article (case study) -odr

8/7/2019 article (case study) -ODR

1/15

1

ONLINE DISPUTE RESOLUTION

A CASE STUDY BASED EXAMINATION UNDER INDIAN ARBITRATION LAW

- Devika Singh1

Abstract: ODR or online dispute resolution is increasingly a necessary face of ADR andnot a separate form. It is also not a new development.In this world of instant

communication, disputes require instant redressal which traditional modes of dispute

resolution are unable to proffer.In todays rapidly paced world of science and technology,

it is quite common to witness technological advances occurring so fast that the law is

hard pressed to keep up. A similar situation has arisen with ODR. The paper discusses,

on the basis of a case study, whether ODR can be fully embraced within the framework

of the Indian law on arbitration and if not, identifies potential obstacles and suggests

practical solutions. After reflection and it is ascertained that the majority of the issues canbe resolved merely by deeming a juridical seat or place for the virtual arbitration. Also,

ODR can be conducted in an impure form to accommodate present-day formal

requirements by rendering the awards in writing with the signature (or digital signatures)

of the arbitrators. Upon analysis, it is evident that only minor adjustments are needed for

Indian law to fully embrace ODR as a preferred mode of arbitration. There is already a

very positive trend towards embracing all facets of ODR in India and it is evident that

this trend will only strengthen with passing time.

A. INTRODUCTION

Today, the new buzzword in the arena of alternate dispute resolution or ADR is ODR

Online Dispute Resolution. Sometimes called a form of ADR, it may be more accurate

to say that ODR is increasingly a necessary face of ADR and not a separate form. ODR

is not a new development. It has been a matter of growing interest since 1997 when

Jasna Arsic wrote one of the seminal papers on international commercial arbitration on

the internet.2

As society become increasingly techno-savvy, jurisdictions and boundaries melt for trade

and commerce and people all around the world congress on the internet sans distance,

1Advocate, Bar Council of Delhi and Solicitor, England and Wales.

2 J. Arsic, International Commercial Arbitration on the Internet: Has the Future Come Too Early? (1997) 14 J. IntlArb. 209.

8/7/2019 article (case study) -ODR

2/15

2

such a development was bound to happen. In this world of instant communication,

disputes require instant redressal which traditional modes of dispute resolution are

unable to proffer.Traditional modes are also ill-equipped for cutting across strongly held

and honoured legal and jurisdictional boundaries. It has oft been commented that

cyberspace with its new array of technologically possible relationships and contractualfreedom is a challenge to international commercial arbitration.3

Despite the overwhelming concept of freedom that the internet promises, cyber

commerce has necessitated that the internet reengage and reaffirm the constant need for

control or what Lawrence Lessig4 famously termed regulability. In his seminal work, he

commented, The invisible hand of cyberspace is building an architecture that is quite the opposite of

what it was at cyberspaces birth. The invisible hand, through commerce, is constructing an architecture

that perfects control an architecture that makes possible highly efficient regulation.5

In a manner, ODR is merely a facet of that regulability and though not per se the

architecture that Lawrence Lessig envisaged, it does brush shoulders with the tools of

code. It is not a product of government or statute but of commerce.

In todays rapidly paced world of science and technology, it is quite common to witness

technological advances occurring so fast that the law is hard pressed to keep up. A

similar situation has arisen with ODR. The purpose of this paper is to discuss, on thebasis of a case study, whether technological innovations (or commercial innovations)

such as ODR can be fully embraced within the framework of the Indian law on

arbitration and if not, identify the loose threads that need tidying. This is particularly

useful for parties that wish to resolve their existing or future disputes through ODR

given its advantages over traditional dispute resolution such as litigation or even ADR in

terms of cost, efficiency and speed.

3 K. Lynch, The Forces of Economic Globalization: Challenges to the Regime of International Commercial Arbitration(The Hague: Kluwer Law International, 2003) at 345.4 A fellow at the Wissenschaftskolleg zu Berlin 1999-2000, was previously a professor at the Harvard LawSchool and a fellow at the Berkman Centre for Internet and Society.5 Lawrence Lessig, Code and other Laws of Cyberspace, 1999 Ed., Basic Books.

8/7/2019 article (case study) -ODR

3/15

3

B. ONLINE OR OFFLINE DISPUTES DEFINING ODR

At times, the best strategy towards understanding is one of exclusion. Hence, as a

starting point it is necessary to draw out the scope of this paper by clarifying to what isand is not included in the definition of ODR.

Often, in traditional dispute resolution, arbitrators may accept their roles through an

exchange of emails, or may, during the course of arbitration, conduct proceedings by

electronic means in online settings. Video-conferencing has become quite common and

several international arbitrators prefer to email awards for the sake of convenience and

cost. It is best to clarify at the initial juncture that any isolated online processes and

procedures applied in the course of traditional arbitration is not included within theambit of ODR for the purpose of this paper.

Pedagogically, online dispute resolution has developed two avatars. The first is online

dispute resolution for online disputes and the second is online dispute resolution for

offline disputes. In the first avatar, the source of the dispute may be an electronic

contract drawn between parties engaging in cyber commerce, wherein the parties decide

to resolve the disputethrough the systematic and continued use of online techniques or

submit it for resolution to an online forum.In the second avatar, the source of the dispute is offline i.e., a corporeal written contract,

drawn by parties outside the cyber world, wherein the parties decide to resolve their

disputes through the systematic and continued use of online techniques or submit the

dispute to an online forum for resolution.

Despite different sources, both avatars culminate at a singular form or forum which is

online. For the purpose of this paper, both avatars fall within the scope ofODR. Hence,

this paper proceeds on this broad definition of ODR.

Regardless of the virtual nature of ODR, the fact of the matter is that eventually the

parties need to interact with the real world. Such interaction may or may not arise at an

injunctive stage but it would definitely apply at the enforcement stage. Through the

following case study, this paper will examine the acceptance of ODR under Indian law.

8/7/2019 article (case study) -ODR

4/15

4

C. ODR IN CONTEXT A CASE STUDY

An Indian company - Inditech purchases a bulk order of books from an online

sitewww.booksandmore.com hosted by a French company Francotech. Thepurchase is done online through the websites payment portal which is hosted on a

separate server in Hong Kong. During the course of the purchase, Inditech checks a

box on the main payment page that indicates that by checking this box it agrees to accept

all the terms and conditions of purchase. Upon delivery in India, Inditech decides that

the order is not as per its requirements. It therefore takes action on Francot echs

payment portal as a result of which it is able to withhold fifty percent of the payment due

to Francotech. Francotech raises a claim against Inditech and Inditech raises a counter

claim against Francotech. The websites terms and conditions state that all disputes willbe settled by arbitration by a sole arbitrator at www.virtualarbitration.com . This

website is hosted by a server in England.An online arbitration award is rendered in

favour of Francotech and transmitted to the parties through email (Virtual Award).

Francotech initiates enforcement proceedings against Inditech in the Delhi High Court.

D. EXAMINATION

The law relating to domestic arbitration, international commercial arbitration6

andenforcement of foreign arbitral awards in India is the Arbitration and Conciliation Act,

1996 (1996 Act). Hence, in order to be enforced, the Virtual Award will need to satisfy

the requirements and conditions of the 1996 Act.

The 1996 Act has two parts relevant for the purposes of this examination7. Part I is

stated to apply where the place of arbitration is in India. This provision has been the

subject of relatively recent controversy in the Supreme Court of India (SC). In Bhatia

International v. Bulk Trading8

, the SC had held that in the absence of the word only insection 2(2) of the 1996 Act, Part I will apply to arbitrations held outside India as long as

Indian law governed the contract. The SC concluded that Part I will apply to all

6 Those arbitrations where at least one part is a foreign national is referred to as an internationalcommercial arbitration.7 Part I is entitled Arbitration and consists of 10 chapters containing sections 2 to 43. Part II pertains toEnforcement of foreign awards and Part III deals with Conciliation.8 (2002) 4 SCC 105.

8/7/2019 article (case study) -ODR

5/15

5

arbitrations where the seat of arbitration is outside India, unless the parties agree to

exclude provisions of Part I. This view was again reiterated by the SC in Venture Global

Engineering v. Satyam Computer Services9. Both these judgments have garnered much

criticism which the Law Commission of India (LCI) has, in a recent consultation

paper, attempted to put to rest by the recommendation that section 2(2) be amended toclarify that Part I would apply only where the place of arbitration is India. Hence, there

would be no application in international commercial arbitrations where the place of

arbitration is outside India.

In the case study, the place of arbitration is in virtual reality. It cannot be clothed in any

jurisdictional garb. Therefore, the already existing ambiguity on the application of Part I

in traditional arbitration is accentuated in this case. With an online dispute resolution

mechanism, it is difficult to identify the actual seat of arbitration. The parties are fromIndia and France, the payment portal is hosted in Hong Kong and the virtual arbitration

website is hosted in England. The place of arbitration would clearly have shifted various

jurisdictions during the arbitration proceedings. Inditech and Francotech may have also

involuntarily chosen a seat of arbitration that is deemed in the terms and conditions of

the www.virtualarbitration.com. However, it is an acceptable assumption that the place

of arbitration cannot be India.

Yet, in the presence of precedent and the absence of clarity, the first challenge of ODRin India is clear identification of the place or seat of arbitration. Parties wishing to submit

their disputes to ODR should ascertain that the place of arbitration is deemed to be a

specific jurisdiction either by the rules governing the online institution to which they

submit their dispute or, in case of an adhoc arbitration, by agreement of the parties

themselves. This would go a long way in ensuring the success of ODR.

Merely for the sake of furtherance of this paper, it is being assumed that Part I of the

1996 Act does not apply in the instant case as the place of arbitration is not India. TheVirtual Award is therefore a foreign award10 to which Part II of the 1996 Act would

9 (2008) 4 SCC 190.10 Section 44, 1996 Act, Definition.- In this Chapter, unless the context otherwise requires, foreignaward means an arbitral award on differences between persons arising out of legal relationships, whethercontractual or not, considered as commercial under the law in force in India, made on or after the 11thday of October, 1960- (a) in pursuance of an agreement in writing for arbitration to which theConvention set forth in the First Schedule applies, and (b) in one of such territories as the Central

8/7/2019 article (case study) -ODR

6/15

6

apply. Under Part II, the legitimacy of the Virtual Award would be questioned on three

fronts in court. First the validity of the arbitration agreement between Inditech and

Francotech; second the procedural integrity of the arbitrator and the arbitration at

www.virtualarbitration.com; and third the completeness and finality of the arbitration

award from the purview of enforcement.

D.1 VALIDITY OF THE ARBITRATION AGREEMENT

The most often quoted challenge of ODR is the traditional in writing

requirement. Today, arbitration agreements are increasingly being concluded

through the means of electronic transmission instead of the traditional paper and

pen with the participating parties signatures. Yet, the single most important

document that is the basis of international commercial arbitration theConvention on the Recognition and Enforcement of Foreign Arbitral Awards

(NYC) was written and adopted well before the age of the internet. Under

Indian law, Section 44 of the 1996 Act requires that a foreign award should be in

pursuance of an agreement in writing for arbitration to which the NYCapplies.

Not only does Section 44 itself refer to an agreement in writing but so does the

NYC at Article II11. Both the 1996 Act and the NYC are representative of a

general practice. Article 7 (2) of the UNCITRAL Model law also indicates that

the arbitration agreement will be in writing. Even the national arbitration law ofone of the parties of the case study, Francotech, provides that, to be valid, an

arbitration clause shall be in writing and included in the contract or in the

document to which it refers.12

The central question is when Inditech and Francotech entered into an agreement

of arbitration in the manner demonstrated in the case study did the exchange

Government, being satisfied that reciprocal provisions have been made may, by notification in theOfficial Gazette, declare to be territories to which the said Convention applies.11 Article II, NYC 1.Each Contracting State shall recognise an agreement in writing under which theparties undertaking to submit to arbitration all orany differences which have arisen or which may arisebetween them in respect of defined legal relationship, whether contractual or not, concerning a subject-matter capable of settlement by arbitration.2. The term agreement in writing shall include an arbitralclause in a contract or an arbitration agreement, signed by the parties or contained in an exchange ofletters or telegrams.12 Article 1443 of the French Code of Civil Procedure.

8/7/2019 article (case study) -ODR

7/15

7

satisfy the core requirements of the NYC and the 1996 Act? Prima facie, the

answer is in the negative, simply because it was not in writing.

However, before and consequent to the development of several laws governing

e-commerce, several judicial pronouncements the world over have addressed theparadox that there is no place in major d ocuments of international arbitration for

the currently most popular means of data transmission. As a result of this it has

been convincingly argued and accepted that an exchange of email messages

containing an arbitration clause satisfies the formal requirements of Article II (2)

of the NYC, because an exchange of emails can be equated to an exchange of

telegrams13.

Still, on the face of it, Inditech merely checked a box indicating its assent to theterms and conditions of Francotechs website. Nor was there a signature put to a

contract and neither was there an exchange of letters or telegrams or emails. In

this case, the validity of the arbitration agreement can be based on the functional

similarity in the transmission of data that occurred when the box was checked

which can be likened to an exchange of emails14. The functional equivalent

approach was propounded in the UNCITRAL Model Law on E-commerce15

and is based on how electronic techniques can be compared and utilised as the

functional equivalents of traditional paper-based requirements.

When the offer contained in the Francotech website was viewed by Inditech, the

bits comprising the offer, originally stored on the website server, were

transmitted through a network to Inditechs computer. When Inditech accepted

the offer by checking the box, the bit stream comprising the offer and resident in

Inditechs computer was modified by Inditech and then that modified version

13 Supra Note 1 at 216. See also R. Hill, On-line Arbitration: Issues and Solutions, (1999) 15 Arb. Intl.199, available also online: 14 See R. Hill at Note 12.15UNCITRAL Model Law on Electronic Commerce with Guide to Enactment . See also Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 oncertain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive onelectronic commerce), published in Official Journal of the European Communities dated 17.7.2000, L178/1 http://europa.eu.int/eur-lex/pri/en/oj/dat/2000/l_178/l_17820000717en00010016.pdf whichrequires member states to do away with formal obstacles in electronic contracting..

8/7/2019 article (case study) -ODR

8/15

8

was transmitted back to Francotechs website server. Thus there took place an

exchange of data or electronic transmissions which is comparable to the

exchange of documents envisaged both under the NYC and the 1996 Act.

Consequently, it can be concluded that a valid arbitration agreement was entered

into.

Indian law has accepted such similarities and thus the validity of such

transactions through enactment of the Information Technology Act, 2000 (IT

Act.The IT Act has enacted to facilitate and encourage e-commerce by

recognizing electronic records and digital signatures. Section 4 of the IT Act

states that a requirement of any law for information or matter to be in written,

printed or typewritten form shall be deemed to have been satisfied if such

information or matter is rendered or made available in an electronic form and isaccessible so as to be re-usable for a subsequent reference. Section 4 of the IT

Act recognizes digital signatures and provides that the requirement of any law for

authentication by a persons signature shall be deemed to have been satisfied if

such authentication is done by means of a digital signature.

Having said that, even in the best of cases, agreements entered in certain online

settings are open to questioning. Several concerns have always been associated

with the quality of a parties consent given online. In the context of arbitrationagreements, valid consent has always been of fundamental importance and this

has lead to the emphasis on the in-writing requirement. Formalities such as

writing and signature are based on the need for some physical evidence or

authentication from the person who has given up his right to litigate in national

courts. Written evidence is regarded as essential to ascertain such an intention16.

When a single click of the mouse suffices as acceptance of an arbitration clause,

the law views it with a lack of trust as to whether such a minor act is a reflectionof a partys fully informed consent. The problem is exacerbated, when the

arbitration clause is tucked away in a range of general terms and conditions.

16 H. Yu & M. Nasir, Can Online Arbitration Exist Within the Traditional Arbitration Framework? (2003) 20J. Intl Arb. 455 at 458.

8/7/2019 article (case study) -ODR

9/15

9

Parties resorting to ODR or forums offering ODR can overcome such issues of

trust by the presence of a clear and conspicuous reference to an arbitration

clause. Along with this, the website can even offer to automatically save a copy of

the agreement on the computer of the acceptor. This would be a sufficient record

of the agreement.Such practical steps would greatly assist the courts in India,which have already indicated a very positive outlook towards electronic

techniques supplanting and supplementing traditional normsas has been

elaborated on in the following passages, in upholding ODR.

D.2 PROCEDURAL INTEGRITY

Issues of procedural integrity arise on two counts in ODR. The first is on usage

of electronic/cyber techniques in the course of arbitral proceedings.

In the case study, all arbitral proceedings were conducted online and hence

through such techniques. Transmission of notice of arbitration, notice of

appointment of arbitrator, exchange of documents, counters and rejoinders,

admission of evidence and other similar acts occurred in electronic form through

instantaneous transmission over the internet. In the absence of physical meetings

between the arbitrator, Inditech and Francotech, diverse electronic exchanges17

like virtual conferencing would have simulated and fulfilled traditional needs ofan arbitration.

In India, the e-justice system has been quite robust and there is an increasing

judicial recognition of information technology and electronic techniques

supplanting traditional legal requirements. For example, in 1999, the SC

construed the words notice in writing in section 138 of the Negotiable

Instruments Act to also include a notice by fax18. It requires not great stretch of

imagination to extend this construction to include notice by email also. In 2003,in the case of State of Maharashtra v Dr. Praful B Desai19, the SC recognized

evidence by way of electronic records and also recording and production of

17 O. Cachard, International Commercial Arbitration: Electronic Arbitration (New York: United NationsConference on Trade and Development, 2003),18M/s SIL Import,USA v M/s Exim Aides Silk Exporter, AIR 1999 SC 1609.19 2003 (3) SCALE 554.

8/7/2019 article (case study) -ODR

10/15

10

evidence by way of video-conferencing. A similar view on video-conferencing vis

a visphysical presence had been taken by the SC in the case ofBasavaraj R Patil v

State of Karnataka20 also.

Such judgments, though not directly in the context of ODR, evidence thewillingness of Indian courts to embrace technological advances. It would not be

averse to say that just like the encouragement given to ADR by Indian courts,

ODR too would be encouraged.

Despite such positive judgments, the question that still remains is whether such

techniques have any negative impact on the procedural integrity of arbitration in

the eyes of the law. The answer lies in two words party autonomy 21. The

principle of party autonomy or procedural autonomy is a fundamental principle

of arbitration law and is globally recognized and adhered to. In 2002, the SC hadruled favourably for technology and party autonomy and observed in context of

an offline arbitration that when an effective consultation can be achieved by resort to

electronic media and remote conferencing, it is not necessary that the two persons required to act

in consultation with each other must necessarily sit together at one place unless it is the

requirement of the law or of the ruling contract between the parties.22

It is recognized under the 1996 Act in section 19(2) which states that parties are

free to agree on the procedure to be followed by the arbitral tribunal inconducting its proceedings. In India, party autonomy is subjected only to two

caveats that the parties are treated with equality and that each party is given a

full opportunity to present its case 23. Hence, it can be concluded that as long as

the two caveats are satisfied, it is possible to adapt the entire procedure to the

virtual world under Indian law.

However, as can be seen even in Indian law, party autonomy cannot prevail over

or undermine the mandatory provisions of the law that governs the arbitration

20 (2000) 8 SCC 74021 J. Hrnle, Online Dispute Resolution: More than the Emperors New Clothes in E. Katsh & D.Choi, eds., Online Dispute Resolution (ODR): Technology as the Fourth Party. Papers and Proceedings of the 2003UnitedNations Forum on ODR (2003) , ; See also supraNote 15 at 465.22Grid Corporation of Orissa Ltd. v AES Corporation, 2002 AIR (SC) 3435.23 Section 18, 1996 Act.

8/7/2019 article (case study) -ODR

11/15

11

procedure. Hence, identifying the law that governs the arbitration procedure of a

virtual arbitration gains importance.

As discussed above, in the case study, the seat or place of arbitration is virtual

and not physical. Consequently, the country whose law would govern the virtualarbitration proceedings is unidentifiable. While the final solution to this problem

is delocalization of arbitration, the current framework of international

commercial arbitration makes delocalization very difficult and impractical.

International commercial arbitration is by definition a cross border activity and

every state is highly protective of its borders.

In such a situation, to maintain equity and fair mindedness, the virtual arbitration

proceedings would have to satisfy mandatory procedural elements of French,Indian, Cantonese and English law since all four jurisdictions are involved in the

problem! This is hardly reasonable or efficient. Moreover, the Delhi High Court

would be hard pressed during enforcement and in all likelihood the burden of

satisfaction would be too great for the award to be successfully enforced.

Again, such problems in ODR can be overcome by deeming, at the outset, the

seat or place of arbitration. The law of the place would automatically govern the

arbitration procedure thus providing certainty and finiteness. In case the partieswish to have a different law of procedure from the seat, this can be specified in

the arbitration agreement. There is a well established trend to support such

choices even in traditional arbitration and in ODR making such a choice may be

more of a necessity than a convenience.

While the above suggested device is suitable in an adhoc virtual arbitration, an

institutional arbitration presents its own set of complexities. If parties agree on

institutional arbitrational, the institutions rules would prevail and may conflictwith the parties intent to conduct arbitration online. In such a case, lawyers

would need to advice their clients to explicitly agree, in the arbitration agreement

itself, to override any institutional rules that may conflict with their desire to

conduct an online arbitration. Gradually, as ODR causes more and more

8/7/2019 article (case study) -ODR

12/15

12

arbitration institutions to reword their rules to accommodate online proceedings,

such conflicts are bound to disappear 24.

On the second count, issues of procedural integrity arise in the context of the

virtual award. The central question here is whether law supports an arbitral awardin its virtual form or does it require that it in writing or signed or rendered in any

other specified manner?

The NYC itself does not state that an arbitral award needs to be in writing or

signed. However, Part I of the 1996 Act requires that an arbitral award be in

writing and be signed by all the arbitrators under section 31. Once the arbitral

award is made, the provision also requires that a signed copy be delivered to

every party. Clearly, in the case of domestic arbitration (to which Part I applies),the desire to conduct a pure ODR would be defeated at this stage by the limited

provisions of the 1996 Act. While sections 4 and 5 of the IT Act may well be the

solution, in the absence of any case laws on this issue, it may be prudent to be

conservative. Hence, at least in Indian domestic arbitrations it would be better

for arbitrators of ODR forums to comply with the requirements of section 31

when rendering an arbitral award.

The case study however relates to Part II of the 1996 Act. Part II in turn refers tothe NYC which, as clarified above, has no provisions regulating the form or

content of an arbitral award. However, Article IV of the NYC refers to the

production of a duly authenticated original award by the party seeking

recognition or enforcement of the award. Consequently, section 47 of the 1996

Act also states that,

The party applying for the enforcement of a foreign award shall, at the

time of the application, produce before the court -(a) the original award or a copy thereof, duly authenticated in the manner

required by the law of the country in which it was made;

(b) the original agreement for arbitration or a duly certified copy thereof;

and

24 M. Schellekens, Online Arbitration and E-commerce(2002) 9 Electronic Communication Law Review 113.

8/7/2019 article (case study) -ODR

13/15

13

(c) such evidence as may be necessary to prove that the award is a foreign

award.

In the case study, arbitration has taken place online on the website

www.virtualarbitration.com. The arbitral award has been transmitted to both theparties by email. There is no such thing as an original or copies of the Virtual

Award since it is an electronic file and electronic files are infinitely reproducible.

So how will ODR overcome this obstacle?

Clearly, the requirement of an original or a duly authenticated copy under both

the NYC and the 1996 Act is as a measure of the veracity and security of the

arbitral award and is a method of confirmation not only of the contents of th e

arbitral award but also the identity of the arbitrators rendering it. Following theprinciple of functional equivalence, such objectives can be achieved in ODR by

requiring arbitrators to apply their digital signatures to the awards. A flexible

interpretation of the NYC and of the 1996 Act would surely include such secure

electronic documents to be the functional equivalent of the original. Legal

trends on electronic commerce would undoubtedly aid such positive

interpretations by Indian courts. However, practical problems of guaranteeing

integrity and attribution to the arbitrators would remain when submitting

electronic awards as paper documents with the registry. Similar issues would alsoarise for fulfilling the requirement of submitting the original agreement of

arbitration.

Even obtaining a duly authenticated copy of the Virtual Award would prove to

be a problem. Firstly because, there are limited authentication services in India

that can authenticate a digital signature and secondly because the authentication is

to happen in a manner required by the law of the country in which the award is

made and as we have already ascertained, the Virtual Award has no situs. In suchan event, which countrys law would apply for the purposes of authentication is

an unresolved grey area not only in the law but also in our case study. This once

again emphasizes the importance of deeming a place or seat for the ODR.

Even more so when the third requirement of section 47 is the submission of

evidence that proves that the Virtual Award is a foreign award. Usually when the

8/7/2019 article (case study) -ODR

14/15

14

arbitral award states that it is made in a place other than India, such evidence is

sufficient to satisfy this requirement.

D.3 COMPLETENESS AND FINALITY OF THE VIRTUAL AWARD

Eventually, as is the case in most ODR, the Virtual Award of the case study

passes the cyber realm and is put to test in the physical world of the Delhi High

Court for enforcement. This is an inevitability of ODR and the sole reason why

delocalization is unable to succeed in the territorial world. Though Inditech and

Francotech or www.virtualarbitration.com may achieve delocalization in ODR to

a limited extent by deeming the seat of the virtual arbitration, this is not in

effect delocalization but merely a manner of re-establishing a form of territoriality

over the Virtual Award.

Notwithstanding theory, practically, the necessity for deeming a juridical seat

for the arbitration is once again evident from Article V(1)(d) of the NYC which

specifies the grounds on which enforcement of an award may be refused, one of

the grounds being if the arbitral procedure was not in accordance with the agreement of the

parties, or, failing such agreement, was not in accordance with the law of the country where the

arbitration took place. This ground is replicated in the 1996 Act at section 48(1)(a).

Similar issues are reagitated by section 48 (1)(d) and (e) which state (d) thecomposition of the arbitral authority or the arbitral procedure was not in accordance with the

agreement of the parties, or,failing such agreement, was not in accordance with the law of the

country where the arbitration took place ; or(e) the award has not yet become binding on the

parties, or has been set aside or suspended by a competent authority of thecountry in which, or

under the law of which, that award was made.

E. CONCLUSION

There is no doubt that ODR shall succeed for the same reasons that e -commerce has. It

is convenient, cost effective and fast. It also ensures flexibility and freedom to the parties

and the arbitrators. However like e-commerce, ODR too is marked by the same pitfalls

predominantly, conservativeness to change and a marked lack of trust by law and society.

Also, just like e-commerce, ODR cannot be completely free of the tactile world and it is

8/7/2019 article (case study) -ODR

15/15

15

the lack of clarity on its integration with traditional mores that has seeded the doubts

slowing its permeation and usage.

It has been the endeavour of this paper to show the potential obstacles that may arise

when pursuing dispute resolution through ODR. The majority of the issues can beresolved merely by deeming a juridical seat or place for the virtual arbitration. Also,

ODR can be conducted in a impure form to accommodate present-day formal

requirements by rendering the awards in writing with the signature (or digital signatures)

of the arbitrators.

Upon analysis, it is evident that only minor adjustments are needed for Indian law to

fully embrace ODR as a preferred mode of arbitration. There is already a very positive

trend towards embracing all facets of ODR in India and it is evident that this trend willonly strengthen with passing time.

****