Online Dispute Resolution (ODR) is legal in India. The consent of both parties to resort to ODR is required. It can be done for all cases except where the law specifically prescribes physical appearance. Rules governing physical arbitration applies.
Online Dispute Resolution is great! It’s the next big thing. Oh, but wait, is it legal in our country? Do you also have this query? Don’t worry, we’ll put an end to your ordeal.
The Indian legal framework, through Section 89 of Code of Civil Procedure, 1908 promotes use of alternative dispute resolution between parties. Similarly, Order X Rule 1A confers powers on the court to direct the parties to a suit to choose any Alternative Dispute Resolution (ADR) method to settle its disputes. This can include ODR as well.
Let’s now look at some specifics. ODR follows the Information Technology Act 2000, as well as the Arbitration and Conciliation Act 1996. The first and foremost necessity for ODR is that the parties must unequivocally decide that they are going to resolve their disputes online. The Arbitration Act specifies that the parties are free to choose the place where the hearing would take place, which could be online as well.
There have been instances where the parties have decided upon arbitration through emails (Shakti Bhog Foods Ltd. V. Kola Shipping Ltd., (AIR 2009 SC 12); Trimex International FZE Ltd. v. Vedanta Aluminium Ltd. (2010) 3 SCC 1). In Grid Corporation of Orissa Ltd. vs. AES Corporation (2002) 7 SCC 736), the Supreme Court explicitly mentions 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”.
The IT Act enumerates that electronic records and signatures can be introduced as evidence and given legal recognition under the Indian legal system ( S. 4, 5 & 65-B). In State of Maharashtra vs. Dr. Praful B. Desai (2003 4 SCC 601), the Supreme Court acknowledged the use of video conferencing to record witness statements. Therefore, the submissions and the proceedings can take place online. For this, the International Chamber of Commerce has laid some guidelines which ought to be followed for uniformity. These include agreeing upon the time zone, format of documents and other paraphernalia.
Finally, when the award is declared, as per S.31 of Arbitration Act, it can be exchanged via emails by sending scanned copies. The original copy can be sent later via post. This completes the procedure and the only thing left is the enforcement of the award, a decree for which can be easily obtained in a court.(Source)
Therefore, the crux of the matter is that practicing ODR is perfectly valid in India. It is even being used currently by the National Internet Exchange of India (NIXI) for domain name dispute resolution. It is similar to traditional arbitration but the only difference is that it is conducted over the internet. Therefore, the law applicable to traditional arbitration is to be applicable to ODR also. Just as ADR is legal in India, so is ODR.