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Transformation of Dispute Resolution
Transformation of Dispute Resolution
Transformation of Dispute Resolution
This paper investigates the enormous impact of the digital revolution on the landscape of
international dispute resolution and the resulting implications for international law. It delves
deeply into the growth of legal practice, the shift from traditional to digital dispute resolution
procedures, the incorporation of international legal frameworks, and the use of online platforms
and blockchain technology. Furthermore, the paper dives into real-world case studies that
demonstrate the successful use of Online Dispute Resolution (ODR) as well as the inherent
obstacles that come with this digital shift. Finally, it emphasizes the vital importance of striking
a balance between leveraging the benefits of technology and safeguarding fundamental
principles of justice, transparency, and security within the framework of international law.
A number of economic sectors now seem different as a result of the extensive use of IT
technology and the digital revolution.1Technology is changing not only the way we
communicate; it is altering the way we disagree and the way we resolve our disputes.2 As legal
technology (LegalTech) has become more sophisticated and provided several advantages to
participants in the Dispute Resolution area, the influence has also been felt in the legal
community.3Impact of the digitalization has expressly increased post the infamous COVID-19
pandemic, that the world had to face, with digitalization in international law. Dispute resolution
is an evolving and complex structure, which is gaining a lot of interest all around the globe.
The technological backing for the same is also making it much more attractive to people all
1
Mania, K. (2022). The Digital Transformation of Legal Industry: Management Challenges and Technological
Opportunities. DANUBE, 13(3), pp.209–225. doi:https://doi.org/10.2478/danb-2022-0013.
2
Rule, C. (n.d.). Technology and the Future of Dispute Resolution. [online] Available at: https://law.scu.edu/wp-
content/uploads/Rule-Technology-and-the-Future-of-Dispute-Resolution-copy.pdf.
3
Audit Strategy Memorandum. (n.d.). Available at: https://www.pwc.com/sg/en/consulting/assets/technological-
advancements-reshaping-dispute-resolution.pdf [Accessed 23 Oct. 2023].
Earlier, till 2015, “Online Dispute Resolution(ODR)” was the term that was prevalent in the
international sector for dispute settlement, but since then it is also termed as “future of ADR”.4
Artificial intelligence (AI) has the potential to transform the world of international arbitration.
AI is ready to transform the way lawyers work, ultimately improving the quality and efficiency
of the arbitration process, from automating basic chores to evaluating complicated legal issues.
ADR and arbitration have gained much recognition throughout the world for multiple reasons.
International arbitration is no stranger to experimentation and adaptability. As the world grows
more interconnected and technology progresses at an increasing rate, the legal profession must
adapt in order to stay efficient and successful in providing justice. In this paper, we will be
discussing the importance and wide acceptability of international arbitration around the world,
along with that we will be analyzing many more aspects of International law and its intersection
with the digital structure.
Technology has profoundly impacted the way we operate and offer services. These
technological changes have not spared the legal industry from contract drafting to storing data
in a database and using iPads to store case files. Due to the huge impact of legal tech, the legal
sector has witnessed tremendous change in the past two decades. Nobody could have predicted
that one day, in the year 2020, courts would be held remotely or that one would be able to make
a contract using technology. However, given the rising adoption and usage of disruptive
technologies by legal professionals, it is impossible to deny that legal tech is here to stay.5
To start with, one of the technologies to explore is videoconferencing, which enables users to
communicate and participate in real-time utilizing video and audio over an internet
connection.6 Participants can see and hear one other while using videoconferencing software
to share papers, presentations, and other resources.7 This technique was critical during the
4
Cortés, P. (2010). Online Dispute Resolution for Consumers in the European Union.
doi:https://doi.org/10.4324/9780203847756.
5
Priyanka (2021). Digitalisation, Technology and the Legal Fraternity in India. Available at:
https://www.legalbusinessworld.com/post/digitalisation-technology-and-the-legal-fraternity-in-india [Accessed
Oct. 15 AD].
6
Ho¨rnle, J. (2003). Online Dispute Resolution: The Emperor’s New Clothes? International Review of Law,
Computers & Technology, 17(1), pp.27–37. doi:https://doi.org/10.1080/1360086032000063093.
7
Ibid.
Adding to that, there have been several new legal start-ups that are supporting the idea of taking
the legal work to a new complete electronic form. AI-backed technologies, such as AI-based
e-discovery solutions, document review, contract management, and so on, are just emerging
and have the potential to further revolutionize the legal business.9 To name one, Kira10is a
software that has been widely accepted by tier 1 firms all around the world, including India,
this software has been proven pivotal in the work of researching and contract reviewing.
This shows that AI and the introduction of technology in the Indian legal sector have been
proven of vital importance and are only proving to be of benefit. The notional working structure
has been changed, such as of now, the courts have started to accept the online appearance and
live proceedings are being publicly displayed over streaming services. The ADR and the
negotiation have also been conducted remotely and are done in a much faster and more
productive manner.
As noted in the above section of this paper, the Indian legal sector, in various aspects has
witnessed a gradual shift in the use of legal tech in daily working. Similarly, International
arbitration is no stranger to experimentation and adaptability. The shift from the traditional
paradigm to the new digital one has been of great help in easing the working. In the realm of
communication, it is evident that post the pandemic, the arbitration proceedings have shifted
from the traditional face-to-face meetings to the much new form, namely ODR. The traditional
methods were both time-consuming and expensive, as they included traveling to locations and
other expenses that might result from the long and tedious procedure of dispute resolution. It
is accompanied by the effect upon the worldwide reach. Traditional approaches are usually
geographically restricted, limiting their impact to specific areas. The digital paradigm
8
Julieta Berenice Gómez-Moreno (2023). Advocacy for Online Proceedings: Features of the Digital World and
Their Role in How Communication is Shaped in Remote International Arbitration. International Journal for the
Semiotics of Law - Revue internationale de Sémiotique juridique. doi:https://doi.org/10.1007/s11196-023-10041-
y.
9
Supra, note 5.
10
kirasystems.com. (n.d.). Machine Learning Contract Search, Review and Analysis Software. [online] Available
at: https://kirasystems.com.
Another aspect is, also, that the main objectives of the UN as mentioned in the UNCITRAL
and also agreed upon in the New York Conventions, were transparency and accountability to
the parties. The introduction of the Online Dispute Resolution(ODR), has affected the objective
in multiple ways. For instance, in the traditional methods, it became difficult for the parties to
hold the parties accountable for malicious actions, or their acts violating the treaties or the
agreements entered into, but with the legal tech smart contracts are readily available on the
blockchain and one is much more accountable to the other parties and the risk of breaches and
vitiating the agreements has also reduced. It can be said, without any doubt that, with
digitalization, there emerges the risk of cybercrimes and other digital vulnerabilities with
respect to the data privacy matters for the parties, but with developments in AI, it has been
handled by improving the same, and introducing firewalls and encryption of the data and any
communication of any sort to protect the parties to such vulnerabilities.12
We saw how ADR over time has emerged in the national structure of India, and how the
traditional model is being overpowered by the new model, as it provides to be of much benefit,
as it benefits the parties in multiple forms.
It is important for a nation to build good relations with other countries and also to build a good
reputation on the international front. Despite full efforts, differences are an inevitable part of
international relationships as one enters into multiple agreements, treaties, etc. with this,13
multiple conflicts of interest emerge with the countries, varying from border disputes to trade
disputes and other multiple fronts.
11
Łągiewska, M. (2022). The New Landscape of Arbitration in View of Digitalization. Brill | Nijhoff eBooks,
pp.208–217. doi:https://doi.org/10.1163/9789004514836_013.
12
Anand, A. (n.d.). ONLINE DISPUTE RESOLUTION: THE NEW NORMAL? [online] Available at:
http://burnishedlawjournal.in/wp-content/uploads/2021/04/ONLINE-DISPUTE-RESOLUTION-THE-NEW-
NORMAL-By-Ankit-Anand-LL.M.-Chanakya-National-Law-University-Patna.pdf [Accessed 24 Oct. 2023].
13
www.mondaq.com. (n.d.). Alternative Dispute Resolution In The International Framework: Cooperative
Solutions Beyond Courtroom That Are Bridging Borders & Harmonizing Nations - Arbitration & Dispute
Resolution - India. [online] Available at: https://www.mondaq.com/india/arbitration--dispute-
resolution/1365956/alternative-dispute-resolution-in-the-international-framework-cooperative-solutions-
beyond-courtroom-that-are-bridging-borders--harmonizing-
nations#:~:text=The%20traditional%20method%20of%20resolving [Accessed 24 Oct. 2023].
The arbitration process In the International sector has gained much more recognition, this has
become possible due to “the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, also known as the “New York Arbitration Convention” or the “New York
Convention”, is one of the key instruments in international arbitration.”16 The sole reason
behind the increased number of arbitral proceedings in international disputes, is the
implementation of this treaty, as this treaty “applies to the recognition and enforcement of
foreign arbitral awards and the referral by a court to arbitration.”17 All these factors when
14
Ibid.
15
uncitral.un.org. (n.d.). United Nations Commission On International Trade Law |. [online] Available at:
https://uncitral.un.org.
16
www.newyorkconvention.org. (n.d.). The New York Convention» New York Convention. [online] Available at:
https://www.newyorkconvention.org.
17
Ibid.
There are multiple statutes that govern the International law for the ADR procedure. In the
above argument, we saw how UNCITRAL has been used to govern the ADR, now we will look
at other statutes/treaties that are aiding the procedure, making it much more lucrative to the
parties. As we noted earlier, the New York Convention, also known as The 1958 Hague
Convention, holds great importance within the realm of international arbitration. Its primary
aim is to simplify the acknowledgment and enforcement of foreign arbitral awards, promoting
the international applicability of arbitration agreements and awards across borders. It is a
fundamental pillar of international Alternative Dispute Resolution (ADR), guaranteeing that
arbitration awards are respected by nations that are signatories to the treaty, thus enhancing
trust in the arbitration process.18The key factor of agreement between the parties is also present
in arbitration, the parties must agree to the clause entered into the agreement. Apart from the
treaties, numerous nations engage in bilateral and multilateral agreements that oversee precise
facets of international Alternative Dispute Resolution (ADR).
Accessibility to justice is a legal principle that is being honored by every country in the world.
Indian judiciary as well as through multiple judgments has time and again laid down the fact
that accessibility to justice is a fundamental right of every individual19 and is protected under
Articles 1420 and 2121 of the Indian constitution. Gaining access to justice stands as a
fundamental pillar of international law.22 In this context, online platforms excel as they
significantly enhance the accessibility of conflict resolution avenues. This is particularly
noteworthy in cross-border disputes, where traditional dispute resolution methods can be
hindered by time and cost constraints. Online dispute resolution (ODR) systems offer a
solution, allowing parties from diverse geographical locations to engage in the resolution
18
Supra, note 13
19
NETWORK, L.N. (2016). Access to Justice is a fundamental right guaranteed under Article 14 & 21 of
Constitution: SC Constitution Bench [Read Judgment]. [online] www.livelaw.in. Available at:
https://www.livelaw.in/access-justice-fundamental-right-guaranteed-article-14-21-constitution-sc-constitution-
bench/ [Accessed 25 Oct. 2023].
20
Constitution of India, Article 19
21
Constitution of India, Article 21
22
United Nations (2015). Access to Justice - United Nations and the Rule of Law. [online] United Nations and the
Rule of Law. Available at: https://www.un.org/ruleoflaw/thematic-areas/access-to-justice-and-rule-of-law-
institutions/access-to-justice/.
The next aspect is fairness in the proceedings, without fairness justice can’t be served upon the
parties to the dispute, therefore it is of utmost importance for digital dispute resolution to adhere
to such norms and provide a fair chance to the parties. As ODR, is completely an online-based
resolution method, it does not make any party above anyone and as they follow a set of
standards and rules, it provides both the parties an egalitarian platform to resolve the disputes.
Furthermore, the documenting of procedures and reliance on objective data for decision-
making, both of which are eased by technology, contribute to the reduction of bias and
prejudice. This emphasis on openness boosts public trust in the impartiality of the resolution
process.
International legal norms promote the idea of transparency in any form of conduct that is being
conducted on the international level unless it is of national importance related to defense or any
confidential manner. In the realm of International arbitration being conducted in a digitalized
format, it is very important for one to be transparent, and at the same time protect their rights.
The ODR method promotes transparency in multiple manners. Most ODR platforms maintain
archives of discussions, evidence, and verdicts, ensuring a transparent path for the dispute
resolution process. Moreover, involved parties can often monitor the progress of their cases in
real time, introducing an extra layer of openness and responsibility to the procedure.
Early Online Dispute Resolution (ODR) solutions did not generate a disruptive innovation that
could have provided a more than tenfold improvement over existing methods. Instead, they
introduced incremental changes that streamlined existing alternative dispute resolution
processes. Recent technological advancements in computer networks, such as blockchain
technology and the growing adoption of cryptocurrencies, have enabled the development of
novel mechanism designs for online dispute resolution. Given the decentralized nature of juror
23
Anon, (2023). Online Dispute Resolution (ODR): Bus to Become An Arbitration Hub - Civilsdaily. [online]
Available at: https://www.civilsdaily.com/news/online-dispute-resolution-odr/ [Accessed 25 Oct. 2023].
24
Cortes, P. (2014). Online Dispute Resolution Services: A Selected Number of Case Studies. [online]
papers.ssrn.com. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2477885 [Accessed 25 Oct.
2023].
If a conflict arises, the smart contract will alert the Arbitrator via a blockchain-based dispute
resolution interface. A party can digitize the parameters of an agreement, lock the funds in a
smart contract, and condition the intelligent contract such that the work is completed and the
funds are transferred.28 Following the end of the procedure, the smart contract's self-executable
nature will automatically enforce the award and transmit the specified fee to the Arbitrator.29
“The UNCITRAL Electronic Model Law on Electronic Commerce (1996 Convention) and
the ‘UNCITRAL Convention on Electronic Communications in International Contracts (2007
Convention)’ are the primary legal instruments facilitating blockchain contracts. Articles 6 and
18 of the 2007 Convention assert the validity of on-chain arbitration by allowing for electronic
data records and electronic transactions in the arbitration process, thereby providing legal
recognition to on-chain arbitrations.”30
25
Federico Ast, F. & C. at K. and Bruno Deffains, P. at U.P. 2 P.A. (2021). When Online Dispute Resolution
Meets Blockchain: The Birth of Decentralized Justice. Stanford Journal of Blockchain Law & Policy. [online]
Available at: https://stanford-jblp.pubpub.org/pub/birth-of-decentralized-justice/release/1 [Accessed 25 Oct.
2023].
26
Mulia, F.M.-S. (2021). Blockchain Arbitration: The Future of Dispute Resolution. [online] Lexology. Available
at: https://www.lexology.com/library/detail.aspx?g=2a2f2cef-39a5-4551-a7df-4c9e408a5ccc.
27
Ibid.
28
www.mondaq.com. (n.d.). Blockchain, Smart Contracts And Arbitration - Fin Tech - Turkey. [online] Available
at: https://www.mondaq.com/turkey/fin-tech/967452/blockchain-smart-contracts-and-arbitration [Accessed 28
Oct. 2023].
29
Mulia, S. (2021). Blockchain Arbitration: The Future of Dispute Resolution. [online] Fox Mandal. Available
at: https://www.foxmandal.in/blockchain-arbitration-the-future-of-dispute-resolution/.
30
Ibid.
The issues To begin with, blockchain arbitration eliminates the necessity for oral hearings, a
core component of the current judicial system that opposes natural justice principles.32
The issue in India pertains to the enforceability of these awards, India is a member and
signatory to the New York Convention, yet has not completely gazetted its partnership to the
countries, the issue with blockchain is that it is delivered in an online mode the parties, where
they are based. In the international aspect, it becomes difficult for India to execute the awards
granted in ODR, as it is undeterminable by the parties where to execute the same and it becomes
a very difficult and tiring task.35
31
Ibid.
32
Mulia, F.M.-S. (2021). Blockchain Arbitration: The Future of Dispute Resolution. [online] Lexology. Available
at: https://www.lexology.com/library/detail.aspx?g=2a2f2cef-39a5-4551-a7df-4c9e408a5ccc.
33
Supra, note 28.
34
Ibid.
35
Bansal, R. (2019). Enforceability of Awards from Blockchain Arbitrations in India. [online] Kluwer Arbitration
Blog. Available at: http://arbitrationblog.kluwerarbitration.com/2019/08/21/enforceability-of-awards-from-
blockchain-arbitrations-in-india/.
There are many strategic changes and efforts taking place in the realm of ODR, this section
will analyse how in multiple cases ODR is being used to resolve the dispute and it is being
widely accepted through multiple jurisdictions, industries, and in different types of disputes.
Firstly in Franklin County, Ohio, the courts are actively using the ODR method, where the
Prospective participants receive an invitation to use ODR along with their summons and
complaint. They visit the website, providing their email and phone numbers and selecting likely
resolution options via checkboxes. Upon setting a password, they enter the Negotiation Space,
exclusive to the two parties and a certified court mediator. Parties can exchange messages and
data at any time, make and accept offers, and discuss payment arrangements asynchronously.36
It is also reported that “users accessing the audio system represent all income levels from low
to moderate income 40% and middle to upper income 42%. Based on census data derived from
user location, nearly 30% taxes the system outside the traditional court are approximately 17%
of the users. Reside outside the county and Oregon straight. And would likely have had
significant difficulty resolving their cases without the ODR process.”37
As provided in these case studies, the ODR is a great example of delivering justice to the parties
with full efficiency and credibility, where the parties are able to come together and resolve the
disputes without any problem. An ODR-providing software, known as “Modria has teamed up
with the American Arbitration Association (AAA) to build an ODR platform to manage AAA’s
New York No-Fault caseload. The new platform is expected to manage over 100,000 cases on
an annual basis. The platform, which is expected to go live before the end of 2014, will provide
claimants and their lawyers with a secure website to submit online claims and to manage those
claims through the platform.”38 E-bay and PayPal are also majorly using ODR software for
resolving the user disputes that they encounter while conducting their business.39
All these significant events display how ODR is being accepted throughout the jurisdictions,
in India as well, conferences are being conducted where it is noted that ODR is a very healthy
36
JTC Resource Bulletin Case Studies in ODR for Courts: A view from the front lines. (2017). Available at:
https://www.ncsc.org/__data/assets/pdf_file/0023/18707/2017-12-18-odr-case-studies-revised.pdf [Accessed 28
Oct. 2023].
37
Ibid.
38
Cortes, P. (2014). Online Dispute Resolution Services: A Selected Number of Case Studies. [online] Social
Science Research Network. Available at: https://ssrn.com/abstract=2477885 [Accessed 28 Oct. 2023].
39
Ibid.
10
International dispute resolution is accompanied by multiple legal and ethical challenges, this
happens mainly because of the diverse nature of parties involved in the process. Key challenges
that might emerge in the process are:
1. Data Privacy and Security: Dispute resolution requires both parties to share the data
and online dispute resolution is mainly done by uploading the required documents onto
the portal or the software that is being used during the process. Often in cases of dispute
between different jurisdictions, there might be some sort of sensitive information that
might be involved, and also an issue over different data protection laws between the
parties may arise. In such cases, it is vital to ensure that the protection of such data is
done with utmost care. It poses a great challenge in such cases.
2. Jurisdictional Issues: As discussed above, in international dispute resolution, the parties
may be hailing from different jurisdictions, it becomes a huge challenge as the parties
might contend the jurisdiction as the ODR is not done at a certain place. The
determination of which laws would govern the proceedings becomes a challenge.
3. Bias: It is important to note that AI, cannot be developed by itself. It is important to
ensure that the algorithm that is being employed is fairly generating any sort of output.
4. Enforceability: It is very vital to ensure that the ethos of the New York Convention, must
be followed and any award that is derived out of the ADR process is properly recognized
and enforced by the parties.
5. Evidence Tampering: There still lies some sort of hue in the area of acceptance of digital
evidence, with the increase in AI software that is capable of generating images and
documents that are completely like real ones, makes it, more problematic as the parties
might rely upon such bad evidence by the means of evidence tampering and forgery,
hampering the justice delivery.
40
www.ciac.in. (n.d.). Summary of Deliberations and Recommendations of The International Conference on
Emerging Trends in International Commercial Arbitration. [online] Available at:
http://www.ciac.in/summary_conference_dec2010.html [Accessed 29 Oct. 2023].
11
Conclusion:
The realm of international dispute resolution has experienced a profound transformation due
to the digital shift. The swift integration of information technology, driven by the digital
revolution, has not only revolutionized our methods of communication but has also
fundamentally reshaped how conflicts are managed and ultimately resolved. This article has
conducted an extensive analysis of the effects and consequences of digitalization on
international law, with a specific focus on the resolution of disputes.
The substantial influence of LegalTech, especially in the realm of online dispute resolution
(ODR), has not only expedited procedural aspects but has also broadened access to dispute
resolution for a global audience. The urgency for this transition was further underscored by the
COVID-19 pandemic, which accelerated the global shift towards a digital-centric approach to
international law and conflict resolution.
In this shift, the integration of electronic records, data protection, and cybersecurity is critical.
Nonetheless, problems appear with the benefits. This essay investigated these issues and
proposed some remedies to improve the efficiency and fairness of conflict resolution in the
digital era. Despite the advantages, several challenges persist:
Data Privacy and Security: Ensuring sensitive information is protected during cross-border
disputes in accordance with various data protection rules. Encryption, safe data access, and the
creation of clear legal frameworks are examples of solutions.
12
Biasness: When AI and algorithms are used in conflict resolution, we face the challenge of
achieving impartial results. Regular audits and reviews of AI systems, as well as tailored
training programs, are used to address bias concerns.
Award Enforcement: Ensuring that arbitration awards are enforced in conformity with the New
York Convention. Increased international collaboration and a consistent commitment to award
recognition and enforcement are required.
Evidence Tampering: Improving digital evidence acceptance and implementing steps to avoid
evidence tampering necessitate the use of established procedures and advanced technologies
capable of identifying and verifying digital evidence.
To summarize, the digital revolution in international conflict resolution has several benefits
and has resulted in unforeseen changes in the area. However, addressing the underlying
difficulties is critical in order to build a fair, efficient, and secure environment for all
stakeholders. The legal community may benefit from digitalization while adhering to the core
ideals of equity, transparency, and accessibility that underpin international law. This path
necessitates constant adaptation to the changing technical landscape, the attentive cultivation
of trust and ethical standards, and the construction of a worldwide framework for administering
justice in the digital realm.
13