accessible,” the report added.
To be sure, the committee also said it was cognizant of the rise of ODR platforms and the inclusion of online mediation services ratified in the Mediation Act, 2023, but did not propose inclusion of ODR platforms in law.
The committee was of the opinion of that India should allow online arbitration and mediation before bringing ODR platforms under the aegis of codified law. Until then, India should avail technology such as video conferencing, AI-based document management, and cybersecurity measures, the committee said in its report.
Cybersecurity, however, remains a key concern in the online dispute resolution process.
Increasing volumes of online out-of-court resolutions indicate a rise in confidential information being exchanged digitally. ODR platforms, therefore, need a robust cybersecurity mechanism as the information disclosed during resolution may be proprietary.
