Introduction
Businesses are facing an increased risk of losses due to uncertainty and large-scale disruptions to workplace operations. One would like to believe and hope this phase is temporary, however no one has a sight yet on the finish line. When viewed from the lens of disputes, one expects a surge in disputes of a myriad nature, be it, contractual, employment, insurance, insolvency or consumer-related laws. Amidst, mounting losses and increased legal costs, Indian businesses are already exploring alternate dispute resolution mechanisms which are time and costeffective – essentially aimed at resolving a dispute rather than being involved in a contest marred with uncertainties. In this context the current crisis may indeed prove to be a catalyst for exploring new ways for innovative streamlining of new dispute resolution methods.
As per the National Judicial Data Grid, a total of 33.2 million and 4.5 million cases are pending in District Courts and High Courts respectively in India. Given the large-scale pendency of cases, adopting new ways of dispute resolution seems to be the best way forward. Present developments have shown us a glimpse of the potential of what lies ahead -Online Dispute Resolution (“ODR”) with the virtual judiciary, online mediation and online arbitration at the forefront.
Virtual judiciary: No looking back
With technology now becoming one of the plinths of practicing law, ODR is becoming the new normal. Due to the crisis, the functioning of the courts in India has been largely through Video Conferencing (“VC”) and e-mail facility. The Supreme Court of India (“SC”) via a suo-moto writ passed the guidelines for court functioning through VC and delegated the responsibility of making the detailed rules on separate jurisdictions to the High Courts. As a result, the High Courts have come up with their respective VC Rules. To analyze the efficacy of the VC system, the Gujarat High Court has recently published a Report on Working of the Courts through Video Conferencing. It reports that a total of 8138 matters have been filed through e-mail filing within a short time span of 3 months. Similarly, the Delhi High Court and subordinate courts have heard over 18000 cases via VC from the beginning of the lockdown till June 9, 2020. These numbers though at an initial stage, suggest a positive outlook on acceptance of a virtual judiciary.
Recently, for the first time in India, an e-Lok Adalat (People’s Court where disputes are settled amicably) has been organized for pending dispute and prelitigation matters in Chhattisgarh. Similarly, other states in India are also coming up with like measures by collaborating with ODR platforms where disputes are settled with the help of neutrals (mediators/arbitrators/conciliators) and case managers. Amidst the limited court functioning, ODR and e-Lok Adalat are playing the most important role in keeping the wheels of justice rolling in India.
This significant (and much needed shift) in the Indian dispute resolution space, has been the shift from the traditional bulky physical paperwork to a more streamlined approach by using virtual data and information. In a major development, the process of digitization of approximately 30 million pages of court files and upgrading of the existing leased lines from 34 Mbps to 1 Gbps in all district courts complexes of Delhi is currently on-going under Delhi High Court’s directions. The intention is to create a robust system of virtual courts which are much more effective and efficient in justice delivery especially in times of uncertainty. In future, similar directions from the other High Courts will add a much-needed impetus in making the virtual court a new normal in a true sense. This will no doubt lead to significant rethinking on the types of infrastructurerequirements for law practitioners and judiciary at large.
Online Dispute Resolution: Mediation and Arbitration as key players
An amicable settlement by way of mutual discussion has by far proved to be the fastest way of resolving a dispute. Mediation is an age old and well established mechanism. Due to its inherent advantages, the importance of mediation in the current times has increased manyfold. Several efforts have been made globally, to make mediation global, holistic, binding and enforceable.
In India, the Delhi High Court has recently launched its online mediation project to provide mediation service. Consequently, online mediation services can be availed for fresh court reference, prelitigation / conciliation and pre-institution mediation as required under the Commercial Courts Act, 2015. Justice D Y Chandrachud of SC has emphasized the role of the private sector in ODR Technology. He also suggested voluntary ODR by encouraging businesses to seek recourses to ODR Technology and creating incentives for the same. He stressed that the government should create a favorable eco system to make online mediation the most suitable way of ODR. Further, by creating platforms which are secure, user friendly and effective, online mediation can be one of the most preferred ways of ODR. Despite several measures taken by the government and the judiciary, arbitration in India, is increasingly becoming akin to litigation. Mediation, therefore is likely to be a viable alternative to arbitration and litigation in the future
The use of online platforms for conducting arbitration has also gained momentum. The Delhi High Court in a guidance note for conducting online arbitration under Delhi International Arbitration Centre Rules has provided that hearings can be conducted by way of VC. Interestingly, it also provided that a video clip of oral arguments be sent to arbitrators to ensure that lawyers do not indulge in repetitive arguments during VC hearing. For lawyers who do not have a VC facility, they can send the video clip of their arguments from their mobile via e-mail or Instant Messenger Application such as WhatsApp.
Issues and challenges in ODR
The biggest challenge in India is the cultural shift from the traditional way of settling disputes to ODR. For ODR to succeed, it is imperative to incentivize businesses opting for ODR, increase the role of private sector in dispute settlement and build long term and sustainable technology platforms to facilitate this – it will need a buy in from all 3 concerned stakeholders – judiciary, business and government. ODR can be employed for a major chunk of disputes arising out of online transactions more particularly, at the pre-litigation stage.
Another challenge is the lack of sufficient judicial infrastructure in place. The government should increase spending on building a robust judicial IT infrastructure. For wider acceptability of ODR, platforms have to be developed in such a way that services can be provided in many languages.
The Way Forward
India’s traditional long drawn and expensive dispute resolution systems have been a massive pain point for overseas investors. India’s gradual transformation to a technology driven, paperless and seamless dispute resolution format is a welcome relief to all – domestic industry and potential investors.
This transformation is certain, however, the pace at which it will happen depends on how well we accept technology as an integral part of the judicial infrastructure. The field of dispute resolution is likely to be further transformed by artificial intelligence and therefore, it is important that in designing ODR tools and procedures due consideration is given to integration of these technologies.
No doubt, the high-value disputes and emotionally complex matters will continue to require a combination of the online and offline systems. The promise of ODR, however, for a country like India, where the average disposal rate of cases is extremely low, is a silver lining on the dispute resolution horizon. Simultaneously, pre-litigation / conciliation will also emerge as a crucial mechanism for settling disputes in the future. With the digitization of courts and ODR, barriers towards a faster dispute settlement may well be reduced. The future of India’s dispute resolution looks promising with virtual judiciary, online mediation and online arbitration as preferred ways of dispute settlement. During this initial phase of development, a well thought out infrastructure will be crucial. Implementation of a robust ODR infrastructure promises to catalyze a welcome change and shape the future of India’s dispute resolution from the traditional methods to ODR in the coming decade. A large scale use of ODR technology also holds the potential to be combined with artificial intelligence tools. It is only a matter of time that technology can step in to check the large influx of cases in India and transform the way we settle disputes. Accordingly, the future of India’s dispute resolution looks promising, quicker, time and cost effective.
Ashish Prasad is Partner at Economic Laws Practice, Dispute Resolution and Litigation team. Rohit Sharma is Senior Associate at Economic Laws Practice, Dispute Resolution and Litigation team.