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?