In the rapidly evolving landscape of dispute resolution in India, a paradigm shift is underway, driven by the transformative influence of technology on traditional arbitration practices. As we embark on this exploration, our focus is on the seamless integration of electronic evidence, virtual hearings, and online dispute resolution (ODR) platforms within the legislative framework of the Arbitration and Conciliation Act, 1996, and its subsequent amendments. This technological transformation is not merely superficial but penetrates the very core of arbitration processes, promising heightened efficiency, accessibility, and transparency. The intersection of technological advancements and legislative adaptations forms the crucible in which the future of dispute resolution in India is being forged. In an era characterized by the complexities of global commerce, the importance of arbitration as a dispute resolution mechanism has risen to paramount levels. As the wheels of international trade turn at an unprecedented pace and the intricacies of cross-border transactions become more intricate, the role of arbitration stands as a corner stone in ensuring efficient, timely, and fair resolution of disputes. (Gopal, 2023)
Electronic Evidence under the Arbitration and Conciliation Act, 1996:
Arbitration, designed as a swift and quasi-judicial mechanism for extrajudicial dispute resolution, stands as an alternative to traditional court proceedings. Parties, by mutual agreement, opt for arbitration, engaging a third-party arbitrator to adjudicate disputes. The jurisdiction of courts in arbitration is circumscribed, and the arbitrator’s award carries a weight akin to a court decree. Contrary to the general provisions of the Indian Evidence Act, 1872, which do not extend to arbitration proceedings, concerns have arisen regarding the applicability of Section 65B of the IEA. This section mandates fulfilling certain conditions for the admissibility of electronic records in court. The ambiguity on this matter persisted, partly due to the silence of the court on the issue and the constraints outlined in Section 1 of the Indian Evidence Act, 1872, excluding its application to arbitration proceedings. However, the recent case of Millennium School v. Pawan Dawar (O.M.P. (COMM) 590/2020) in the Delhi High Court has brought clarity to this uncertainty. The court explicitly stated that Section 65B of the Indian Evidence Act, 1872 does not find applicability in arbitration proceedings. This judicial pronouncement resolves the lingering doubt, affirming that the stringent requirements outlined in Section 65B are not mandatory in the arbitration context. (Admissibility of Electronic Records vis-à-vis Commercial and Arbitral Proceedings – Arbitration & Dispute Resolution – India, n.d.)
This decision is significant as it aligns with the distinct nature of arbitration as an independent adjudicatory process, separate from conventional legal proceedings. The ruling reinforces the notion that the procedural and evidentiary rules governing arbitration are not a mere replica of those applied in traditional courtrooms. Thus, parties engaged in arbitration can rely on electronic records without being encumbered by the specific prerequisites stipulated under Section 65B, ensuring a more streamlined and efficient arbitration process.
This evolution signifies a pivotal shift in the understanding and acceptance of electronic evidence, ensuring that the arbitration process remains relevant and adept in an increasingly digitized world.
Virtual Hearings and the Legal Framework:
The landscape of arbitration in India has undergone a transformative phase with the advent of virtual proceedings, a concept not explicitly addressed by the Arbitration & Conciliation Act, 1996 (“Arbitration Act”) or the 1985 UNCITRAL Model Law. Despite the absence of express provisions on remote hearings, the principles of party autonomy embedded in the arbitration process provide a foundation for adapting to the contemporary need for flexibility. A key advantage of arbitration lies in its inherent flexibility, allowing parties to tailor proceedings based on their preferences. While the Arbitration Act may not explicitly mention virtual hearings, various provisions offer a conducive environment for their integration. (Singhania et al., 2020)
Section 29B of the Arbitration Act introduces the concept of documents-only arbitration, facilitating an expedited process with limited oral hearings. In the current context, this provision can be leveraged through reliable electronic platforms to conduct arbitrations efficiently. Additionally, Section 19(2) grants parties the freedom to mutually decide on procedural aspects, paving the way for the inclusion of virtual proceedings in the absence of explicit prohibitions. In the absence of a mutual agreement, the arbitral tribunal’s authority, as outlined in Section 19(3), empowers it to determine the procedural aspects, including the manner of conducting the proceedings. Section 20(3) further emphasizes the tribunal’s discretion to meet at any place it deems appropriate, allowing for flexibility in choosing between physical and virtual settings for consultations, witness hearings, and document inspections. Section 24 of the Arbitration Act, while affirming the right to oral hearings, notably lacks a mandate for in-person attendance. The Supreme Court of India has acknowledged the equivalence of virtual hearings to in-person proceedings, highlighting their validity even in criminal cases. This observation strengthens the argument for the acceptance of virtual hearings in arbitration. Furthermore, Section 24 provides the arbitral tribunal with the authority to determine the length and scope of oral hearings, setting limits on arguments and specifying issues requiring evidentiary examination. This discretion enables the tribunal to adapt to the preferences of the parties, including the option for virtual hearings. (SCC Online, 2021)
In instances where one party advocates for virtual proceedings and the other opposes it, the arbitral tribunal, under Section 19(3) and Section 24, possesses the authority to direct remote hearings. The absence of an agreement between the parties allows the tribunal to mandate electronic discovery of documents, limiting the scope to essentials and ensuring due process. However, it is crucial for arbitral tribunals to uphold due process, guaranteeing both parties a fair and equal opportunity to present their cases. The incorporation of virtual hearings should be conducted judiciously, balancing the advantages of efficiency with the paramount importance of procedural fairness.
Online Dispute Resolution Platforms and Legal Recognition:
The legislative saga unfolds further with the advent of the Arbitration and Conciliation (Amendment) Act, 2019, introducing a progressive dimension to dispute resolution in India. While refraining from explicit delineation of ODR procedures, the Act, through amendments in Section 42A, implicitly recognizes the emergence of ODR mechanisms. The permissive language encourages parties to embrace ODR platforms, thereby signalling a legislative nod to the digital evolution of dispute resolution. This recognition positions ODR as a potent tool in the arbitration toolkit, providing parties with a flexible and expedited alternative for dispute resolution. As parties increasingly turn to these platforms, the legal framework demonstrates an openness to innovative methods of resolving disputes, transcending traditional boundaries. (THE ODR POLICY PLAN for INDIA DESIGNING the FUTURE of DISPUTE RESOLUTION, n.d.)
Challenges and Safeguards:
However, as we navigate this brave new world of technologically infused arbitration, challenges and potential pitfalls become evident. The delicate balance between technological progress and safeguarding the fundamental tenets of arbitration, such as privacy and data security, becomes a critical consideration. Through nuanced amendments, the Act endeavours to address these concerns by emphasizing confidentiality and introducing safeguards. The challenge lies in calibrating these safeguards to ensure a harmonious coexistence of technology and the robust principles that underpin the integrity of the arbitration process. It is essential to acknowledge that as technology advances, so do the challenges. Ensuring a robust legal framework to tackle these challenges becomes imperative for sustaining the credibility of arbitration in an era of rapid technological evolution.
In the crucible of technological advancement and legislative adaptation, the integration of technology, electronic evidence, virtual hearings, and online dispute resolution within the framework of the Arbitration and Conciliation Act, 1996, emerges not as a mere confluence of elements but as a transformative force reshaping the contours of arbitration in India. This dynamic interplay, while presenting its share of challenges, promises a future where arbitration is not only efficient and accessible but also resilient in the face of evolving global paradigms. As we traverse in this ever-shifting terrain, the commitment to a robust and adaptable regulatory framework ensures that the revolution in arbitration is not merely a momentary surge but a sustained evolution. In conclusion, the confluence of technology and arbitration is not a fleeting trend but a fundamental shift that necessitates continuous adaptation, both legally and technologically, to foster a dispute resolution need of the modern world.
Gopal, V. R. N. (2023, December 12). Harnessing the power of Artificial Intelligence in Arbitration: A comprehensive analysis of Indian jurisprudence. Bar and Bench – Indian Legal News. https://www.barandbench.com/law-firms/view-point/artificial-intelligence- arbitration-analysis-indian-jurisprudence
Admissibility Of Electronic Records Vis-À-Vis Commercial And Arbitral Proceedings – Arbitration & Dispute Resolution – India. (n.d.). Www.mondaq.com. Retrieved December 17, 2023, from https://www.mondaq.com/india/arbitration–dispute- resolution/1196120/admissibility-of-electronic-records-vis-%C3%A0-vis-commercial-and- arbitral-proceedings
Singhania, Singhania, C.-K., Singhania, S., & Vajpeyi, A. (2020, July 8). Virtual Hearings in arbitrations in India. Lexology. https://www.lexology.com/library/detail.aspx?g=1c85d10b-e340-4dc7-8dfa-72ec3832bd04
Choudhary, Aafreen (2021, October 28). Virtual Hearings in Arbitration: A Mirage or a Reality? SCC Blog. https://www.scconline.com/blog/post/2021/10/28/virtual-hearings-in- arbitration/
THE ODR POLICY PLAN FOR INDIA DESIGNING THE FUTURE OF DISPUTE RESOLUTION. (n.d.). https://www.niti.gov.in/sites/default/files/2023–03/Designing-The- Future-of-Dispute-Resolution-The-ODR-Policy-Plan-for-India.pdf
Authored By: Dr Mayuri Pandya Dean Faculty of Law School, GLS University