The internet has truly emerged as a real global, borderless market place where anyone having access to a computer linked to the World Wide Web may participate in some sort of international commercial transaction. Commerce inspired by high technology has now transformed itself into electronic commerce and the internet has become a new, fast-developing means of communication and a new business tool.1 Nigeria is not left out of this innovation as so many business organisations have resorted to doing business online. For example, organisations like Jumia, Dealdey and Konga has made life so easy for Nigerians through their online supermarket. 2 Now, one can relax in the comfort of his/her home and at any time transact business online with a very good bargain and also have their goods delivered to them at their door step. With this new form of transactions method came up new types of disputes. 3 Thus, it has been noted that the sheer volume of transactions that are carried out over the internet, along with expectation of users for remote, impersonal and efficient communication, has rendered traditional and litigation or court-annexed dispute resolution processes ill-suited to address the resulting disputes. Thus, the need for a more suitable method brought the electronic medium of settling the simple-complex mode of transaction that has an element of technological advancement inherent in it.
Cyber-arbitration (also known as electronic arbitration, onlinearbitration,cyberspace arbitration, virtual arbitration, or arbitration using online techniques) is an Alternative Dispute Resolution method (ADR), and precisely an Online Dispute Resolution technique (ODR).4 Cyberarbitration (E-arbitration) has been defined as a method to settle disputes through online platforms providing arbitration services. It is a new dimension of dispute resolution mechanism between economic agents through the use of information and communication technology. Cyber-arbitration or E-Arbitration is inseparable from the growth of e-commerce and cross-border trade transactions.
It is pertinent to note that the online arbitration has been on the high demand and has also been attractive in recent times due to its non-judicial way to settle disputes, as well as the use of electronic, technological, and innovative means to go about the process by appointing an arbitration panel vested with a binding authority and conducting the process, at least partly, on virtual platforms using the Internet. 5 It has been noted that the use of information and communication technology (ICT) in cyber-arbitration service is not only an assisting tool but an essential one to the administration and functioning of the process. Many websites already provide for an online user-friendly arbitration service that allows two or more parties to resolve business or individual disputes through experienced online arbitrators, such as: arbfile.org, netarb.com, onlinearbitrators.com and many more. In addition, there have been many attempts to initiate E-arbitration projects; some of which were successful such as the Cyber-Tribunal at the University of Montreal (Canada 1996) or WIPO (World Intellectual Property Organization- Switzerland 1967) and others with limited scope such as the Virtual Magistrate VM at the Villanova University School of Law (USA 1996).6
The Procedure for Cyber-Arbitration
It is important to note that the procedure adopted in Online Arbitration is similar to the offline Arbitration, the major difference here lies in the fact that former takes place on the internet. One of the leading online arbitration provider is known as “internet ARBitration”. This online-arbitration entity known as internet-ARBitration (net-ARB), allows parties to file their cases free of charge. It prides itself as a world leader in low-cost arbitration. 7 Other thriving online arbitration institutions are FINRA,8 onlineARBITRATION.net,9 and eQuibbly.10
The Scope of Cyber-Arbitration
The scope of online arbitration providers as it relates to their jurisdiction on matters that can adjudicate on, covers disputes involving e-commerce, domain issues, intellectual property matters and money claims. The online arbitration providers have a list of qualified arbitrators, who has got the requisite experience needed to help people settle claims brought before them amicably.
Procedure for instituting Actions in Cyber-Arbitration
The following are the points to note in Cyber-arbitration procedure:
1. A Claimant who intends to institute an action under the Cyber-Arbitration Tribunal is expected to prepare a Statement of Claim which comprises of facts with regards to the issue he/she wants to resolve with online Arbitration procedure.
2. The Claimant is expected to file the prepared Statement of Claim with the Online Dispute Resolution provider specifying relevant facts and remedies requested. It is to be noted that the claim is filed at the website of the chosen ODR provider. However, the Cyber-Arbitration entity knows as OnlineARBITRATION.net gives a condition precedent to the party filing the arbitration process to provide the telephone number, contact representative and email address of the adverse party and his representative. It is important to state that failure to meet this condition may result in the case being dismissed or a decision vacated.11 Furthermore, a filing a statement of claim attracts a fee. Filing fees depends on the ODR provider and also the nature of the claim.12
3.Where prior to the dispute, parties have agreed to resolve their disputes via online arbitration, the said agreement shall also be submitted along with the claim.
4. The documentary evidence pertaining to the facts stated in the claim may also be submitted. Thus, the said documentary evidence can be scanned and attached to a box provided by the Online Dispute Resolution provider when initiating a claim. It can also be sent via email.
5.The monetary claim or reliefs of the Claimant must be stated in the Statement of Claim, though the onlineARBITRATION platform has provided that the claim of the claimant must be at least $5,000 (five thousand dollars).13
6. As soon as the claim is lodged at the website of the Online Dispute Resolution provider, the ODR provider is expected to contact the Respondent informing him of the initiated claim through the email provided by the Claimant and he is to persuade the Respondent to consent.
7. Once the respondent consents to online arbitration the Respondent is expected to respond to the arbitration claim by filing at the website of the Online Dispute Resolution provider, an answer specifying the relevant facts and available defenses to the claim.14
8. After settlement of pleadings, both parties (claimant and respondent) are expected to select an arbitrator from the list of potential arbitrators accredited by the ODR provider they have agreed to refer their disputes to.
The names of these arbitrators are usually displayed on the website of the chosen ODR provider. The choice of arbitrators will be done by parties and communication as to choice of mediators will be done through exchange of emails.
9. Parties may elect to agree on the seat of Arbitration as they deem fit.
10. A date for proceedings is to be scheduled where parties are allowed to give their testimonies and tender their evidences through the online platforms.
11. After the hearing of the proceedings, the arbitrators are expected to review all the evidences tendered and issues an award via electronic means.
12. The successful party thereafter takes steps towards enforcing the award.
Jabiri has provided three modes on how online arbitration agreement can be concluded:15
a. Opposite parties announce their consent by referring their dispute to arbitration by email.
b. Websites selling goods and services put an arbitration clause in the ‘terms and conditions” section of their websites. In this part consumers can declare their consent by clicking “I agree” or “I accept” button in a pop-up box on computer screen.
c. The third mode is cited by the UNCITRAL Model Law, in which parties in the cyberspace, refer their disputes to a document containing arbitration clause.
During the hearing phase, all testimonies and evidence are given either by email or video conferencing depending on the choice of the parties, arbitrators or ODR provider. 16
Use of the video-conferencing is the most common method in online arbitration. By this device (videoconference), not only parties can be heard and seen easily but also testimonies of witnesses can be taken.17
It is important to state that the technology of video-conference is not only used in online arbitration or any of the ODR mechanism. Both litigation has subscribed to videoconference.
For instance the rules of civil procedure in England, Wales, and the US, allow for the use of video-conference during hearing under certain circumstances.18 It is important to note also that the Lagos State High Judiciary is working towards implementing online hearing into its rules.
Conditions for Online Arbitration
There can be three possible situations for submitting or referring a claim, dispute or difference to an online arbitration. 19
1. It must be an e-contract containing an online arbitration clause.
2. It must be a written contract providing for online arbitration
3 It must have a reference to online arbitration after the dispute has arisen.
The agreement of the parties to refer their disputes to the decision of the arbitral tribunal must be intended to be enforceable by law and hence, it must satisfy the requirement of enforceability as prescribed by Section 10 of the Contract Act, 1872 with a clear intention of entering into a legally binding relationship and parties must be ad-idem.
Arbitration Agreement has been defined under Section 7 of the Arbitration and Conciliation Act, 1996. If an online arbitration clause passes a test of Section 7 then it is deemed to be a valid arbitration clause. Exchange of letters, telex, telegrams or “other means of telecommunication” should signify an active assent by both parties and a demonstrable meeting of minds as to the arbitration agreements.20 Whether any agreement entered into through such other means of telecommunication is enforceable? What would be included in such other means of telecommunication?
Can exchange of emails embodying an agreement to arbitrate be covered under Section 7?
The e-mail exchange may also refer to a separate written arbitration agreement (“incorporation byreference”). The parties may also wish to reach agreement through a website. In such case, an exchange of electronic communications occurs through the parties browser software. Either method (e-mail or website) will ultimately lead to the same question as to whether an electronic communication provides a required record of the agreement.
The answer was given in affirmative by the Honourable Supreme Court in the case of Trimex International FZE Ltd. v. Vedanta Aluminium Ltd (2010) 3 SCC 1. In this case, the Petitioner submitted commercial offer through email for supply of bauxite to Respondent. Respondent conveyed acceptance of offer through e-mail and the Parties entered into contract. The Contract contained an Arbitration Clause for resolution of disputes between the parties. Thereafter, Respondent refused to honour contract on the ground that there was no concluded contract between the parties and the parties are still not ad idem in respect of various essential features of the transaction. It was held by the Honourable Court that if the intention of the parties to arbitrate any dispute has arisen in the above offer and acceptance thereof, the dispute is to be settled through arbitration. Once the contract is concluded, the mere fact that a formal contract has to be prepared and initialled by the parties would not affect either the acceptance of the contract so entered into or implementation thereof, even if the formal contract has never been initialled.21
Needless to state that Section 4 of the Information Technology Act, 2000 renders legal recognition of such electronic transfer of communication which is admissible as evidence. Though, e-commerce laws have “legitimized” electronic communications in the light of traditional paper-based legal requirements, it does not mean that the controversies about arbitration agreement concluded online completely disappeared. Nor could one assume that every arbitration agreement concluded by an exchange of e-mails or electronic data interchange will be valid. The means of telecommunication applied must satisfy certain conditions, i.e. provide the agreement’s record that is “accessible so as to be usable for subsequent reference”.22
Advantages of Online-Arbitration
1. Speed: In Cyber-Arbitration, the communication process takes place through an electronic means which makes the process faster than the traditional Arbitration which may take a very long time before desired result is achieved. Thus, the electronic means makes the procedure simple thus making the process faster. In most cases, the whole process can be completed within
just a few days after both sides sign the Agreement to Arbitrate.
2. Saving of time and costs: As all the communications are done through the internet, there is no need to travel to different locations in order to present evidences, documents, or attend hearings; as a result, the time and costs that are normally implied in an arbitration will be reduced. 23
3. Easy access: parties in cyber-arbitration can get easy access to the procedure content and they should be able to present any material from their home or office at any hour on any day.24
4. Delocalization: The online arbitration process is delocalized, meaning that parties can act from any part of the world without being bound to any specific local legislation. The arbitrators do not need to be in the same geographical location, as they can discuss the award and other issues via teleconferencing.
5. Flexibility: Parties can also decide on creating a more flexible procedure, setting such stages and deadlines as they deem convenient. Parties can also select the law pursuant to which the dispute will be solved; for instance, current legislation allows arbitrators, if agreed upon by the parties, solve ex aequo et bono.25
6. It encourages International Trade: ODR especially arbitration aids international trade by eliminating the geographic obstacles to justice. Email discards the extremely cumbersome need for in-person meeting and constant battling with time zone restrictions.
Conclusion
The concept of cyberspace arbitration is indeed a welcomed innovation especially for online users and those involved in e-commerce. Cyber-arbitration is an Alternative Dispute Resolution mechanism which is conducted primarily through the use of electronic means of communication. As can be gleaned above, Cyber-Arbitration present some landmark advantages in comparison with traditional arbitration and other ADRs, as it is a fast, economic and effective way to solve a dispute. Cyber-arbitration may constitute an ideal vehicle to solve disputes arising from e-commerce transactions as it provides the disputants with a procedure which may be conducted without their physical presence, saving them time and money, and with a final arbitral award which is binding and rendered by an impartial expert on the subject of the dispute. It is important to note that it provides variety of electronic means of communication for the conduction of the procedure. It is important to state that the most efficient and convenient device should be used by disputant to arrive at a just conclusion. It is recommended that potentials under the cyber-arbitration can be harnessed towards the speedy dispensation of justice in Nigeria, due to the fact the electronic means of communication is more convenient than the traditional method of conducting traditional proceedings. Thus, it is recommended that Nigeria borrow a leaf from the modern method of settling dispute as adopted in advanced countries so as to enable her harness the potentials under the electronic mode of settling disputes, thus reducing the number of cases in our traditional courts.
Rufus Adeoluwa Olodude, Esq.
Lead Counsel, Achieversworld & Partners
Barristers, Solicitors, Researchers and Publishing Consultants
Email: achieversworldandpartners@gmail.com
Tel: +2347039297390
References
Biukovic, L., 2002, International Commercial Arbitration in cyberspace: Recent Developments, Northeastern Journal of International Law and Business, vol. 22: Issue 3. Available at
http://scholarlycommons.law.nortwestern./edu/njilb/vol22/iss3/20 (last visited on 14th December, 2014). op.cit. p. 340.
2 Nwandem O.V.L, Online Dispute Resolution: Scope and Matters arising available at Electronic copy available at: http://ssrn.com/abstract=2592926 accessed on April 4, 2018
3 Thompson, D., 2014, “The Growth of Online Dispute Resolution and its use in British Columbia”. Available at https://www.cle.bc.ca/PracticePoints/LIT/14-GrowthODR.pdf (last visited on 21st December, 2014).
4Mira Fayad and Habib Kazzi, Electronic Arbitration in Lebanon: Overview and Trends available European Scientific Journal March 2015 edition vol.11, No.7 available at https://eujournal.org /index.php/esj/article/download/5304/5113 accessed on April 7, 2018
5Mira Fayad and Habib Kazzi, Electronic Arbitration in Lebanon: Overview and Trends available European Scientific Journal March 2015 edition vol.11, No.7 available at https://eujournal.org /index.php/esj/article/download/5304/5113 accessed on April 7, 2018
6 ibid
7Internet-ARBitration: How net-Arbitration Works. Available on http://www.net-arb.com/howarbitration_
works.php (last visited on October 29, 2018).
8http://www/finra.org.
9http://www.onlinearbitration.net
10https://www.equibbly.com.
11 Section 1, Online ARBITRATION Process Rules. Available on www.onlinearbitration.net.
12 Parties initiating claims under net-ARB will file claims free of charge as filing fees under net-ARB has been completely eliminated
13 See Section 2-2 Online ARBITRATION Process Rules
14 FINRA: Arbitration Process. Available at www.finra.org/ArbitrationAndMediation/Arbitration/Process/ (last
visited on 20th December, 2014).
15 Jaberi M.S., Online arbitration: A vehicle for dispute resolution in Electronic Commerce. p.4 Available on www.academic.edu/1842719/online_Arbitration_A_Vehicle_for_Dispute_Resolution_in_Electronic_Commerce (last visited on 26th December 2014)
16 Net-ARB recommends evidence and testimony to be given via email.
17 Jaberi M.S., op. cit, p. 10
18 See Civil Procedure Rules Part 36, Rule 32.3 or PD 23 by leave of the court, or the US Federal Rules of Civil procedure: Fed. R Civ. P. 43(a), “The court may for good cause shown in compelling circumstances and upon appropriate safeguards, permit presentation of testimony in open court by contemporaneous transmission from a different location. Also see Hornle J, 2003; Online Dispute Resolution – The Emperor’s New clothes? Benefits and pitfalls of online Dispute Resolution and its Application to commercial Arbitration. International Review of Law 17(1)p.4.
19 Rafal Morek, “Online Arbitration available at http://www.odr.info/Re%20greetings.doc accessed on October 29, 2018
20 Shakti Bhog Foods Ltd. V. Kola Shipping Ltd., AIR 2009 SC 12
21 Rafal Morek, “Online Arbitration available at http://www.odr.info/Re%20greetings.doc accessed on October 29, 2018 p.2
22 Ibid @ p. 2
23 Pablo Vera Prendes, Online Arbitration, Law and Technology, Tilburg University, LL.M Thesis
24 Gabrielle Kaufmann-Kohler, Schultz, Thomas, Online dispute resolution, op. cit,, p. 68.
25 Article 28 of the Model Law.
