Highlights of the 30th Session of UNCITRAL Working Group III on ODR Thursday, Oct 30 2014 

I was delighted to attend my 1st UNCITRAL Working Group III on ODR conference at the UN headquarters in Vienna from 20th -24th October 2014, as a delegate of the Chartered Institute of Arbitrators, London UK.

It felt good to see two other National Center for Technology and Dispute Resolution Fellows, Professor Vikki M Rogers and Mr Zbynek Loebl. The atmosphere at the conference was cordial, and I found fascinating the discussion groups. Also, I found the discussion groups enlightening, we were spilt up into groups during discussion session breaks, and I must point out that I found it interesting seeing the natural domination of certain countries over others during these session breaks. To a large extent, I began to understand international politics.

Since the inception of the UNCITRAL Working Group III on ODR in 2010, the primary objective has been to seek for ways to resolve high -volume, low-value disputes. Essentially, create an ODR system which is feasible, sustainable and compelling to both buyers and sellers.
Notably, most jurisdictions in the European Union, do not recognise as binding to arbitrate before an actual dispute, hence the EU stand on Track 2. The US, on the other hand, has an interesting stand on the issue of a dispute within the scope of the UNCITRAL ODR Track 1 Rules, providing for a dispute resolution process ending in a binding arbitration.

With so much to determine in international transaction under ODR, two fundamental challenges seem to be consistently raised. Firstly, the no-pre dispute agreement option, which means a variety of options could be used such as litigation, arbitration, mediation, facilitation and negotiation. The no-pre dispute option has been advocated by some, because the consumer is required by law, to be aware what the dispute is all about, and possibly of all options in dealing with the dispute, as opposed to being bound by a process that may be unfavourable. Secondly, the arbitration option, the advantage of the arbitration option is the fact, awards can be enforced internationally under the New York Convention on foreign arbitral awards to which most jurisdictions are signatories to.

Proposal by the Governments of the US and Columbia
An application under Track 1 Rules for a dispute resolution process ending in binding arbitration to be resolved under the Rules, which states in certain States, pre-dispute arbitration agreements with consumers may not be considered valid under applicable national law. Therefore, any award arising out of such agreement may not be enforceable against a consumer located in such a State.
An application under Track 1 for buyers located in certain States at the time of the transaction, a binding arbitration agreement capable of resulting in an enforceable award, one that requires that the agreement to use the Track 1 Rules after the dispute has arisen.
Any dispute that arises within the scope of the UNCITRAL ODR Track II Rules, which provides for a dispute resolution process ending in a non-binding recommendation, the parties may seek an amicable settlement of that dispute through negotiation, and if in the event negotiation is unsuccessful, facilitated settlement with the UNCITRAL ODR Track II Rules will be applied.

Proposed by the Governments of the US and Columbia on the Model Clauses for Track I and II
Subject to Article 1a of the UNCITRAL ODR Track 1 Rules, any dispute within the scope of the UNCITRAL ODR Track 1 Rules, which provides for a dispute resolution ending in a binding arbitration, shall be settled by arbitration as stated under the UNCITRAL ODR Track 1. The US stand on Track 1, which advocates for arbitration is an attractive one, however, there has been some sceptics who view the Track 1, which promotes binding arbitration, as a means to avoid consumer class action under their domestic civil law procedure. The US stand on the use of Track 1, presupposes that there are few if not the non-existence of international class action cases.

Proposal by the Chinese government for an integration of Track 1 and Track II of Online Dispute Resolution (ODR)
Rules should be a cost-effective procedure for dispute resolution in low-value, high-volume e- commerce transactions.
Rules should provide and ensure both buyers and sellers have confidence in a predictable legal environment in the online market.
Rules should facilitate micro and SMEs businesses access to international markets through e-commerce.

There was an unanimous agreement on the Chinese proposal. This was simply because the pointers dealt with, were all encompassing, most importantly the principle of having the best interest of consumers, as well as protecting the sellers’ rights at its core. The proposal made will certainly get both buyers and sellers into the ODR System. With buyers and sellers getting on the system, this means the buyers have some confidence on the ODR system. As this is established, confidence will be there that any dispute that does arise will be handled through a structured ODR platform.

The adoption of the Online dispute resolution for cross-border electronic transactions: draft procedural rules.
In as much as there was an adoption of the Online dispute resolution for cross-border electronic transactions: draft procedural rules, there were a couple of concerns raised which were said will be addressed by the Commission. An important success of the conference was the agreement, if parties failed to agree on a proposed track, an application of a default rule to the effect that only the consumer would be presented with the option to determine the procedure to be followed.
Another commendable point, was the agreement only consumers from jurisdictions in which pre-dispute agreements to arbitrate were not binding should be permitted the right to an option to determine the nature of the final stage, and that all other parties would be bound by their initial agreement made at the time of transaction.

Clarity was sought in possible consequences where vendors failed correctly to notify buyers of their options regarding the final outcome of the process. It was agreed, in such circumstance, the likely result would be that the notice was not valid.

The UNCITRAL Working Group III on ODR continues with its deliberations on in New York, USA in February 2015.

Following the outcome of the just concluded 30th Session of the UNCITRAL Working Group III on ODR in Vienna, I would suggest that representatives of consumers’ international groups should actively participate in the system that UNCITRAL is seeking to create in online dispute resolution.

As deliberations continue in coming months, what other considerations should the ODR Working Group explore?

Africa and Alternative Dispute Resolution processes Sunday, Sep 23 2012 

Africa, as a continent has always resolved its disputes using alternative dispute resolution processes. This has been the norm, even before the formalisation of ADR at the Pound conference in 1976.  ADR has been part of the traditional communities, from negotiation, to mediation and conciliation. The traditional African community had minimal knowledge of resolution of disputes via the law courts, until the influx of western education.

In these communities, such as Nigeria and Ghana, the elders resolved disputes because of the notion, that they were the main people who were capable of resolving disputes.

As a paternalistic society, fathers and male elders determined how the communities were governed. In some cases, traditional rulers, usually a male member usually resolved disputes among its people. Due to the fact, the eldest male members of the communities were held in high esteem as well as revered. There rulings were seen as the final verdict, not subject to appeal. The traditional society in most countries such as Nigeria, Ghana, Kenya, and South Africa maximised the influence of the elder(s) and sometimes traditional rulers in decision-making, and at the end these communities where peaceful places to live in.

In traditional African communities, disputes were usually minor matters, although in exceptional cases, serious matters such as murder did arise and in such situations the elder or traditional ruler had to give a ruling .The beauty of the resolution of disputes by the elder(s), is based on the concept that the elder(s) know it all. In most circumstances, these assertions were proven correct. A Nigerian proverb which illustrates the power of elders in the African dispute resolution process is one that states ”what an elderly person sees seating down; a youngster is unable to see the same thing even upon climbing a tree”. For this reason, words from elders were respected because it was believed, they have seen it all and nothing is new to them.

In some aspects, the assertion that the African elder(s) know it all, in the dispute resolution process can be questionable. In some regards, this can be incorrect solely because it is only possible that the elder(s) or traditional ruler knows all that pertains to their area of experience and expertise, but to allude to the notion they know it all is simply incorrect.

The elders have been effective and efficient on the resolution of disputes in traditional African communities. Majority of disputes in the African communities were based on land and family disputes. Land was seen as the main influence of economic growth and human development. A significant number of men and women earned their living from the land, from tilling the land as farmers, to animal rearing. As the elders were seen as custodians of land, they were better placed to determine such disputes. On the other hand, family disputes were mainly based on number of women a man was married to, and some cases the legitimate and illegitimate children of a man. In these areas mentioned, it will be justifiable to say the elder(s) were the best custodians of justice in the dispute resolution process.

As the laissez-faire societies grew in size and complexity, the concept of impartiality in the dispute resolution process began to undergo a radical transformation in the traditional African communities. Notably, in communities were the powers of the Clan system became a big challenge. Especially, in a situation a disputant came from one Clan different from the other disputant. In such circumstances, the issue of impartial decision by the deciding elder(s) became one that was seen as controversial.

As a result, the law courts became imperative to have in the African communities. Purely because independence of the judge, for which impartiality is more or less guaranteed usually known as the hallmark of the court system, was seen as a mandatory requirement in any society. This concept of impartiality was seen as lacking in the traditional African communities; regardless of the fact a fair and just society was evident everywhere in those communities. Although, the elder(s) always promised to guarantee impartiality in the dispute resolution process, the law courts worked on the premise ” justice must not only be done, but must be seen to be done”. How do you explain to a disputant from a Clan, other than where the elder(s) is from, that the other disputant from the same Clan with the elder(s) will get justice in the dispute resolution process?

ADR is not new to Africa….