Effectiveness of Online Arbitration in the Present Era

By Shubhi Shukla


It is not a thumb rule that whenever two people meet and start doing something together it always results in something good, without any complications. But 90% of the time it is the other way round. Every time two or more people decide to do something or get involved in a transaction they are most likely to get into a conflict and to solve the conflict a reasonable man approaches the court. And this adds a burden to the court. Arbitration refers to the involvement of a third party to solve the conflict arising between two or more people so that the parties don’t have to approach the court and this would ultimately result in reducing the burden of the court. There are already 4.5 crore pending cases in India without arbitration; these numbers would be way too high.

What is Arbitration?

 Arbitration is a form of ADR that stands for Alternate Dispute Resolution. This concept refers to the process of solving disputes arising between people by helping them to agree to an acceptable solution. It also helps in saving their time and money for the sake of receiving justice. There are some important terms while dealing with cases of Arbitration

1. Arbitration clause

 This section determines the rights of the parties involved in the contract. It usually mentions that the parties involved in the contract will not directly approach the court in the first place, but will try to resolve the dispute by the means of arbitration.

 2. Arbitration tribunal

 It refers that the subject parties are given the power to decide the number of arbitrators involved in their case.

 3. Arbitration Award

 An arbitration award is the same as the damages provided by the court. The only difference is that an arbitration award is granted by the arbitrator and damages by the court of law. To make good for the laws, the arbitrator grants an arbitration award to the party. It can be a financial award or non-financial.

Online Arbitration

 Online Arbitration is the way of settling the dispute virtually. All the documents, arguments, evidence etc are submitted virtually via mails, instant messengers and telecommunications. Within the last few years due to the covid 19 situation, the system of court dispute resolution has thrived rapidly. Even after it, the relationship between arbitration and technology demands a lot of effort.


 Online dispute resolution can reduce the cost of settling the dispute and bringing justice. If worked properly it can be very efficient. This brings a great amount of flexibility in the procedure as per the convenience of the party which otherwise would have not been possible offline.


 Online settlement of disputes involves the interaction of people just in front of the screen. There stands no personal interaction between parties and the arbitrator and this ultimately results in a lack of trust. This online method is also prone to hackers attacks, lack of security and technical issues


 As this practice grew with time a question always arises whether the use of this method is valid within the legal framework. Various instances claim that online arbitration is not well regulated, but it is also true that every year N number of conflicts are settled by using this practice. As of now, there doesn’t exist any special legal framework to regulate this practice. Now we have just begun settling with this new normal and for now, we apply the same rules and regulations in online arbitration as we did in the traditional arbitration practices. Now we must come up with a separate legal framework to deal with this method of arbitration. We should also initiate some online arbitration procedures. Awareness must be spread among people regarding the effectiveness and working of online arbitration. People must trust this method of providing justice. Using the traditional principles of online arbitration an effective method of online arbitration can be established. People must be well educated and know how this practice works, so there is a need for some specialized institutions that can educate. train people regarding online arbitration.


 Itโ€™s been two years since Covid19 has set in and everything has turned virtual. It was very difficult at first to get settled with the new circumstances that included settling with the new technologies and now people have adjusted themselves to this new normal. Significantly, our traditional methods of solving conflicts switch to new ones. Justice must be provided no matter whatever the method is. Providing justice in a hurry without taking care of its effectiveness and efficiency is a denial of the justice provided. So now it is high time that we work on an online arbitration method, find all its drawbacks and work to improve them. The world is dynamic and we need to be flexible to deal with whatever comes in our way for now itโ€™s virtualism.

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