ODR IN CONSUMER DISPUTES AND CHALLENGES INVOLVED

This article has been authored by Harshit Tyagi, a second year student at Symbiosis Law School, Nagpur.

Introduction

Online Dispute Resolution or ODR as the name suggests is the mode of resolution of disputes between parties through the use of technology and different types of alternate dispute resolution including mediation, arbitration and other online techniques. Online dispute resolution is an emerging technique to resolve disputes with the consent of both the parties of the suit which indeed is much needed assistance to the overburdened courts as the dispute between the parties is transferred to online mediation or arbitration and hence, the parties can enjoy speedy justice along with minimal costs and in lesser time.

Recognition of ODR in India

The Information Technology Act, 2000 along with the Arbitration and Conciliation Act, 1996, aid in the recognition of ODR, the arbitration act mentions that parties can decide the place of the dispute redressal and free to choose the place where they want the hearing to be conducted, a simple interpretation would be that the matters can also be addressed through an online mode in which IT act also plays its role in conducting the hearing in a hassle-free manner.

In India, the dispute redressal platform founds its origin in the Code of Civil Procedure, 1908 (“CPC”) specifically Section 89 of Code of Civil Procedure, 1908 authorises the use of alternative dispute resolution between parties. Also, Order X Rule 1A of CPC gives the powers in the hands of the court to instruct the parties to the suit to choose any Alternative Dispute Mechanism as per their convenience. The provision does not anywhere specifically mention the word ODR but it mentions any alternative dispute redressal mode which can interpretingly include ODR as well.

There are some instances when the parties opting a liberal point of view have decided the arbitration matters through the means of email in Shakti Bhog Foods Ltd. V. Kola Shipping Ltd. and Trimex International FZE Ltd. v. Vedanta Aluminium Ltd.

Also, In the matter of State of Maharashtra vs. Dr. Praful B. Desai , the Supreme Court agreed to proceed further with the proceedings in an online mode which also implies that the use of ODR can be used when it comes to redressal of the disputes.

In consumer disputes also mediation is proposed as an alternative dispute resolution. Chapter V of the Consumer Protection Act, 2019 provides for the establishment, at district, state and national level, of consumer mediation cells for the aim of enabling court-annexed mediation.

Advantages of ODR in Consumer Disputes

It is pertinent for us to look into the advantages of Online Dispute Resolution when it comes to consumer disputes redressal and how it works. ODR is not only limited to consumer disputes but also includes a wide array of disputes arising out of many legislations and provisions which can be settled through online mode. When we talk about consumer disputes, ODR not only governs binary consumer disputes but also covers various types of business models like C2C or B2C. It not only covers disputes arising within the national territory but also governs international conflicts and inter-State conflicts. It will not be wrong to say that technology is not only introducing new trends and luxuries but it can also help in the justice system.

Due to the over burdening of the courts, we sometimes see that the judges have to hear even 20 to 50 cases a day which is not ideal for efficient justice delivery and might explain why most people are unsatisfied even after the hearing of the Apex Court. This new system is definitely a boon for the justice system as this helps in online redressal of disputes between the parties without any hassle and without any wastage of time or money. The system is now an emerging area of redressal of disputes as it takes lesser time and it is more effective when it comes to listening to the parties and their grievances.

Firstly, the parties do not have to travel long distances to present themselves in the premises of the court. This is also advantageous when it comes to the international disputes where parties had to travel thousands of kilometers to attend court proceedings. Secondly, because of the online disputes resolution the parties get instant justice because of the arbitrator or mediator who hears both the parties and arrive at a decision sooner. Also, since parties can hear the cases from their respective homes, there is no need to rent a mediation center to hear the proceedings which ultimately leads to decreased costs on the parties.

Challenges and Issues in ODR When it Comes to Consumer Redressal

ODR has certain disadvantages, one of them being that the parties may be more comfortable in having a face-to-face interaction and it might facilitate in better understanding the position and grievances of the parties. “There is almost universal agreement that mediation is most effective if the parties to the dispute are physically present before the mediator.” Some parties may not have the wherewithal to participate in ODR. In a nation like India there is a lack of awareness when it comes to the technology and when it comes to seeking dispute resolution through an online mode, most people might not be confident about its effectiveness and might not want to move away from physical hearing.

Other disadvantages include deciding which matters can be submitted to online dispute resolution techniques. Another limitation is that not every dispute can be resolved online.

The other concern is the confidentiality or the privacy of the parties because there might be a breach or violation of the privacy of the individuals as such modes are more prone to hacking.

Also there are some cross-cultural issues such as language or behaviour because when a dispute is heard in physical mode then the mediator or the arbitrator always keeps in mind the language along with the ethical behaviour which should be maintained dealing with the parties and There may be disturbances because due to faulty internet connectivity or other disturbances in the surroundings. In India, not every citizen can access internet or an electronic device to attend the proceedings which might exclude certain classes of persons from securing justice using these methods.

These are some of the issues pertaining to consumer disputes and their redressal when it comes to the Online Dispute Resolution techniques. Undoubtedly, ODR is one of the fastest and the most effective method of seeking justice but lack of awareness and logistical shortfalls act as a hindrance in the success of this mechanism.

Shortfalls in the ODR Mechanism

The ODR mechanism does not have any central power or authority governing it or to keep a check on the workings. There are no established criteria for the selection of the arbitrator or mediator or the person carrying out the dispute resolution proceedings which may lead to disputes regarding the selection of the presiding officer and may lead to parties not adhering to the rules and regulations because they are not happy with the mediator or are not satisfied with the verdicts. For instance, the Companies (Mediation and Conciliation) Rules, 2016, under Rule 4, does not include institutions as qualified for empanelment. Similarly, Delhi High Court’s Mediation and Conciliation Rules, 2004 only recognizes persons and professionals.

Lastly, there is no specific organisation or a committee which shall be treating the professionals which are going to be the little person in the mediation or arbitration or negotiation. There is lack of training while deciding the mediator and the professionals are chosen upon either their past experiences according to their respective ages and the Seniority should not be the sole criterion for deciding the arbitrator or the dispute resolution professional.

In European nations, there is a sole committee which deals with the consumer disputes and provides free hand when it comes to ODR technique to deal with the consumer disputes. Another similar effort has been made in Mexico where the Office of the Federal Prosecutor for the Consumer, also referred to as the Federal Consumer Protection Agency (Profeco) is responsible for managing ‘Concilianet’, an online dispute resolution mechanism to address complaints of consumers against merchants of goods and services. Under this system, consumers can file complaints online or in person and the Agency will then carry out conciliation either telephonically or over the internet.

Other Judicial Pronouncements in Favour of ODR

In the matter of Grid Corporation of Orissa Ltd. v AES Corporation, the Supreme Court opined that if the parties are able to achieve effective consultation by resorting to 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. In State of Maharashtra v Praful Desai, the Supreme Court held that the virtual reality can be called as real reality and the use of technology is for the benefit of the society. Similarly in the matter of Grid Corporation of Orissa Ltd. vs. AES Corporation the Supreme Court held 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 law or of the ruling contract between the parties”