Is online arbitration feasible?
Firstly, most parties to the international commercial disputes have the requisite technical facilities to participate in the
on-line resolution of the disputes.
Secondly, if arbitration is conducted online, communication is the most important aspect. Nowadays, documents can be sent in electronic form such as by e-mail. But when it is deemed to be sent? And how to prove it? The United Nations Commission on International Trade Law (UNCITRAL) has completed its Model Law in 1996. It is intended to provide national legislators with a set of basic rules that would remove a number of existing impediments to the encouragement and growth of electronic commerce. Although it is not a treaty or convention, it has been enacted in whole or in part or used as the basis for legislation in some countries. Singapore enacted its Electronic Transactions Act 1998, and Australia has also enacted its Electronic Transactions Act 1999 (Cth). The United States of America has also prepared the Uniform Electronic Transactions Act (1999) for being approved by the states. China’s new Contract Law also includes some general provisions about electronic information transferring. The basic rules of these legislations are similar. All these legislations provide a legal framework for e-commerce as well as online arbitration.
Thirdly, some worry about security risks and authentication. The major impediment to the development of electronic commerceis the inherent security risk involved in transferring information over the Internet. It is the same to the online arbitration. When a message is sent over the Internet, any of the information may be intercepted, read and altered. There are two major concerns: first, identification integrity: you are who your signature says you are; and secondly, message integrity: you may have sent the message but has it been tampered with in between the time that it was sent by the sender and received by the intended recipient? These concerns create problems for both parties tothecommunication.
However , encryption techniques are now available to prevent this interference by encoding the relevant data. The primary purpose of public/private key encryption is to maintain message integrity in the sense that the message can be identified as having originated from the person with access to that private key, that is, identification integrity. To some degree it also protects the security of the information in transit, although it may be read by anyone, in addition to the addressee, who has the sender's public key. There are some other technological solutions based on encryption techniques. Secure Electronic Transactions (SET) protects the confidentiality of the transmission and ensures the authentication of the user. Secure Sockets Layer (SSL) is a protocol to provide security for Web transactions by encrypting packets of information transmitted to the Internet site. The digital or electronic signatures are principally concerned with ensuring message integrity. They ensure that the sender is the person whom they purport to be. Some countries have enacted their legislations on digital or electronic signatures.
In addition there are other general concerns about unauthorised access. The installation of a firewall will prevent unauthorised access to company data.
Fourthly, several dispute-resolution service providers are working on the development of on-line systems for administering dispute resolution, as well as courts in a number of countries. The World Intellectual Property Organization (WIPO) Arbitration and Mediation Centre has developed such an on-line system, which is Internet-based. Digital communication tools have been designed to allow the parties to file requests by completing electronic forms and to exchange information on-line through secure channels. The parties and the decision-maker are able to communicate electronically also through audio and video facilities, where these are available to them. The system also includes such functions as automatic notifications, an electronic fee system, secure facilities for the on-line exchange and reading of documents, and back-end databases to support the logging and archiving of submissions.
In fact, some organizations have already tried to conduct arbitration or similar procedures online. The WIPO recommended using on-line facilities to conduct the administrative dispute-resolution procedure on the domain name disputes. Based on the WIPO's recommendation, the Internet Corporation for Assigned Names and Numbers (ICANN) has approved four dispute-resolution service providers to conduct online dispute-resolution procedures.
What should online arbitration be?
To conduct arbitration online, the international commercial arbitration institutions should first adopt special online arbitration rules and develop online systems. All the arbitration institutions adopt similar arbitration rules. It needs to amend the existing rule slightly to conduct the online arbitration. Most of the modification should be concentrated on communication rules.
In our opinion, at the beginning stage of an arbitration case, the basic communication procedure should be as follows:
1. the complainant submits its complaint to arbitration institution through e-mail or other electronic forms;
2. the arbitration institution creates a sub-system (or channel) for this case in particular and nominate a case administrator, only the case administrator is entitled to enter the system and communicate with the parties and the arbitrators;
3. the case administrator informs the complainant and the respondent the system address and entry password, forward the
complaint to the respondent;
4. the parties select the arbitrators according to the arbitration rule, and the arbitration institution sets up the panel to
hear the case;
5.the administrator informs the arbitrators the system address and entry password.
Thus, the parties and the arbitrators can send documents to the special system of the arbitration institution, and the arbitration institution can send or forward relevant documents to them. But the parties should not communicate with the arbitrators directly. It shall be the responsibility of the sender to retain records of the fact and circumstances of sending, which shall be available for inspection by affected parties and for reporting purposes
When the panel is ready to hear the case, the case administrator informs the parties and the arbitrators the time and entry password to enter the conference system, such as teleconference system, videoconference system and web conference system. If in special circumstance, the parties require or the panel thinks it is necessary to here in-person, there should be such a hearing. If the parties agree to hear the case by e-mail, then it is unnecessary to have a conference and the hearing should be based on the documents.
At earlier stage, since the parties and their lawyers and arbitrators maybe are not expert in conducting arbitration online, there should be both existing rules and the special rules for online arbitration, and model arbitration agreement should be provided. Online arbitration rules only apply to the parties have selected the online arbitration and the e-mail address or other electronic communication measure are available. All the documents should be sent both online and via mail.
In conclusion, we think if arbitration is conducted online, the advantages of arbitration will be maximized, and the disadvantages will be minimized, and arbitration will play a more important role in international business. Actually, the relevant arbitration institutions are forwarding to this objective. The WIPO International Conference on Dispute Resolution in Electronic Commerce is in processing now, and online arbitration is one of the hot topics.
Footnotes:
1. http://www.iccwbo.or/arb/23htm
2. The Arbitrator Vol 14, No.3, Nov, 1995, pp. 169
3. Most International Chamber of Commerce (ICC) arbitrators these days last between 2 and 3 years. See III. a of "An Inside
View of the ICC Court" by Robert H. Smith in Arbitration International, 10/1, 1994.
4. Paul D. Carrington, Virtual Arbitration, OHIO State Journal on Dispute Resolution, Vol 15/3, 2000
5. For a historical study of the subject, see Lord Mustill, Arbitration: History and Background, 6 J. INT'L ARB. 43, 55
(1989)
WIPO, Final Report of the WIPO Internet Domain Name Process, THE MANAGEMENT OF INTERNET NAMES AND ADDRESSES: INTELLECTUAL
PROPERTY ISSUES, Para 211, available at http://wipo2.wipo.int/process1/report/finalreport.html .
6. Melissa De Zwart, Electronic Commerce: Promises, Potential and Proposals, available at
http://www.law.unsw.edu.au/unswlj/ecommerce/zwart.html
7. For example, the Digital Signature Act of 1999 of USA.
8. WIPO, Final Report of the WIPO Internet Domain Name Process, THE MANAGEMENT OF INTERNET NAMES AND ADDRESSES: INTELLECTUAL
PROPERTY ISSUES, Para 213, available at http://wipo2.wipo.int/process1/report/finalreport.html .
9. For example, WEBdispute.com?is one of the on-line dispute resolution services provider. It conduct online arbitration at
http://webdispute.com .
10. WIPO, Final Report of the WIPO Internet Domain Name Process, THE MANAGEMENT OF INTERNET NAMES AND ADDRESSES: INTELLECTUAL
PROPERTY ISSUES, Para 214, available at http://wipo2.wipo.int/process1/report/finalreport.html .
11. WIPO International Conference on Dispute Resolution in Electronic Commerce, November 6 and 7, 2000, available at
http://arbiter.wipo.int/events/conferences/2000