SYMBIOSIS INTERNATIONAL DEEMED UNIVERSITY

E-COMMERCE
RESEARCH PAPER SUBMISSION

‘SIGNIFICANCE OF ADR IN E-COMMERCE’

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Submitted by
Niharika Khanna
Division- ‘D’
PRN – 18010324093
Year – 3rd year
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In
May, 2021
Under the guidance of
Dr.S.B.Md.Irfan Ali Abbas
 INTRODUCTION
E-commerce refers to the mechanism of buying and selling products and services through a
network of electronic mediai. The field of e-commerce has been growing significantly since
the past few years. Majority of the business activities are taking place through online
platforms and the internet. The introduction of this mechanism has changed the minds of
consumers to a great extent in terms of shift in their preferences from physical store to online
stores. Alternate Dispute Resolution (ADR) is an alternative mechanism of litigation in India.
It enables the achievement of speedy trial in India and also helps to resolve conflict more
effectively and efficiently. The concept of online dispute resolution is gaining a lot of
importance these days wherein the disputes between the parties are resolved through an
online platform. It is also popularly known as the “electronic arbitration”.
The rapid change in the behavior of the consumers shifting towards virtual shopping has also
led to increase in the complexities in the business affairs conducted through the online
platforms. Growing complexities have also led to increase in the number of disputes in the
field of e-commerce.ii These complexities do not only occur between the owners of the e-
commerce websites and the concerned regulatory authorities, but also extends between the
owners and the consumers. One of the best mechanisms available for disputes arising in this
field is Alternate Dispute Resolution.
With developments occurring at a rapid speed, there is also a need to bring up new
mechanisms that would be able to resolve the disputes in the field of e-commerce, between
the people irrespective of where they are residing and located in the world. This also thus
calls out for the development of online ADR through which disputes can be effectively
resolved between the parties no matter at which corner of the world they are located in. e-
commerce calls out for an e-mechanism to enable efficient resolution of complexities arising
in the field. Thus, Alternate Dispute Resolution and the online ADR plays a significant role
in e-commerce. Today, different methods of online resolutions such as unilateral binding
online resolution, binding online resolution, etc. helps in solving the disputes that may arise
in the e-business. ADR mechanism would enable the protection of breakdown of contracts
created commercially through efficiently addressing the problem and providing the best
solution for the same. the paper will analyze in detail the significance of ADR in e-commerce
and will also study the various advantages as well as challenges in relation to the same. The
Information Technology Act,2000 that has been enacted to enable the business affairs of e-
commerce will be analyzed in detail and the role that ADR plays in the formulation of the act
will be discussed.

LITERATURE REVIEW
The author has referred to various articles and books for conducting the present research:
1. The researcher has referred to an international journal namely “Online Dispute
Resolution: An Indian Perspective”iii to conduct the present study. The journal gives
a detailed information on the system of e-commerce in India and the phenomenon of
online dispute resolution.
2. An article “Online Dispute Resolution: A new approach for e-commerce
disputes”iv critically analyses the significance that ADR has in e-commerce and also
presents various advantages as well as disadvantages of the same. It also addresses the
constructing future that systems of dispute resolutions have towards the field of e-
commerce and business.
3. Another journal named “ADR, the new skyrocket to solve e-commerce conflict” v
has been referred by the researcher. The journal addresses in detail the significance of
ADR in e-commerce and discusses the role of Online Dispute resolution in the
passing of the Information Technology Act,2000.
4. An international journal namely “Using Online Arbitration in E-Commerce
Disputes A Study on B2B, B2C and C2C Disputes”vi has been referred for the
research paper. The paper discusses in detail all the online Alternate dispute
resolution mechanisms and the role that it plays in various commercial disputes
including Business to Business, Business to Consumers and Consumers to
Consumers. In addition to this, the author also discusses the importance and role that
ADR plays in electronic commercial transactions.
5. A paper named “Alternative dispute resolution for business in developing
countries”vii provides in detail the significance as well as advantages of Alternate
dispute resolution mechanisms in the field of e-commerce and online business
transactions. Additionally, various sectors of business in which ADR plays an
essential role has been analysed in detail.
6. The book “The role of alternative dispute resolution (ADR) scheme in the
settlement of disputes within commercial transactions” viii analyses in detail the
importance of all the alternative mechanisms to resolve disputes in business
transactions conducted online. The meaning and definition of both ADR mechanisms
 and e-commerce has also been provided in detail. The author also mentions the types
of transactions where the mechanism of Alternate Dispute Resolution is used.

RESEARCH METHODOLOGY
The research methodology that will be undertaken for this project is the doctrinal form of
research. This study will include analysing the given case law, and will also discuss legal
statutes, provisions and sources. No primary source of collection of data will be taken up in
the present paper the researcher will focus the research on secondary sources of data. The
sources which have already been presented and published by various authors will be used in
the paper. The style of citation that the researcher will use throughout the project will be
‘Blue Book Law Review’. Other secondary sources of data such as journals, articles,
newspapers, magazines, etc will be referred. Additionally, opinions of the experts, research
papers, authorised websites, dictionary as well as book reviews will be looked upon to carry
out research to complete the paper. The method of citation that has been followed is
“Bluebook citation” where, endnotes have been provided.

DATA ANALYSIS

 The concept & types of Alternate Dispute Resolution, online arbitration

and E-commerce in India.
“Arbitration is a device whereby the settlement of a question, which is of interest for two or
more persons, is entrusted to one or more other persons – the arbitrator or arbitrators – who
derive their power from a private agreement, not from the authorities of a State, and who are
to proceed and decide the case on the basis of such an agreement.” ix As defined by G.Born,
arbitration can be defined as “ a process by which parties consensually submit a dispute to a
non-govern‐ mental decision-maker, selected by or for the parties, to render a binding
decision resolving a dispute in accordance with neutral, adjudicatory procedure affording the
parties an opportunity to be heard.” x From the definitions, it can be said that for a dispute to
be regarded as an arbitration, the following four elements must be satisfied:
 Submission of mutual consent
 A body that makes decisions independently as per the choice of the arbitrators and the
fulfilment of the decision to be neutral
 A complete process must be followed
  The decision must be binding in nature
“E-Commerce or Electronic Commerce means buying and selling of goods, products, or
services over the internet. E-commerce is also known as electronic commerce or internet
commerce. These services provided online over the internet network. Transaction of money,
funds, and data are also considered as E-commerce. These business transactions can be done
in four ways: Business to Business (B2B), Business to Customer (B2C), Customer to
Customer (C2C), Customer to Business (C2B). The standard definition of E-commerce is a
commercial transaction which is happened over the internet. Online stores like Amazon,
Flipkart, Shopify, Myntra, eBay, Quikr, Olx are examples of E-commerce websites.”xi
“In era of globalization, people in 21st century have witnessed the ultimate impact of
Information and Communication Technology on social, economic, legal and cultural arena of
globe. Technological revolution brought by internet has altered the scale according to which
human affairs are being conducted and has fostered a new medium that has impacted well-
established legal conceptions especially with respect to resolution.”xii
“ODR or Online Dispute Resolution is basically employing of available information and
communication technology to deliver ADR services or is implementation of ADR in online
environment. It utilizes internet as a more efficient medium for parties to resolve their
disputes through a variety of ADR methods similar to traditional ADR.” xiii “Hon. Arthur M.
Monty Ahalt (ret.) defined ODR as, ODR is a branch of dispute resolution which uses
technology to facilitate the resolution of disputes between parties. It primarily involves
negotiation, mediation or arbitration, or combination of all three. In this respect it is often
seen as being the online equivalent of ADR.”xiv

 Significance and advantages of Alternate Dispute Resolution in the field

of e-commerce
Alternate dispute resolution has a lot of significance due to the various advantages that it
offers. Also known as cyber-mediation, it has a lot to offer to the field of e-commerce. ADR
is considered to be an important mechanism to solve disputes that arise in e-commerce, due to
the following:
1. Economic Feasibility:-
“Cost is one of the most crucial factors in dispute resolution, as both sides would eventually
like to reach an optimal decision at the lowest possible price. Online ADR best suits the
financial demands of both parties. Most (if not all) of the document exchange in online
proceedings takes place via e-mail, as opposed to fax (which is prohibitive) and post (which
is slow).”xv “Therefore, electronic transmission of documents is not only easier and faster, but
it is also cheaper compared to litigation, where documentation is both costly and vast.” xvi
“One of the most recognized benefits of online mediation is that the disputants do not have to
travel lengthy distances to settle disputes.”xvii “Online disputes can arise between parties
located in different countries; in that situation, at least one of the parties would have to travel
in offline dispute resolution.”xviii “The travel and accommodation costs involved may be
prohibitive, thus making it impractical for the parties to resolve the dispute. Online dispute
resolution, however, places both parties on a level playing field. It is unconcerned with the
financial capacities of the parties, especially when compared to offline litigation, where deep-
pocketed litigants may easily be able to afford on travel and accommodation for their
lawyers, witnesses, and themselves, while the opposing litigants may not.”xix “In the event
that witnesses are required or face-to-face meetings are necessary, instant messaging,
videoconferencing, or chat room conferences can be used to mitigate travel costs.”xx
2. Speedy resolution of disputes:-
“One of the main advantages of ADR over litigation is that it is less-time consuming. Where
offline ADR may help settle a matter in days or months, as compared to the years it may take
to resolve litigation, online ADR promises settlement of disputes within days or even
hours.”xxi “The borderless nature of the Internet diminishes the communication problems
faced by parties and counsel located in different time zones.”xxii “Interested parties can merely
visit the provider’s website and fill in certain electronic forms, thereby also eliminating any
delays associated with receiving appropriate forms.”xxiii “Moreover, the Internet enables
parties to easily obtain data and other information about their cases in real time.” xxiv “In
addition to easy accessibility, e-mail simplifies the task of scheduling ADR proceedings and
avoids any phone or fax-tags in the process.”xxv “E-mail is also a superior and swifter form of
communication compared to fax, as it facilitates the sending of documents of multiple parties
simultaneously, thus saving time and money.”xxvi
3. Non-litigious mechanism:-
“While the intangible (and therefore anonymous) nature of the Internet is often a drawback in
using this medium, these qualities could be advantageous in dispute resolution proceedings.
By removing the physical presence of the opponent, online ADR provides the parties with a
dispassionate approach to the merits of the cause of their dispute.” xxvii “Further, since most of
the arguments or dialogue take place asynchronously over e-mail, it allows the parties to a
dispute to reflect on their positions before articulating them, without any time pressure.” xxviii
“Additionally, such a mechanism blankets any economic or other power imbalance that exists
between the parties.”xxix “Often in offline mediation or arbitration proceedings, a party that is
more economically powerful, in reputation and in size, may intimidate the opponent and
dominate the proceedings.”xxx
4. Forum that provides a neutral decision:-
“Sometimes a traditional ADR proceeding may take place at the office of either a party or
that party’s lawyer. At times, this could determine who is in the position of power.” xxxi “A
neutral location, such as the arbitrator or mediator’s office or another institution, is essential
to remove this power imbalance.”xxxii “The Internet offers this neutral location and denies a
dominating party the potential to exploit the home court advantage.”xxxiii
5. Elimination of complex jurisdictional problems:-
“One of the most perplexing issues spawned by the Internet is jurisdiction. Since formal
sources of dispute resolution, such as litigation, are restricted by concepts of legal
sovereignty and comity, an injured party may not be able to obtain legal recourse without
traveling to the place where the cause of action took place or where the wrongdoer resides or
carries on business.”xxxiv “In the interim, online ADR is not only a flexible and open medium,
but also an attractive option to avoid jurisdictional concerns & the parties transacting over the
Internet can contract to submit disputes to an online ADR provider.”xxxv
6. Facilitation of easy record keeping mechanism:-
An additional usage of opting for ADR as a mechanism to resolve disputes is that it helps in
the facilitation of recording all those documents and transmit them through electronic
medium. Important documents such as the pleadings, oral statements, correspondence, visual
communication, etc. is recorded online which becomes the most useful in cases of reviewing
the documentation.

 Use of Alternate Dispute Resolution in different types of E-commercial

disputes.
“E-commerce covers a wide range of activities, from selling books to consumers to selling
container loads of supplies to factories across the globe. Companies are selling everything
from physical goods, to services, to digital products delivered over the Internet.” xxxvi The use
of different forms of arbitration in resolving disputes arising from different sectors of
electronic commerce (mainly B2B, B2C and C2C) is as follows:
 1. B2B OR Business to Business Transactions:-
“B2B e-commerce is broadly defined as sharing business information, maintaining business
relationships and conducting business transactions by means of tele‐ communication
networks.”xxxvii“B2B disputes are appropriate candidates for online arbitration because of their
higher value and savvy participants.”xxxviii “Arbitration and other alternate dispute resolution
mechanisms provides a more speedy and cost-effective dispute resolution system.”xxxix.
2. B2C OR Business to consumer transactions:-
“B2C is a rapidly growing sector of traditional retail shopping that is facilitated by online
technology. It is necessary to add to this definition that online B2C trans‐ actions have
revolutionized aspects of traditional retail shopping. As a result of the unique borderless
nature of cyberspace, B2C transactions are no longer con‐ strained by national borders, and
B2C transactions now take place internationally more frequently and in greater numbers than
ever before.”xl “Taking into account, the features of B2C transactions, it is clear that an
efficient means of redress cannot be achieved via conventional means and that B2C disputes
thus require a means of redress that is more suited and adaptable to the particular features of
the dispute.”xli Thus, Alternate dispute resolution mechanisms would best suit the features of
such transactions as it would enable the replacement of older ways and means to resolve
disputes. The business persons and consumers are more prone to adapt such a kind of
redressal because these transactions and cases usually ask for settlement where decisions are
neutral between the parties. Thus, ADR plays an essential role in this type of transactions of
e-commerce.
3. C2C OR Consumers to consumers transactions:-
“The consumer to consumer (C2C) electronic commerce relates to electronic retailing
between consumer-merchants and consumer-purchasers.C2C transactions can take place
through personal websites, online auctions and classified advertisement platforms.” xlii “It is in
the interests of all parties to have access to a fair means of redress. Like online B2C
transactions, online C2C transactions are a relatively new phenomenon created by the
Internet, and a simple, efficient and readily accessible system is vital to generate confidence
and deal with any dispute in a fair and even-handed manner. Online arbitration, particularly
in low-value C2C disputes, allows parties to resolve disputes online with neither holding an
advantage over the other. Using the same means to resolve the dispute as used during the
transaction is important since both parties will have access to the technology required for the
online arbitration procedure.”xliii
 CONCLUSION
Therefore, it can be concluded that Alternate Dispute Resolution plays a very significant role
in the field of e-commerce. The pace at which today’s business is growing on an online
platform is unstoppable. With all the business transactions as well as activities shifting
towards the online world, the situations of disputes arising between the participants is
undeniable. It becomes very important to find the proper method and platform through which
these disputes can be resolved. The regular legal process today is said to very cumbersome
involving various formalities and is also very time consuming. One of the primary and most
essential feature of e-commerce is that majority of the disputes require decisions that are
neutral in nature. A settlement which is beneficial to both is what is required in the field on
online business transactions. The traditional legal process is not only lengthy and
cumbersome, but also provides decisions only in favour of one of the parties. It never
involves orders which are neutral in nature. Thus, Alternate Dispute mechanism is the best
way and platform to resolve disputes arising in between parties involved in online business
transactions or e-commerce activities. ADR not only is an efficient and time saving
mechanism, but also provides for decisions which are majority neutral in nature. These
mechanisms involve and recognize settlement as their dispute resolution mechanism and is
thus the best suited for e-commerce. Thus, ADR today has a lot of significance in e-
commerce and when it comes to resolving disputes involving online business transactions.
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i
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ii
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iii
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iv
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v
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vi
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vii
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viii
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x
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xii
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xvii
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xviii
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xx
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xxiii
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xxiv
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xxv
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xxvi
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xxvii
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xxviii
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xxix
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xxx
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xxxi
Richard Michael Victorio, Internet Dispute Resolution (iDR): Bringing ADR into the 21st
Century, 1 22.
xxxii
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Stakeholders (Part 1), , https://www.mediate.com/articles/awiener4.cfm (last visited May 12, 2021).
xxxiii
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xxxiv
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xxxv
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xxxvi
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xxxvii
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xxxviii
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xxxix
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xl
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xli
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xlii
PONTE AND CAVENAGH, supra note 39.
xliii
BADIEI, supra note 6.

ADDITIONAL SITES REFERRED

1. Hein Online
2. Jstor
3. SCC Online
4. Manupatra