Online Dispute Redressal in India
Why in news?
Union Law Minister, in a recent event held in Delhi International Arbitration Centre, emphasized the need for
institutional arbitration to enhance the ease of doing business. What is Arbitration?
- It is a legal technique for the resolution of dispute outside the
- It allows parties to avoid the normal lengthy recourse to the local courts for settlement of
It is a part of the Alternative Dispute Resolution (ADR) mechanism.
- The Indian arbitration is governed and regulated by the Arbitration and Conciliation Act
- The Act derives its basis from the 1985 UNCITRAL Model on International Commercial Arbitration and the
UNCITRAL Arbitration Rules of 1976.
| Types of Arbitration | |
| Institutional Arbitration | Ad Hoc Arbitration |
| When an arbitral Institution conducts arbitration it is called as Institutional Arbitration.
Example – Delhi International Arbitration Centre, International Arbitration and Mediation Centre (IAMC). |
When the parties agree among themselves and arrange for arbitration, it is called Ad hoc Arbitration
Ad hoc Arbitration has no institutional proceeding. It can either be domestic, international or foreign arbitration. |
What are the advantages and disadvantages of ODR? Advantages.
- Reduce the burden on the courts.
- Saves time, litigation costs, and provide effective.
- Encourages consensual rather than an adversarial approach.
- Geographical limitation can be avoided through ODR.
Disadvantages
- Impersonal, leading to greater distance between the parties and,
- Inaccessible due to lack of infrastructure for technology.
- Lack of protection of confidential material in ODR.
Why India has to focus on arbitration?
- Preferred choice – As more countries entered into bilateral investment treaties, institutional arbitration became the preferred
- Ease of doing business – Despite its tremendous improvement in the World Bank’s Ease of Doing Business report,
India ranked 163rd, in Enforcing Contracts category.
- Unfriendly legislation – Although India introduced its arbitration legislation in 1996, it acquired a reputation of being ‘arbitration-unfriendly’.
| India’s Ease of doing business ranking improves from 142 in 2014 to 63 in 2019 | |
What are the challenges in India?
- Conventional thinking: Reliance on courts rather than alternate dispute resolution mechanisms like.
- Lack of comprehensive laws: While the Arbitration and Conciliation Act, 1996 governs arbitration in India, there is a need for more comprehensive and well-defined laws to cater to the requirements of business houses dealing with arbitration.
- Intervention of courts: Court intervention during arbitral proceedings and the scope for challenging arbitral awards under Section 34 of the Arbitration Act, 1996 have made people more inclined towards the judicial.
- Lack of awareness: There is a lack of awareness among the public, particularly small-scale businessmen and newcomers, about the availability of arbitration as an effective dispute resolution.
- Delays in arbitration: Arbitration proceedings in India can be plagued by delays, particularly due to the heavy workload of courts and the limited availability of.
- Enforceability of awards: The enforceability of arbitral awards in India has been a longstanding issue, with delays and challenges in enforcement proceedings adding to the reluctance of parties to choose arbitration as a means of resolving disputes.
Challenges particular to institutional arbitration in India:
- Issues relating to administration and management of arbitral.
- Perceptions regarding arbitrators and expertise issues relating to resources and government support, lack of initial capital, poor and inadequate infrastructure, lack of properly trained administrative staff, lack of qualified.
What are the measures taken so far?
- The Arbitration and Conciliation (Amendment) Act, 2015 – To make arbitration process user friendly, cost effective and ensure speedy disposal and neutrality of arbitrators. It amended the Arbitration and Conciliation Act.
- N. Srikrishna committee – To prepare a road map to make India a hub of international arbitration. It recommended the creation of the post of an International law adviser (ILA) to advise the government on international legal disputes, particularly Bilateral Investment Trade disputes.
New Delhi International Arbitration Centre – It is an independent and autonomous body for facilitating institutional arbitration.
- Established by the New Delhi International Arbitration Centre Act,
- The Arbitration and Conciliation (Amendment) Act 2019 – It provides for establishment of the Arbitration Council of India.
- Arbitration Council of India – It will frame, review and update norms to ensure satisfactory levels of
- It will also frame policies governing the grading of arbitral.
How India can be made an arbitration hub?
- Incentivize – Incentivize the use of ODR by way of legislative measures.
- Infrastructure – Create infrastructure to curb the digital divide, and catalyze ODR’s growth by optimizing existing setups such as Aadhaar kendras to also function as ODR kiosks.
- Dedicated fund – On the lines of e-Courts project (aimed at digitizing the justice system), a dedicated fund must be set up for furthering.
- Increase trust – Proactive use of ODR as a grievance redress mechanism by Government departments will increase the trust in the process.
