Absence of jurisdiction in online dispute resolution (ODR) Thursday, Aug 16 2012 


The Hague convention was drawn on the same lines as the Brussels 1 Regulation. It is remarkably similar to Brussels 1 Regulation, for it states guidelines on jurisdictional agreements. This includes the application of general and specifics on jurisdiction agreements which are closely identical to The Brussels 1 Regulation[1].  Courts are reluctant to state when another court acts improperly based on political, religious, racial or regional grounds, unless there is an obvious derogation from the requirement of the jurisdiction. Instances where a claimant is suspected to have had an unfair trial regardless of the jurisdiction, the expected effect would be to have a fair trial, possibly in the same jurisdiction or another jurisdiction mutually agreed by the concerned parties subject to the provisions of the law[2]

The Hague convention does provide for exclusivity of jurisdictional agreements, which presupposes there must be two or more parties for a valid jurisdiction to be effective[3].  Its provision on jurisdictional agreement is based on the standing that there would be a recognition and enforcement of a judgment in an exclusive choice-of-court agreement, and this will have the recognition and enforcement in other member states since there are no grounds for the refusal as required in the convention.[4]

The Hague Convention is a mechanism provided to ease obtaining evidence abroad. The challenges in resolving disputes through jurisdictional agreements are evident in the fact, that certain disputes are exclusively reserved for the jurisdiction of national courts and not arbitration tribunals.  From all the evaluations it is evident there is no uniform international law in the enforcement of foreign judgments in commercial litigation. However, there is neither a universal law in the enforcement of foreign judgments in alternative dispute resolution (ADR), and online dispute resolution (ODR), fortunately, it guarantees accessibility, simplicity and effectiveness in its usage.

Interestingly, over a 100 million disputes are filed online each year around the world. This numbers have been on the increase and recent statistics shows the increase will continue. As our society becomes increasingly wired, internet users expect maximum utilisation of technology seen in various spheres of life. Also an expectation that they will use the latest information and communication technologies to get their issues resolved as quickly and efficiently, as possible. Unfortunately the default channel for resolving most problems, which is normally the use of litigation through the courts, are unable to deal with online, high volume, low value cases [5].

Governments and international institutions through their research have concluded that Online Dispute Resolution (ODR) is the best option for providing fair redress for these online cases. Several (including UNCITRAL and the European Union) have recently announced plans to launch cross-border ODR schemes. Although, there has been a couple of challenges on an emerging concept many crucial details are yet to be addressed: How can fairness be ensured? Who should act as the decision makers? Should outcomes be binding? How can these systems benefit the developing world? Fortunately, some of these challenges are being dealt with through governmental legislations.

In the European Union, Article 17 of the E-Commerce Directive provides in online dispute resolution ‘member states shall ensure that,in the event of disagreement between an information society service provider and the recipient of the service, their legislation does not hamper the use of out-of-court schemes, available under national law, for dispute settlement, including appropriate electronic means’.

The attraction of ODR is not just its accessibility in the wired society we live in. Rather, it is the  convenience and effectiveness it offers. Since it is something that can be incorporated into agreements or contracts in the bid to build trust among users. Worldwide confidence in ODR usage is on the increase. Most importantly the interest shown and seen in developing countries in the use of ODR in the resolution of disputes has been phenomenal. The maintenance of  trust is an extremely essential requirement in establishing a universal online dispute resolution platform.

What concerns do you have in the use of online dispute resolution(ODR) in the resolution of disputes?

[1] International Commercial Litigation-Trevor Hartley P.202

[2] ‘The Eleftheria’ High Court [1970] P.94

[3] Chapter 1 Article 3 The Hague Convention

[4] Chapter 2 Article 8 The Hague Convention

[ 5] Graham Ross, Modria Europe

 

Forum shopping in commercial litigation Saturday, Aug 11 2012 


International judgment recognition is the determination of rights and obligations made by another court other than the court of origin. Parties involved in contractual relationship in International commercial transactions are often preoccupied with ascertaining whether their judgment would be granted International recognition.  Recognition on the other hand determines the acknowledgment of rights; therefore recognition is fundamental and it precedes enforcement.

This desire leads to careful choice-of-court agreement which invariably depends on choice-of-law chosen by parties.[1] A judgment given in a member state is expected to be recognised in other member states without any special procedure being required. The need to have judgments legitimacy and recognition both within the State of origin and internationally is profound that parties strive to act within the guidelines of international law[2].

 Significant issues in International dispute resolution and some recommendations is the Discontinuance with Forum shopping in international commercial litigation

Forum shopping is a common law procedure which occurs when a party seeks to by-pass his natural forum and seeks to bring his action in some alien forum. Solely because of the perceived relief or benefits which would not necessarily be available to him in his natural forum.[3]  This analysis though helpful, does not give a precise description of what forum shopping really means. This is because there remains an unresolved question on what really is meant by the word natural forum, the benefit to the plaintiff and reasons for bypassing the natural forum. Natural forum has been held  by the court  as the forum that is seemingly closely connected to the dispute,[4]thus the jurisdiction with which the dispute has the closest connection  is the natural forum for the disputes while the jurisdiction that has no substantial connection with the dispute may be regarded as a foreign forum.[5]

The complexities of forum shopping are ever so present in international commercial litigation and may operate to deny parties the much expected benefits of international commercial trade.  However Forum shopping is not just about exploiting the anarchy of different jurisdictional rules. Instead it is equally possible within the context of a treaty-based regime, such as the Brussels and Lugano Conventions.[6] Natural forum has been used to describe the place that is advantageous to the party[7] to resolve the dispute, thus the forum which is convenient to witnesses may be a major consideration in determining the natural forum of the dispute. An appropriate forum is always effective and should be considered for both parties.[8]Forum shopping has been abused in systems considered attractive by litigants because of the ‘greater income’ to practitioners.


Forum shopping is evident in commercial litigation,which is unavoidable. In ODR,forum shopping is non-existent. Do you think this makes ODR attractive to disputants?

 

[1] Article 33 (1) of the Brussels 1 Regulation

[2] Chapter 111 Article 8 (3) of the Hague Convention

[3] Boys v Chaplin [1971] AC 356,401

[4] JJ.Fawcett,Forum shopping Some Questions Answered 1984 35 N IRLEGAL Q 141 AT P.141

[5] JJ.Fawcett,Forum shopping Some Questions Answered 1984 35 N IRLEGAL Q 141 AT P.141

[6] Third interim report on Declining & referring jurisdiction in International jurisdiction at International Law Association

London Conference (2000)

[7] MacShannon v Rockware Glass Ltd [1978] AC 795 at p.812

[8] Owusu v Jackson[2005]ECR 1-1383