India is currently at the crossroads of a pivotal transformation, navigating from traditional dispute resolution mechanisms to a more streamlined, digital-first approach. Just as the widespread adoption of smartphones and affordable data plans has revolutionised the Indian consumer market, the prospect of online dispute resolution (ODR) promises to re-engineer the country’s dispute landscape, offering a more accessible and effective means of resolving conflicts.

The government, in an insightful move, has constituted an expert committee, under the guidance of former Law Secretary TK Vishwanathan, to examine the working of arbitration law in the country and recommend reforms to the Arbitration and Conciliation Act, 1996 (A&C Act). One of the most promising prospects of this endeavour lies in embracing ODR within the fold of arbitration and conciliation.

Firstly, it is important to demystify ODR. ODR transcends merely digitising traditional arbitration; hence, it is more than just proceedings via video conferencing. ODR leverages cutting-edge technologies like smart case management, digital communication infrastructure, artificial intelligence, machine learning, and blockchain to facilitate dispute resolution. It’s fascinating that India is one of the major economies which has realised the potential of ODR and has various ODR players.

Enhance trust

In this context, the explicit mention and promotion of ODR in the A&C Act will enhance trust and expedite its wider acceptance and use. Small-value disputes, which form a large chunk of the dispute pool, could benefit significantly from being directed to ODR platforms. This could significantly ease the burden on our courts while providing a more efficient and accessible resolution process for the parties involved. Listing and recognition of such ODR platforms alongside arbitral institutions can be a game-changer in defining India as an arbitration and ODR hub of the world. Besides, litigation arising on account of the unilateral appointment of arbitrators can be substantially dealt with through the referral of disputes to these platforms and institutions who, in turn, maintain a broad panel of experienced arbitrators. The dual objective of independence of the arbitrator as well as speedy disposal of disputes can be achieved.

Second, again in the context of small-value disputes, could be to promote document-driven fast-track proceedings as a default process. This approach strips away the requirement for physical presence or oral hearings, both elements that can extend timelines and inflate costs.

Thirdly, the tedious process of executing arbitral awards can be tackled by establishing specialised courts for expedited enforcement and simplifying the relevant procedures. Out-dated requirements like filing certified copies of awards can be dispensed with and replaced with technology-enabled certification of awards for authenticity purposes.

There is also a strong case for changes to the stamp duty regime in respect of underlying agreements and awards. It can be argued, especially in the case of small-value claims, that the cost of duty collection/adjudication often exceeds the actual stamp duty and in reality, leads to loss of revenue for the government. Besides, such an exemption could incentivise the settlement of disputes through arbitration and uphold its expediency.

One out-of-the-box suggestion could be the inclusion of an arbitration agreement review mechanism akin to the Authority for Advance Rulings (now Board for Advance Ruling) that pre-determines tax-related issues.

Finally, the arbitration framework should encourage public-private partnerships in promoting and operating ODR platforms. This approach would harness the strengths of both sectors while ensuring standards for areas such as confidentiality, impartiality, procedural fairness, and data security are met.

Shah is a Co-founder, and Kapoor works in the Policy Team, of Presolv360

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