ODR has the potential to ensure justice for all

(MainsGS2:Government policies and interventions for development in various sectors and issues arising out of their design and implementation.)

Context:

Recently at the Delhi Arbitration Weekend, Union Law Minister Kiren Rijiju emphasized the need for institutional arbitration to enhance the ease of doing business.

Enforcing Contracts:

India has shown tremendous improvement in the World Bank’s Ease of Doing Business report, rising from the 142nd rank among 190 countries in 2014 to 63rd in 2019.
However, India is ranked 163rd, in ‘Enforcing Contracts’, which is a marginal improvement from the 186th rank in 2015 and 173rd in 2006.
The report says it takes almost four years and 31% of the cost of the claim to enforce a contract in India; in contrast, it takes just over two years and costs 22% of the claim value in Brazil.
In Mexico it is 341 days and 33% of claim value, and Vietnam 400 days, and 29% of claim value.
India opened up its economy in the 1990s, which was the decade of growth for international arbitration.
As more countries entered into bilateral investment treaties, institutional arbitration became the preferred choice of resolution.

India on the right path:

Although India introduced its first piece of legislation on arbitration and conciliation by the middle of the decade, it acquired a reputation of being ‘arbitration-unfriendly’, as the Srikrishna Committee pointed out in 2017.
Various reasons cited are lack of preference for institutional arbitration over ad hoc arbitration, frequent interference from the judiciary from the appointment of arbitrators to the enforcement of awards, and setting aside of arbitral awards on grounds of ‘public policy’.
The amendments of 2015 and 2019 and a few recent judicial decisions have put India on the right path.
The scope for using ‘public policy’ as a ground for setting aside awards has been narrowed, and there is a focus on prioritising institutional arbitration.

Frontrunner in ODR:

India can still make use of its strengths in technology and emerge a frontrunner in ODR, thanks to the almost universal dissemination of online technology during the COVID-19 pandemic, when the judiciary led the way with online hearings.
ODR, which is about resolving disputes in a virtual environment, has several advantages.
It can reduce the burden on the courts, save time and costs, and provide effective resolutions.
ODR involves more than just audio/video conferencing as it encompasses the integration of tools such as multi-channel communication, case management systems, automated case flows, digital signatures and stamping, and even the application of advanced technologies such as blockchain, natural language processing, artificial intelligence, and machine learning.
NITI Aayog has rightly claimed that India is “uniquely positioned to emerge as the epicentre for the developments in ODR” due to the need for an efficient dispute resolution system and advancements in technology.

Way forward:

Incentivise use of ODR by way of legislative measures such as setting ODR as a default dispute resolution tool for categories of disputes arising out of online transactions, fast-tracking enforcement of ODR outcomes, and exempting or reducing stamp duty and court fees.
Solve infrastructural challenges, curb the digital divide, and catalyse ODR’s growth by optimising existing setups such as Aadhaar kendras to also function as ODR kiosks.
Each court can have an ODR cell along with supplemental technical and administrative support.
On the lines of the Finance Minister allocating ₹7,000 crore for the third phase of the e-Courts project in the Union Budget 2023 (aimed at digitising the justice system), a dedicated fund must be set up for furthering ODR.
Government departments should explore ODR as a grievance redress mechanism.
Proactive use of ODR by government entities will not only increase trust in the process but also ensure that citizens have access to a convenient and cost-effective means of resolving disputes with the government.