Adr Final
Adr Final
UNIVERSITY, LUCKNOW
SESSION 2020-21
FINAL DRAFT
ON
DEVELOPING A UNIFORM SET OF RULES FOR GOVERNING
OADR
I owe a great many thanks to a great many people who helped and supported me during the
completion of this project.
My deepest thanks to Professor Mr. Prasenjit Kundu the guide of the project for guiding and
correcting various documents of mine with attention and care. He has taken pain to go through
the project and make necessary correction as and when needed.
I would like to thank Dr. Ram Manohar Lohiya National Law University for giving me this
opportunity to work on this project. .
Lastly, I thank my friends for their support, for their help in collecting the material and for
critically going through the project and correcting the mistakes, without whom the project would
have been a distant reality.
I also extend my heartfelt thanks to my family for supporting and guiding me.
INTRODUCTION
While determining the substantive set of dynamic rules for the e-business
community, it is imperative to mention that the parties in a global community are
free to select a national law for deciding their rights and obligations under an e-
commerce contract1. This implies that, as the primary initiative is in the hands of
the parties themselves, negotiations may be initiated depending on the situation,
circumstances and negotiation. If such negotiation fails, then from the terms and
conditions of the contract itself, the parties can subject themselves to the
Alternative Dispute Resolution Mechanism (“ADR”)2. The practice, which has
been accepted by the international community by and large, i.e., the applicability
of the national laws by the arbitrators in the absence of the choice of law being
mentioned by the parties, is in pursuance of the conflict of laws method.
A dilemma arises in the modern day world with respect to the application of rules
and laws in the resolution of disputes by online arbitration tribunals. Currently in
the formative stages, there is an urgent need for development of flexible,
transnational legal standards that can be applied by arbitration tribunals in cross-
border e-business disputes. This approach is desirable and convenient from the
consumer’s perspective, as he/she may be located in a jurisdiction different from
that of the seller. The main advantage of the approach necessitating the application
of OADR in e-commerce is that, it not only manifests the dynamic nature of the
system, but also facilitates confidence in the Business to Consumer Model (“B2C”)
and the Business to Business Model (“B2B”) which is in the interest of the global
business community.
1 Bekker C., The Proper Legal Regime for Cyberspace, 55 U PIT L R 993 (2012)
2 K.P.Berger, Law and Borders - The Rise of Law in Cyberspace , 48 STANFORD L R 1367 (2008)
PROMISING FUTURE OF LEX INFORMATICA PRINCIPLE:
PRECEDENTS SETTING THE PATHWAY FOR FUTURE
5 V. J. J. M. BEKKERS & SJAAK NOUWT, EMERGING ELECTRONIC HIGHWAYS: NEW CHALLENGES FOR POLITICS AND LAW
153 (1996).
6 Liber Amicorum Karl-Heinz Böckstiegelet et al., Law of International Business and Dispute Settlement in the 21st Century, ICCA 267-276
(2001).
7Antonis Patrikios, Resolution of Cross Border E-Business Disputes by Arbitration Tribunals on the Basis of Transnational Substantive Rules
of Law and E-Business Usages: The Emergence of the LexInformatica, 38 U. TOL. L. REV. 271 (2006).
8United Nations Commission on International Trade Law, Model Law on Electronic Commerce with Guide to Enactment, U.N. Sales
No.E.99.V.4 (Nov. 20 th, 1996) [hereinafter “UNCITRAL 1996”].
9United Nations Commission on International Trade Law, Model Law on Electronic Signatures with Guide to Enactment, U.N. Sales
No.E.02.V.8 (2001).
jurisdictions that have adapted their legislation based on their
provisions.
The aforesaid provision has been cited to put forth certain rules which already
exist and could be of immense importance for arbitrators while resolving an e-
dispute. Beyond providing specific rules for the issues of their respective area
of application, they may also be employed as sources of general principles of
e- business, such as the functional equivalence of written and electronic
documents and signatures or technological-medium neutrality. The same view
is also accepted worldwide that:
10 G.A. Res. 51/162, Art. 5, U.N. Doc.A/RES/51/162 (Jan. 30, 1997) [hereinafter G.A. Res. 51/162].
11 UNCITRAL 1996, supra note 8 at Art. 5.
12 G.A. Res. 51/162, supra note 11, at Art. 9.
applicable in online arbitration, as benchmarks in the context of
comparative law analysis for the establishment of the broad acceptance
of a given transnational rule, as means of identification of e-business
usages, or as means of interpretation.”
Another important rule that the online arbitrators should focus upon while
determining the “trans-nationality” of a given rule is,
“Not only on the wide acceptance of the rule in comparative law, but
also on the current practice in the particular sector of e-business. If a
recent rule reflects current practice, but is not supported by the results
of comparative law analysis, its "trans-nationality" could be founded on
usage.”14
13A. F. M. Maniruzzaman, The Lex Mercatoria and International Contracts: A Challenge for International Commercial Arbitration?,14 A. U.
INTL. L. R. 657 – 660 et seq. (1999).
Online tribunals and their case laws are of paramount importance in the
formulation of a uniform code for aiding the arbitrators in resolving e-
disputes. The awards given by the arbitrators/arbitral tribunals define or
clarify transnational rules and usages. One major step needed instantly is
the publication of the arbitral awards for the interpretation of the
uniform codes which is currently not materialized. The publication of
awards is likely to raise awareness, increase predictability and facilitate
development, acceptance and application of the uniform code by the
online arbitrators. Therefore, a solution that permits the publication of e-
business awards while preserving the confidentiality of the arbitration is
essential.
In the absence of choice of law on the part of the parties, the arbitrators are
vested with the discretion to apply national laws indirectly. The application of
law shall be made pursuant to conflict of law method, i.e., by checking that the
national law to be applied is not in conflict with the international law on that
particular subject. The national law however, can be applied directly if the
arbitrators think it fit for the concerned dispute.
Loopholes:
RECOMMENDATIONS
1. If a comprehensive study is carried out and a vent is allowed for those
customs comprising a blend of e-commerce and arbitration, provided
that the custom is not in contravention with International norms, then
customs must be applied instead of the international norms.
2. The articulation of a body of transnational rules for cross-border e-
business is needed for facilitating online alternative dispute resolution
mechanism. It is time an initiative is taken by the legislators and
international organizations like UNCITRAL, UNIDROIT etc. This is
necessitated for comprehensive and ongoing research in order to clarify
the exact content of the existing transnational principles, rules, customs
and usages of e-business. In addition, further research is needed to
monitor the constant development of the Lex Informatica.
It is submitted that the culture of markets varies across the globe in
accordance with the culture of the land. Thus, formulating a general
principle of law for the application of OADR in settling e-commerce
disputes is a herculean task for which an objective test has to be defined
and a uniform opinion has to be generated amongst the masses of the
world.
3. The awards granted by the arbitral tribunal should be published so that
it may facilitate the formulation of the uniform code for adjudicating e-
commerce disputes by online arbitrators.
4. It is submitted, regarding the application of customs and usages in
resolving e-commerce disputes by the online arbitrators, that while
tracing the roots of usages it is not always convenient to identify it and
if it is identified, then the principle of ‘wider acceptance’ creates an
impeding factor in its application. To alleviate the instant problem, it is
suggested that the expert opinion should be sought.
5. It is highly asserted that during the time of the formation of the
arbitration agreement, the parties themselves should decide the laws
applicable in case of disputes till no uniform law comes into force for
OADR in e-Commerce.
6. In the absence of such provisions demonstrating the application of the
law in cases of dispute, the arbitrator should be given discretion.
However, the details of such law should be provided to the parties and
only after the consent of both the parties should the arbitration
proceedings begin.
CONCLUSION