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?

Concept of alternative dispute resolution and online dispute resolution Thursday, Sep 20 2012 

The continuous movement of people, goods and services have been hailed as the hallmark of the modern times. One embraced and encouraged by both public and private sectors of the society.

The flexibility ADR and ODR in resolving disputes cannot be underestimated, simply because of its universal acceptance, and cost effectiveness.

ADR deals with resolving disputes, purely to avoid litigation; while ODR is the use of processes and techniques in the resolution of disputes using information technology. ODR in recent years identifies mostly with consumer disputes in the form of e-commerce.

ADR relies on face to face contact for the resolution of disputes, while ODR relies obviously on internet-technology tools.

In view of the similarities  seen in ADR and ODR in the resolution of disputes, it comes as no surprise that these form of dispute resolution are both gaining momentum in both developed and developing countries. ADR is an accepted well established technique in the resolution of disputes. ODR, on the other hand represents the use of ADR processes and information technology. This is in the reliance in technology, usually the internet.

ODR has been instrumental in the resolution of consumer disputes within the private sector, though yet to be endorsed as a form of practice by mainstream governmental bodies. Major private institutions such as eBay, PayPal have both become pace setters of ODR in the resolution of disputes This is with an acclaimed use of the ODR systems in the resolution of consumer disputes in an upscale of over 60 million disputes annually.

Surprisingly, ODR remains a procedure that has failed to keep pace with the rapid growth in e-commerce. Interestingly, within Europe e-commerce’s growth has not impressed technology enthusiasts. Within Europe, where e-commerce growth has lagged behind, compared to some other regions 50% in UK, Denmark, Norway and the Netherlands reportedly bought goods or services over the Internet in 2011. However, in previous year 2010, only 5% of European consumers used any ADR process to resolve a dispute. In 2011, there was an increase in the use of ADR processes for the resolution, which has been seen as the rise in awareness and acceptability.

Similarly, only 9% of businesses reported ever using ADR.  This onward growth of ADR has had an impact on ODR. This has continued despite the fact that ODR represents an easy, affordable and simple way to resolve disputes that arise out of online transactions.  For consumers, ODR can provide redress for problems that come up when litigation is not a viable option. For consumers, it will definitely increase trust, improve reputation and allow for rapid and fair handling of complaints, unpaid invoices and other unwelcome business distractions.

ODR is the new frontier in dispute resolution in an internet age.

Do you think like I do, ODR has its place in the dispute resolution process?