Online Dispute Resolution (ODR): the use of online

mechanisms by arbitration institutions and of ODR in

cross-border consumer disputes

Johan Billiet

Association for International Arbitration Billiet & Co

November 21-22, 2013

Traditional arbitration

facilitated by means of IT facilities

Online arbitration

Distinguish

ICC – NetCase

AAA – WebFile

The ICDR Manufacturer/Supplier Online Dispute Resolution Protocol

Electronic file management

procedural framework - due process,

confidentiality, and the seat of arbitration

award - formal requirements, binding nature, and enforcement and public policy

Legal obstacles to the use of online arbitration

Belgium Lithuania

Trust marks

The trader will not encourage minors to order

products/services If a complaint against a member is considered valid,

the trust mark can impose one (or several of the following penalties:

Warning Blame Fine (minimum 1000 Euro and maximum 50 000 Euro) Suspension of membership Exclusion

Criteria and code of conductBeCommerce, Belgium

WIPO Arbitration and

Mediation Center

CPR Institute for Dispute Resolution & Modria

Current Developments 

UNCITRAL - draft Rules on online dispute resolution in cross border electronic transactions EU- Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes bring for consumers and traders- Regulation No 524/2013 of the European Parliament and of the Council of 21 May 2013 on online dispute resolution for consumer disputes

ODR in cross-border consumer disputes

UNCITRAL aims to develop a global online dispute resolution system for the resolution of low-value high-volume cross-border disputes, both B2B and B2C.ODR framework will consists of the following documents which form part of the Rules: Guidelines and minimum requirements for online

dispute resolution providers; Guidelines and minimum requirements for neutrals; Substantive legal principles for resolving disputes; Cross-border enforcement mechanism.

Task of the Working Group III

Applicable to B2B and B2C; Rules have contractual nature and will not

supersede national mandatory laws; domestic laws invalidating pre‐dispute arbitration clauses in consumer contracts would be applicable; A “two-track” set of Rules.

Main features of the Draft UNCITRAL ODR Rules

The Rules include different sets of provisions depending on whether the consumer’s domestic law would permit a pre-dispute arbitration agreement to be binding upon that consumer.

Track I: Binding Option

Ends in a binding arbitration stage (all parties would be bound by the final award where the applicable domestic law so permitted).  Track II: Non-Binding Option  neutral makes a recommendation which is non-binding unless parties otherwise agree (proceedings would not end in arbitration for any party)

Proposed structure: a “two-track” set of Rules

Purchasers will need to provide two simple pieces of information: their shipping or billing address; whether they were a consumer. + an Annex to the Rules to identify “Group I” and “Group II” jurisdictions and a definition of “consumer”.a vendor’s website will automatically offer the appropriate dispute resolution clause to the prospective purchaser.

How to determine which track is the right track?

‘To ensure trust in ADR procedures’ is a leitmotif of the EU legislator.  Main goals: to integrate the ADR mechanisms already existing in various

Member States and to make them function more effectively across the borders;

to strengthen the existing harmonised EU consumer protection rules;

to bolster due process standards in consumer ADR.  No detailed set of procedural rules the EU prefers to create ADR schemes and networks of ADR schemes, which will co‐operate and function across borders, instead of creating one international ADR scheme with the ambition of global operation.

Main features of the EU approach

‘To ensure trust in ADR procedures’ is a leitmotif of the EU legislator.  Main goals: to integrate the ADR mechanisms already existing in various

Member States and to make them function more effectively across the borders;

to strengthen the existing harmonised EU consumer protection rules;

to bolster due process standards in consumer ADR.  No detailed set of procedural rules the EU prefers to create ADR schemes and networks of ADR schemes, which will co‐operate and function across borders, instead of creating one international ADR scheme with the ambition of global operation.

Main features of the EU approach

It applies to: a) consumer disputes,b) disputes between a consumer residing in one of the 27 EU member statesc) an enterprise that is registered in the Belgian Register for companies or vice versa

Belmed

The resolutions/protection

model (eBay, Amazon) The chargeback model (credit

cards) The escrow model (TaoBao,

Alibaba)

How do companies use ODR?

Thank you!