Online arbitration: A vehicle for dispute resolution in Electronic commerce

Posted by M. Saleh Jaberi on March 06, 2011

<< Previous

1. Opposite parties announce their consent by referring their dispute to arbitration by email. 2. The second approach, which is more common nowadays, is that websites whichsell goods and services put an arbitration clause in the “terms and conditions ”section of their web sites. In this part consumers can declare their consent by clicking “I agree” or “I accept” button in a pop-up box on computer screen. 3. The third approach is what is cited in the UNCITRAL Modal Law, in which parties in the cyberspace, refer their dispute to a document containing an arbitration clause.The onset point of arguments about the validity of arbitration contract is where many arbitration codes declare “in writtenform” as a necessary issue. Therefore, this question is posed whether an arbitration contract which is made in the cyberspace and doesn’t have the traditional concept of “writing”, is valid or not?

These arguments become more intensive where the New York Convention, which has the worldwide fame on enforcement of foreign arbitration awards, provides in the Article II that “Each contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship”. In the second part of Article II, this Convention cites “The term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement signed by the parties of contained in an exchange of letters or telegrams”. In another word, this convention has not implied to electronic form as a method of concluding an arbitration contract.

Different kinds of solutions have been expressed for this problem: 1. As what was said before, one method for concluding the arbitration contract is referring to another document which contains an arbitration clause. Some experts believe that one way for solving “in written form” problem of electronic contract is using this method. In other words, parties just declare their reference electronically and main document which contains arbitration clause is in writing. This method can mostly solve the problem and can be useful in business to business relationships; however, this style needs previous agreement between parties which is not common in the contemporary commercial world and in business to consumer relationships.

2. Another resolution says that New York Convention is an old document and communication devices which are cited in it fits with that time. Therefore, the argument about this convention which doesn’t contain electronic communication is pointless. On the other hand, the many countries’ Code in which electronic contracts are valid, do not imply the electronic method directly. Some other experts think that clicking“I agree with arbitration clause” button in web sites which sells goods is like transferring information by letter or telegram. Therefore, they believe that using this method can secure New York Convention purpose. Dependency of this issue on contracting states is another theory which is said for solving this problem. In the other words, if the country which is asked for enforcing arbitration award has recognized electronic contracts, these contracts is valid there otherwise they are not.

Generally speaking, we can say that in a few countries, adopting these kinds of contract needs modern legislation and in some others needs free interpretation. About New York Convention we should say that, methods which are cited in it are not limited, and it is possible to accept the validity of electronic contracts by amore flexible interpretation.

B: consent and security in electronic arbitration contract. Another issue which is emerged in the context of electronic arbitration contract is consent of parties in arbitration clause and security of these kinds of contracts.

Some experts believe that New York Convention did not imply to electronic method because not only other methods for declaration of consent in order to refer of disputes to arbitration is not precise but also these kinds of contracts are not secure enough.So the question which is posed in this field is how a person can announce his consent for concluding an arbitration contract just by sending an email or clicking one button?! To answer this question we should say that, nowadays electronic signature which isadopted in many countries is asign for parties’ consent in arbitration contract or arbitration clause. When a person adds electronic signature into an email, his consent is obvious and it’s not different mostly by the time that he sings a deed by his hand. However, this issue is a bit more complex when a contract is concluded in commercial web sites. In I. Lan systems, Inc. v. Netscout Service Level Corp) on 2 January 2002, judge of a court in the United States decided that clicking “I agree with contract” button when a software is bought in the internet is like accepting arbitration when the contract is contained that clause. He was cited that choosing this option has the same meaning with accepting this kind of arbitration behalf of the buyer.In another case (Lieschke, Jackson & Simon v. RealnetworksInc) the claimants maintained that they had not been able to consent to an arbitral clause buried among the general conditions posted on the computer screen. The judge refused this claim and cited that the arbitration clause was perceptible and it didn’t need to be highlighted.However, some experts are still worried and believe that buyers may lose lots of their legal rights by choosing “I agree” option because of being unknown about arbitration clause.

Read more »

    Features Gallery

    Join   Benefits   In the News   Registration
    Login   Benefits   Registration  Security
   Join   Benefits   In the News   privacy

Company Overview

e-Court Legal Services International LLC ( hereafter referred as e-Court ) has been filed with The State of Delaware on March 27 2010 under number 100324773. The company is an independent group of experienced professionals like (former) lawyers, barristers, solicitors or attorneys, judges, university professors, industry and other legal interest groups. e-Court aims to provide competent, affordable, secure, transparent and speedy justice for everyone.

Contact Us

Copyright  Registration Mobile  **Member Login Login YouTube ** Blog** Facebook **
Linkedin ** Twitter **

Address:Wilmington, DE 19801, USA
Telephone: +1-613-761-8625