In
this day, transactions often take place through the World Wide Web. Commercial
transactions conducted on this medium are labelled as e-commerce. Nevertheless,
with the purpose for e-commerce to persist to flourish, legal confidence should
subsist such that commercial transactions completed online will be put in force
in the physical world. A dependable and enforceable dispute resolution
mechanism customized exclusively to the needs of the e-commerce milieu would
assist in the progress of such officially authorized certainty. Proposed
solutions on online dispute include online alternative dispute resolution (ADR)
intuitions that assimilate either a mediation or arbitration model, or some
sort of combination of the two. [1]
As noted earlier, the idea of taking legal action in a foreign jurisdiction
under foreign rules is taken rather anxiously by all businesses engaged in
international transactions, including those now partaking in online
ventures. The best solution historically for the resolution of
international commercial disagreements has been conventional ADR services.
As
stated earlier, ADR is normally speedy, efficient and
confidential. Nevertheless, it is inappropriate for settling online
commercial disputes, predominantly for the reason that legal revolution have
insulated in the wake of the changes in the social, technological, and
commercial mores of cyberspace. Moreover, creative entrepreneurs and
academics have thus devised dispute resolution programs on the web.[2] The
aptitude to play a part in an online proceeding of this category generates a
freer market for dispute resolution, a market unfettered by anxiety of locality
or time. The accessibility of online arbitration services enables parties at
any place and at any time to commence or take action to a petition by accessing
a website and finishing electronic forms that steer them through the numerous
stages of the course of action. Moreover, the individual parties are able
to become accustomed to the process particularly to their precise needs and
utilize multimedia technology to conserve time and money.[3]
This sleek and collectively obtainable process diminishes entry impediments to
arbitration for businesses and individual parties, providing a new means of
access to justice.
Initially,
the individual factions on the web more often wouldn’t have seen each other in
the physical world considering they live actually in different nations or
continents. In the real world, common consumers do not habitually go into an
international agreement. On the other hand, in the Internet, they would have
taken advantage of small transactions, which is unusually for them considering
they would have second thoughts in acquiring assets in the physical world. [4]
Courts normally are slow and expensive. Furthermore, courts are considered as a
financially irrational channel to resolve disagreement arising from the World
Wide Web. The factions to such small or medium-sized disagreements in the web
will time and again have hardwearing economic enticement not to pursue court
proceedings, leaving the fraudulent party with a victory.[5]
Additionally,
online arbitration could provide this effectiveness, because the alternative to
legal actions in courts is barely negligible and therefore much less costly.[6]
Nevertheless, difficulties follow from this form of legal effectiveness. Online
arbitration compels the factions to give up some of their liberties, which does
not stimulate faith and which is the motive why arbitration at present still
deal with a sequence of legal hindrances. In terms of the claims of the
consumer, there is for instance a predicament of arbitrability beneath a
quantity of regulations. [7]Though
it is acceptable that most of these legal hindrances are simply errors in the
legal system these obstacles are still there.
The international market offered by
e-commerce creates peril that may be taken in hand by incorporating arbitration
clauses in online contracts. Introducing numerous customers one click far from
carrying out a business deal that generates the risk of thousands of consumers
putting on record lawsuits in their domestic locations or a fusion in a class
action lawsuit.[8]
The
process of arbitration occurs when a third party is chosen by the parties
involved, or proposed by the institution selected by the factions, provides a
decision on a case while applying fundamental procedural principles.
Conventionally, similar to traditional arbitration, its online counterpart
resolves a dispute by making a practical decision.[9]
This is what is labelled as the binding form of arbitration. It is a procedure
where judgments are enforceable by the powers that be. The philosophy of
binding arbitration online is that it comprises a mode of private judging, a
substitute for court litigation.
Thus, in the milieu commerce in the
World Wide Web, arbitration's supplementary remuneration of guaranteeing an
adjacent medium for resolution of the dispute and eliminating the presence of
class action lawsuit stand up to added importance.[10]
Online arrangements may take account of an arbitration stipulation with a forum
assortment clause and a preference of law clause.
[1] Lasprogata,
G. (2001) Virtual Arbitration: Contract Law and Alternative dispute
resolution, Journal of Legal
Studies Education Vol. 19 No. 107
[2] Katsh, E., Rifkin, J.,
Gaitenby, A., (2000) E-commerce, E-Disputes, and E-Dispute Resolution in the
Shadow of eBay law, Ohio State Journal of Dispute Resolution, No. 15 ,
pp.705
[3] Katsh, E.,
(2000) New frontier. Online ADR becoming a global priority, in Dispute Resolution Magazine, winter,
pp..6.
[4] Lalive, P., (1999)
Towards a Decline of International Arbitration?, The Journal of the
Chartered Insitute of Arbitrators, No. 4.
[5] Vahrenvald, A.
(2000) Out of Court dispute settlement systems for e-commerce, Report on legal issues, Joint
Research Centre of the EC, Ispra (
[6] Lasprogata,
G. (2001) Virtual Arbitration: Contract Law and Alternative dispute
resolution, Journal of Legal Studies Education Vol. 19 No. 107
[7] supra. Katsh,
E., Rifkin, J., Gaitenby, A., (2000)
[8] supra. Lalive, P.,
(1999)
[9] supra. Vahrenvald, A.
(2000)
[10] supra. Katsh, E., (2000)
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