Alternative Dispute Resolution

Online Dispute Resolution in E-Commerce

By Manvee

Introduction

Covid-19 Pandemic has changed the lives of people worldwide be it on a personal level or a professional level, with the lockdown restrictions across the globe, everything went online be it schools, colleges, Corporate Offices, or Commercial Activities. It won’t be wrong to say that the ongoing pandemic led to the advent of E-Commerce worldwide because everything went online. Everything has its pros and cons so have the e-commerce entities too. According to a report published by UNCTAD, the Covid19 pandemic increased the online retail sales from 16% to 19% in the year 2020, meanwhile, the global e-commerce sales saw a jump of $26.7 trillion in the year 2019 which was 4% more from 2018 as per the latest available estimates. So, it is evident from these data that in the last 2-3 years, E-Commerce saw a boom worldwide and pandemic acted as an added advantage for E-Commerce entities. Here we are talking about E-Commerce but the main questions arise in the mind of most people that what does e-commerce mean? What all are included in e-commerce? In a simply, we can say that Commercial Transactions which are done online are E-Commerce, Let’s suppose I am booking a ticket for watching a movie via Paytm; this is a form of E-Commerce or I am buying a Dress on Amazon or Flipkart; this is also a form of E-Commerce. Coming to the topic of our Blog i.e., Online Dispute Resolution in E-Commerce, it means that resolving disputes via Mediation, Arbitration, or Negotiation but in Online mode. Basically, Online Dispute Resolution is a new concept of Alternative Dispute Resolution which is online in Nature, as covid 19 pandemic made us work in an online mode so its high time to consider this mode of Alternative Dispute resolution as it will save time, money, and energy of the parties involved in the dispute.

Concept of Online Dispute Resolution (ODR)

As I mentioned earlier, the foundation of ODR lies in Alternate Dispute Resolution (ADR) mechanisms i.e., Mediation, Arbitration, Negotiation & Conciliation. The only thing which is different in ODR as compared to ADR is the use of Technology for resolving the disputes between the parties. ODR is still in a budding stage worldwide but it carries immense potential to resolve disputes in a short number of times with the least infrastructure and will act as a time saver for commercial entities as well as the consumers. Presently, ODR uses basic technology such as e-mails, SMS, video conferencing as a tool for conducting the proceedings which makes it convenient for the parties to attend the proceeding without their physical presence as this will save their time and money.

Let’s understand this concept with an Illustration: Legally Sorted Pvt. Ltd. is an Indian Company which sells online courses for Law Practitioners globally, it has entered into a dispute with one of its consumers and the consumer is from another country and both of them decided to opt for Online Dispute Resolution as a mechanism to resolve their dispute and they opted for Online Arbitration which is one of the ODR mechanism. So here since the parties are entering into online arbitration, they will discuss & decide the choice of law via e-mail and then enter into an online arbitration agreement digitally signed by them and after that they will decide the geographical location of the server via which arbitration will take place online and also have to determine the place of signing the award by arbitrator. So, in this manner, the Online Dispute Resolution mechanism works.

ODR & Future of E-Commerce

Another important question that arises here is that What is the future of Online Dispute Resolution in E-Commerce Dispute Redressal? The answer lies in the present situation itself, we all are well aware of the fact that the Ongoing pandemic has forced everyone to recognize the limitations of the traditional dispute resolution methodology and to work on alternative methods. We have already seen that physical Courtrooms were shut down completely for months and some for a year too during the lockdown imposed by the government. Most of the Courts including the Supreme Court of India went Online for urgent hearings, so it’s a positive sign for us that Online Dispute Resolution is the way forward for resolving the pending cases in our country in a fast and effective manner which will decrease the burden of the Judiciary. Coming to the commercial part of resolving disputes, ODR can help the e-commerce entities to create a platform to identify consumer grievances and resolve them at the earliest. Recently, Snapdeal has taken this initiative in India by collaborating with SAMA for resolving the disputes of the consumers and to an extent, Snapdeal has succeeded in doing the same. In its pilot project, Snapdeal & SAMA settled 100 cases with an overall success rate of 50%. The pilot program was called “Sama Suljhao Manch” where they managed to close some disputes within 15 days which would ordinarily take 2-3 years to resolve.

Moreover, Snapdeal’s General Counsel Smriti Subramanian said “We, like most of the e-commerce companies, have a steady stream of high volume litigations, as we call it, where you have disputes around smaller transactions,” she also added “Most of the disputes that we have are actually district forum cases and typically, we realized, that a consumer dispute takes about one to two years. We also realized that there is not much of a legal principle that these forums are really applying, it essentially is the most fact-based investigation and their own adjudication on facts

After the collaboration of Snapdeal & SAMA, SAMA’s Co-Founder Pranjal Sinha gave a statement in favor of having a customer-centric approach in ODR “It’s like telling them (customers) that this dispute has been pending for almost 12 months to 16 months. Let’s try to solve it amicably and let’s try to do it online so you don’t have to come anywhere even booking in Uber to a consumer forum for a pen drive dispute which is worth Rs 600 rupees is not worth it,

So, it is evident from the above statements that ODR has successfully resolved the disputes on the pilot basis, and Snapdeal has become the 1st E-Commerce platform of India to use the ODR mechanism to resolve the disputes by setting an example for other E-Commerce Platforms to adopt the ODR mechanism in coming years. However, to give a boost to ODR in India, the Judiciary & Government should come forward and take the lead by adopting ODR for Government Litigation which will increase the faith of the public in the ODR mechanism.

Conclusion

As the government plans to create a safe and secure e-commerce market in India, henceforth there should be leverage in the use of Information & Communication Technology to make consumer grievance redressal cost-effective, efficient, and more accessible as Information & Communication Technology will enable easy compliance of the rules. ODR can help out the E-Commerce companies to create a platform where the grievances of the Consumer and the resolution for the same can be done at an earlier stage. In the present era, ODR mechanisms and platforms are considered to be the most preferred way to resolve commercial disputes, especially for e-commerce platforms. So according to me, since there is no dedicated legal framework and institutions with expertise in the field hence the government should consider establishing an ODR platform for e-commerce companies in India and these platforms could be designed on the same lines as European ODR platforms under which, in the European Union all the E-Commerce Companies are required to provide a link to the platform of the website which is easily available. The Consumers are offered an option to resolve their grievances on that platform directly against the seller or they can file a complaint with ODR bodies listed on that platform and in case, parties fail to settle their dispute through ODR, the consumers are guided to go before the traditional dispute resolution bodies to obtain relief. If this mechanism is implemented in near future in India then it is sure that the pendency of commercial cases will decrease to a great extent from the judiciary and the judiciary can focus more on the important issues of the country.

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