online dispute resolution international application and lessons for vietnam

MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY

MASTER THESIS

ONLINE DISPUTE RESOLUTION:
INTERNATIONAL APPLICATION AND LESSONS
FOR VIETNAM

Specialization: International Trade Policy and Law

FULL NAME: NGHIEM LY TIN

HANOI - 2020


MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY

MASTER THESIS

ONLINE DISPUTE RESOLUTION:
INTERNATIONAL APPLICATION AND LESSONS
FOR VIETNAM

Specialization: International Trade Policy and Law
Code: 8310106

FULL NAME: NGHIEM LY TIN

SUPERVISOR: DR. HA CONG ANH BAO

HANOI - 2020


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TABLE OF CONTENT
REASSURANCE ................................................................................................... 1
ACKNOWLEDGEMENT..................................................................................... 2
LIST OF ABBREVIATIONS ............................................................................... 3
LIST OF FIGURES ............................................................................................... 5
SUMMARY OF THESIS RESEARCH RESULT ............................................... 6
INTRODUCTION ................................................................................................. 7
1. Research rationale ........................................................................................... 7
2. Literature review ............................................................................................. 9
3. Research objectives ....................................................................................... 12
4. Research questions ........................................................................................ 13
5. Scope of research .......................................................................................... 13
6. Methodology ................................................................................................. 14
7. Research disposition ...................................................................................... 14
CHAPTER 1: FUNDAMENTAL FRAMEWORK............................................ 15
1.1. History of Online Dispute Resolution ......................................................... 15
1.2. Online Dispute Resolution and characteristics ............................................ 18
1.2.1. Definitions........................................................................................... 18
1.2.2. Characteristics ..................................................................................... 21
1.3. Methods of Online Dispute Resolution ....................................................... 22
1.3.1. Group of fundamental methods ........................................................... 22
1.3.2. Group of compound methods .............................................................. 28
1.3.2.1. E-Mediation-Arbitration (E Med-Arb) ............................................ 28
1.3.2.2. Ombudsman .................................................................................... 28

1.3.2.3. Online juries/mock trials ................................................................. 29
1.4. Advantages and Disadvantages of ODR application ................................... 30
1.4.1. Advantages of ODR ............................................................................ 30
1.4.2. Disadvantages of ODR ........................................................................ 35
1.5. Basic conditions for ODR implementation ................................................. 39
1.5.1. Awareness and trust to ODR ............................................................... 39


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1.5.2. Legal regulations ................................................................................. 40
1.5.3. ICT platform ....................................................................................... 40
CHAPTER 2: INTERNATIONAL APPLICATION ON ONLINE DISPUTE
RESOLUTION .................................................................................................... 41
2.1. Application on ODR in European Union .................................................... 41
2.1.1. Legal framework of ODR in EU .......................................................... 41
2.1.2. Practical application in European Union .............................................. 45
2.2. Application on ODR in North America ...................................................... 48
2.2.1. Legal framework of ODR in North America ........................................ 48
2.2.2. Practical application in North America ................................................ 49
2.2.2.1. Government Initiatives in ODR ....................................................... 50
2.2.2.2. ODR Professional Organizations .................................................... 53
2.3. Application on ODR in China..................................................................... 58
2.3.1. Legal framework of ODR in China ...................................................... 58
2.3.2. Practical application in China .............................................................. 59
2.3.2.1. ODR and Domain Names Disputes: The ADNDRC ......................... 61
2.3.2.2. ODR and the CIETAC Online Dispute Resolution Center ............... 61
2.3.2.3. The HKIACODR Initiative .............................................................. 63
2.3.2.4. Other Initiatives .............................................................................. 64
2.4. Evaluations and future of ODR ................................................................... 65

CHAPTER 3: APPLICABILITY AND PERSPECTIVE OF ONLINE
DISPUTE RESOLUTION IN VIETNAM.......................................................... 67
3.1. Statement of Online Dispute Resolution in Vietnam ................................... 67
3.1.1. Factors for ensuring ODR application in Vietnam ............................... 67
3.1.2. The necessary of application ODR in Vietnam .................................... 69
3.1.3. Current situation of conditions to apply ODR in Vietnam .................... 72
3.1.2.1. Current situation of ODR in Vietnam .............................................. 72
3.1.2.2. Advantages and opportunities ......................................................... 74
3.1.2.3. Disadvantages and reasons ............................................................. 77
3.2. Suggestions and solutions ........................................................................... 78
CONCLUSION .................................................................................................... 82
LIST OF REFERENCES .................................................................................... 83


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REASSURANCE
I hereby assure that this master thesis is exclusively made by myself and that all
data and results stated in this master thesis are honest.
In addition, I hereby assure that all of the supports in the process of
implementation cited in the master thesis have been specified its sources.
Author

Nghiem Ly Tin


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ACKNOWLEDGEMENT
First and foremost, I would like to express my sincere gratitude to my

supervisor, Dr. Ha Cong Anh Bao for his enthusiastic support of my graduation
master thesis, with patience and knowledge. Hardly could I complete my work
without his fascinating guidance and suggestions throughout the past five months.
Beside my advisor, I would like to thank all professors and lecturers in Foreign
Trade University, especially lecturers in Master Program of International Trade
Policy and Law (MITPL), who spent all their enthusiasm and dedication to bring
knowledge to us. The result acquired in the learning process is not only necessary for
me to complete my thesis, but also help me be more confident to improve my career
in the outside world.
My special thanks also is for my family, friends and my classmates for their
encouragement and spiritual supports they gave me in the whole time of composing
one of the most important and meaningful work in my life.
Hanoi, 09 July 2020

Nghiem Ly Tin


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LIST OF ABBREVIATIONS

ADNDRC

The Asian Domain Name Dispute Resolution Center

ADR

Alternative Dispute Resolution

B2B

Business to Business

B2C

Business to Consumer

C2C

Consumer to consumer

CAGR

Compound Annual Growth Rate

CIETAC

Economic and Trade Arbitration Commission

CNDRP

CNNIC Domain Name Dispute Resolution Policy

CNNIC

China Internet Network Information Center

CPTPP

Comprehensive and Progressive Agreement for TransPacific Partnership

CRDP

The Center for Research in Public Law

DNDRC

Domain Name Dispute Resolution Center

ECC-NET

European Consumer Centers Network

E-commerce

Electronic commerce

EEA

European Economic Area

EU

European Union

EVFTA

Vietnam Free Trade Agreement

FTA

Free Trade Agreements

GDP

Gross Domestic Product

HKDNR

The Hong Kong Domain Name Registration Company
Limited

HKIAC

The Hong Kong International Arbitration Centre

ICANN

The Internet Corporation for Assigned Names and Numbers

ICT

Information & Communication Technology


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IT

Information technology

KIDRC

Korean Internet Address Dispute Resolution Committee

KLRCA

NADRAC

The Kuala Lumpur Office operated by the Kuala Lumpur
Regional Center for Arbitration
The Australia National Alternative Dispute Resolution
Advisory Council

NCAIR

The National Center for Automated Information Research

NCTDR

The National Center for Technology and Dispute Resolution

OAS

Organization of American States

ODR

Online Dispute Resolution

PPP

Purchasing Power Parity

RCEP

Regional Comprehensive Economic Partnership

SDRCC

The Sports Dispute Resolution Center of Canada

SMEs

Small and medium-sized enterprises

TDRP

Transfer Dispute Resolution Providers

TLD

Top level domain names

UDRP

Uniform Domain-Name Dispute-Resolution Policy

UNCITRAL

United Nations Commission on International Trade Law

USA

United States of America

USD

United States Dollar

WTO

World Trade Organization


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LIST OF FIGURES
Figure 01: The process on the ODR platform .................................................... 42
Figure 02: Complaints summited per month in two years of ODR platform
implementation ................................................................................. 46
Figure 03: Structure of complaints under regional levels and product ranges ..... 47
Figure 04: Vietnamese Internet users ................................................................. 67
Figure 05: Smartphone penetration rates in Vietnam ......................................... 68
Figure 06: Structure of retail market in Vietnam................................................ 69


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SUMMARY OF THESIS RESEARCH RESULT

In the circumstance of global and regional integration, E-commerce is
expanding in Vietnamese society as the major mode of purchasing. Online dispute
resolution (ODR) seems to be the most suitable method to solve conflict arise from
E-commercial activities and other businesses in the digital era. However, currently
the full awareness of ODR and related issues still are strange with most of parties
who join ODR implementation including government, enterprises and consumers.
The Master thesis with topic of “Online dispute resolution: International
application and lessons for Vietnam” concentrates on analyzing and consolidating
ODR definition and characteristics with practical lessons from some foreign countries
with legal challenges, along with supplying recommendation on applying ODR in
Vietnam situation to bring a vision and opinion of the author based on academic
aspect. The recommendations and solutions found in the thesis hopefully are going
to contributes a little to ODR development and growth in Vietnam.


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INTRODUCTION
1. Research rationale
Conflict is a growth industry (Fisher 1991, pg. 18).
The invention of E-commerce transactions changes the essence of the social
habits of business entities and individuals. E-commerce moves the traditional
commercial social environment from and industrial economy where machines
dominated productivity, to an information-based economy where intellectual content
is the dominant source of value added and there are no geographic boundaries. In
particular, it provides small and medium-sized enterprises (SMEs) with lower market
entry cost and the ability or possibility to extend geographic reach to a much large
market. It will undoubtedly improve economic efficiency, competitiveness and
profitability (Faye. Wang 2010, pg. 6).
New opportunities are always paralleled by new challenges in any form of

technology, economy and society. IT brings the benefits of efficient cross-border
commercial transactions but challenges the essence of the traditional laws and the
knowledge and technique of traditional law makers and practitioners. Legislators,
judges, lawyers and practitioners need insight into the operation of this new and
rapidly expanding industry with sufficient cross-disciplinary knowledge, experience
and skills. In the paper-based world, connecting factors, such as the place of domicile,
the place of business and the place of performance, are used to determine jurisdiction
and choice of law. When contracts are concluded and performed by electronic means,
those factors become blurred. The determination of private international law in
cyberspace requires legal experts to have special knowledge about IT systems and to
interpret new and existing legal concepts for the online environment.
Every year, thousands of multinational companies are emerging in the world,
constantly expanding sales and production internationally through the Internet. This
is largely seen as the key to growing the economy and stimulating globalization.
Transactions in a global market increase the probability of trans-national disputes.
Moreover, parties situated sometimes in different continents are often opposed over


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small claims. However, when disputes arise, traditional dispute resolutions become
problematic because different countries have different rules for trade and various
prohibitive costs of legal action across jurisdictional boundaries. Moreover, for
traditional dispute resolutions, the appropriate forum is determined by the place of
business or the place of performance. In cyberspace, the localization factor can be
much less obvious as the boundless internet may be accessed from anywhere in the
world.
E-commerce, a new determinant of commercial transaction via cyberspace,
commenced since 1980s under the simplest form as credit card, ATMs of banks, or
initial electronic contracts. Nevertheless, E-commerce only developed disruptively

and popularized since 1990s when the Internet was invented. As the result, the
conflicts arose from E-commercial activities have increased, pressured to the national
legal system and related authorities. Courts and ADR, such as negotiation, arbitration
and other combined resolutions under common procedure have not been suitable to
apply for the special kind of dispute resolution. ODR was born to fulfill all the gaps
mentioned.
Vietnam is a land of opportunity for foreign E-commerce companies because of
its young population. Under EU-VN Business Network, high Internet penetration rate
(ranked 17th in the world) and climbing smartphone penetration rates. Millennials,
considers the target population of E-commerce firms, account for 30% of Vietnam’s
population (approximately 30 million people). The penetration of Internet is projected
to increase steadily, with the percentage of Internet users set to reach 65% in 2022
(EU-VN Business Network 2018, pg. 6).
Following its accession to the WTO in 2007, Vietnam has allowed foreign
investors to establish 100% foreign-owned companies. This has attracted many
foreign investors, including E-commerce retailers. As E-commerce is expected to
soon become an important part of Vietnam’s trade sector, currently, big names such
as Lazada, Shopee, Adayroi, Tiki and more recently, Amazon, market have seized
the opportunity and entered Vietnam. In 2017, the Southeast Asian E-commerce
market was growing at 35% per year, 2.5 times faster than in Japan. Vietnam ranks


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4th for online shopping in the Asia Pacific region and is expected to continue booming
in the coming years, with sales estimated to reach EUR 8.1 billion (approx. USD 9
billion) in 2020.
Being not beyond the global rule of development, to match the the trend of
international integration, Vietnam issued Law on E-transaction in 2005 and
Information Technology in 2006, with by-law documents to govern E-commerce.

However, until now, ODR as one of the most important to motivate E-commerce is
not governed by law in clearly and specifically to settle disputes with E-commerce
origin and affect to the online transaction efficiency.
By the reason, the topic of “Online dispute resolution: International application
and lessons for Vietnam” is selected. The thesis is will be necessary for all of policy
makers, modern enterprises and online consumer to pave the way, actualize and
develop ODR in Vietnam.
2. Literature review
Although Online Dispute Resolution has about 30 years-developing journey
with the growth of Internet, ODR in Vietnam is still inexperienced and the term is
new with most of people in both of academia and business, although there are quite
many science reports republished in Vietnam mentioned this topic in recent years.
The author would like to review some typical researches from both Vietnamese and
foreign sources as following:
-

E.Katsh (2001) – “Online dispute resolution as a solution to cross-border
E-Disputes” – the author starts with describing ADR in general and the
major of ADR, then expressing the forms of ODR statement in US and
Canada, especially mediation. Finally, he tries to answer under what
conditions online mediation can provide a solution for cross-border edisputes in the EU and make recommendation for making online mediation
possible in the European context;

-

American Bar Association (2002) – “Addressing disputes in Electronic
commerce: Final Report and Recommendations” – the Task Force of this


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association defines clearly the definition of ODR as well as detailed scope
of its application in current statement as the fundamental understanding of
lawyers and law students in USA, with important recommendations set the
protocol of ODR development;
-

Colin Rule (2002) – “Online Dispute Resolution for Business: B2B, Ecommerce, Consumer, Employment, Insurance, and other commercial
conflicts” – the author supply essential information to senior management,
general counsels, and risk managers of large companies and start-ups alike
about the benefits of using Internet-based dispute resolution to resolve
disputes before they escalate, as well as businesspeople think how about
ODR can benefit their organizations, to give a snapshot of the current
global environment for ODR, and to provide some pointers and
suggestions to help get the process started;

-

Faye F. Wang (2009) – “Online Dispute Resolution: Technology,
management and legal practice from an international perspective” – the
author proposes the opinion that international and national legislative
organizations should amend or update the offline ADR rules by
recognizing electronic means of communication in resolving disputes and
incorporating concepts of ODR. From many international cases, it is
necessary to establish a uniform Code of Conduct at international level;

-

F. Petrauskas et al (2011) – “Online Dispute Resolution in consumer
disputes” – this article sets out general views on online transactions and

consumer protection in the context of E-commerce and possible online
dispute resolution means. The authors are chiefly concerned about legal
uncertainty and the jurisdiction as well as applicable law in business-toconsumer (B2C) E-commerce;

-

Pablo Cortés (2011) – “Online Dispute Resolution for Consumers in
European Union” – The author examines the consumer protection law in
the EU, how national judicial authorities are incorporating ICT into their
processes and online mediation for e-consumers; discusses the current


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development of ODR and evaluates the challenges posed by ODR and
evaluates the critical question of whether a legal framework is needed in
the EU to develop consumer ODR, the author explores the efficiency and
sufficiency of the existing regulatory mechanisms and the need for
designing a European legal framework in the field of ODR.
-

Phan Thi Thanh Thuy (2016) – “Resolving E-commerce Disputes:
Challenging Legal Issues for Vietnam” and “Resolving Trade Disputes
through Reconciliation in Vietnam: Some Legal Issues needs being paid
attention” – the researches focus on the analyzing of the concept and
characteristics of ODR, the challenging legal issues Vietnam has to resolve
in order to develop. Besides, they also point out and analyze the legal
hurdles that should be paid attention to make reconciliation be practical
and effective in the context of global and regional economic integration,
E-commerce has widely spread in Vietnam;

-

Ha Cong Anh Bao and Le Hang My Hanh (2017) – Online Dispute
Resolution – Ability of applying in Vietnam – the article mentioned ODR
as a suitable solution for Vietnam when its dispute settlement system is
facing some difficulties. In the articles, the authors analyzed the content
and characteristics of ODR, review and assess the advantages and
disadvantages if applied ODR in Vietnam, from which, the authors stated
that Vietnam can apply if there is consensus and unity of actors involved
in E-commerce transactions, as well as supporting from government
agencies;

-

Nguyen Xuan Dung (2018) – “Trade dispute settlement by negotiation
and conciliation in Vietnam” – in the master dissertation, the author
researches, analyzes, and evaluates the statement of current legal system
and trade dispute resolutions, especially negotiation and conciliation. By
the way, he clarifies advantages and disadvantages, unsuitable aspects in
the legal system and practical activities to propose visions and solution to
improve legal framework for negotiation and conciliation in Vietnam;


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Due to the fact that ODR is a controversial topic, there are numerous authors
and scholars are interested in, and a large number of relating books and articles were
published in the world. However, ODR is a new issue in Vietnam, it has just been
proposed to match with high level development of E-commerce in Vietnam in recent

years. So, there are a little number researches for this field with the content has not
been backward when compare with the day by day changes of E-commerce in our
country.
By the thesis, besides theoretical issues will be updated and cited
comprehensively from both Vietnamese and foreign science reports, the author would
like to combine and analyze empirical cases in over the world to clarify relating
problems, and by the way, to propose ideas, as well as possible methods and vision,
to apply ODR implementation and interoperability in Vietnam context.
3. Research objectives
It is quite cleared that Vietnam should act soon for the unexpected dispute in
business and to defend Vietnamese enterprises against risks raised in the international
trade. Meantime, Vietnamese legal frameworks and regulations for ODR and other
forms of international dispute settlement are not strong and comprehensive enough
to be willing to integrate the international environment of business. Therefore, the
content of this thesis will highlight the objectives as following:
-

Systematizing and analyzing the basic definitions, opinions and principles
of ODR as well as its mechanism;

-

Getting deeper awareness of ODR statement in the world:
+ Study situation of implementing ODR in some choosen countries to
resolve conflicts appear;
+ Understanding the way ODR organized in the mentioned countries;
+ Mentioning advantages and disadvantages in practical ODR apllication.

-

Recommendation for the development of ODR in Vietnam:
+ Finding out factors motivate ODR in Vietnam and challenges need to be
solved;


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+ Proposing and consulting recommendations and suggestions for
government, enterprises and consumers to improve and facilitate
effectively the development of ODR in Vietnam.
4. Research questions
The key questions of this thesis include:
1/ What are definitions and relating theoretical issues of ODR?
2/ How do developed countries apply ODR and its efficiency?
3/ What are the lessons for Vietnam, and is ODR suitable to be applied in
Vietnam in the present and future?
In order to find out the answers for the key questions above, these sub-questions
are focused as below:
-

What are the fundamental definitions and principles of ODR and ADR?

-

What are theoretical characteristics, advantages and disadvantages,
benefits ODR?

-

How is statement of legal framework, E-commerce and general

environment for implementing online dispute settlement in Vietnam?

-

What are lessons and how is ODR suitable with Vietnam context?

-

To perform ODR effectively in Vietnam, what are legal resolutions and
recommendations to improve and complete?

5. Scope of research
In terms of the content of the thesis, it concentrates on the ODR and its
application in both of theoretical and practical aspect in the world and Vietnam. Thus,
the scope of the study is shown as below:
As for the geographical scope, the research is aimed to make a deep view
concerning about ODR implementation and application in European Union, North
America including USA and Canada, also China. Then, the thesis focuses on the case
of Vietnam.


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As for time scope, the thesis focuses on the duration of 2016-2019 mainly for
analyzing and synthesizing information and database. This period remarked the
appearance and spread of ODR and E-commerce in the world.
6. Methodology
To carry out the study, the author combines the methods of synthesizing
information and using the statistics to compare, analyze and clarify the mentioned
issues. Moreover, the author also incorporates ODR cases to visualize theoretical

aspects.
To be more specific, the thesis is also completed based on the application of
theoretical and practical research methods. The data is collected, quoted from reports,
researches of experiential and trusted researchers and organizations in the field of
ODR. Primary data for such study is hard to conduct since ODR is quite new in
Vietnam going along with the limitation of resource of the author.
7. Research disposition
With the table, charts, references and appendixes, the thesis includes the main
content as follows:
Introduction
Chapter 1: Fundamental Framework
Chapter 2: International Application on Online Dispute Resolution
Chapter 3: Applicability and Perspective of Online Dispute Resolution in
Vietnam
Conclusion


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CHAPTER 1: FUNDAMENTAL FRAMEWORK
1.1. History of Online Dispute Resolution
The first half of the 1990s was a period of significant change in the online
environment. The World Wide Web was invented in 1989 and the first browsers
appeared a few years later (E.Katsh 2009, pg. 23). Netscape, the most popular
browser at the time, was quite user-friendly and the online population began to grow
as it became easier to acquire Internet access and it was discovered that it was
relatively easy to communicate and to obtain large quantities of information online.
It was at this time, around 1994, that it began to be clear that cyberspace, in the
future, would not be a harmonious place and that there would be a need for tools,
resources and expertise in responding to the disputes that would occur. In 1996, the

first articles about ODR appeared in a law review, the National Center for Automated
Information Research (NCAIR) sponsored the first conference devoted to ODR
(E.Katsh 1996, pg. 193), and funding from NCAIR launch the first significant ODR
projects, the Virtual Magistrate, the Online Ombuds Office at the University of
Massachusetts and a family dispute ODR project at the University of Maryland. At
that point, the Internet was twenty-seven years old. The domain name system had
come into being in 1985 but in 1990 there were only 7,800 domain names and a single
person managed the system. Formal dispute resolution systems did not exist and
apparently were not needed. This changed, however, as the Internet grew in a variety
of new directions. Disputes are a byproduct or side-effect of transactions and
relationships since, inevitably, a percentage of interactions in any environment can
be expected to face problems. With the growth of E-commerce, more transactions
were encouraged online and, as a result, more reports of disputes were occurring.
A year after the NCAIR conference, the Hewlett Foundation provided a grant
to the University of Massachusetts to establish the Center for Information Technology
and Dispute Resolution (later the National Center for Technology and Dispute
Resolution). The goal of the Center was to support the development of the field of
ODR. One of the Center’s first activities was to organize Cyberweek, an all-online


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conference that enable over four hundred persons from many different countries
demonstrations of software. Cyberweek has been an ongoing event of the Center and
in 2010, it was co-sponsored with the ADR Hub of Creighton University (E.Katsh
2009, pg. 23).
There were several physical conferences about ODR held in the late 1990 and
the early years of the twenty-first century but the one that has continued to be central
to the field is the International ODR Forum. The original idea for the Forum came
from Daewon Choi, an official of the United Nations Economic Commission for

Europe. The first two of which were held in Geneva in 2002 and 2003. Since then the
Forum has been held in Melbourne (Australia) (2004), Cairo (Egypt) (2006), Hong
Kong (2007), Liverpool and Victoria (Canada) (2008), Haifa (Israel) (2009), Buenos
Aires (Argentina) (2010), Chennai (India) (2011), Prague (Czech) (2012), Montreal
(Canada) (2013), Silicon Valley (USA) (2014), New York (USA) (2015), The Hague
(Netherlands) (2016), Paris (France) (2017), Auckland (New Zealand) (2018) and
Virginia (USA) (2019).
Court, in the mid-1990s, were beginning to struggle with jurisdictional
questions such as where an event occurred if parties were in different places and were
interacting online. Many of legal questions surfacing at the time, however, while
interesting, were largely irrelevant to persons who found themselves involved in a
dispute arising online. In the vast majority of situation, where parties were in different
places, land based courts and systems were not really useful options for persons who
felt aggrieved.
During the Internet “bubble” of 1999-2000, many ODR start-ups appeared and
then disappeared. A few, such as Smartsettle, Cybersettle and the Mediation Room,
remain. Ebay’s original ODR provider, SquareTrade, shifted its attention from ODR
to consumer warranties in 2006.
ICANN, a nonprofit organization responsible for coordinating the maintenance
and procedures of several databases related to the namespaces and numerical spaces
of the Internet, established the process of Uniform Domain-Name Dispute-Resolution


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Policy (UDRP) for the resolution of dispute regarding the registration of Internet
domain names. Besides, ICANN and the Uniform Dispute Resolution Policy for
resolving domain name disputes were instituted in 1999.
Interest in ODR has broadened geographically. The annual International Forum
on ODR mentioned earlier has been hosted at least once on every continent.

UNCITRAL, the United Nation body focused on international trade law, is working
on rules and policies for ODR in cross-border disputes. In Israel, Benoam is an online
arbitration system established in 2002 to resolve subrogation claims between
insurance companies over property damages incurred in “fender-bender” car
accident.
Software appropriate for ODR is more available today. More software choices
exist, some in general use and some, such as the Community Court of Modria and the
Web-based applications of Juripax and Fair-Out Comes that was specially developed.
The last ten years have also seen more interest in ODR on the part of computer
scientists and more collaboration between ODR and computer science fields.
The network’s rapid communication and information processing capabilities,
however, did open up opportunities for creative approaches and responses to problem
solving for cases that did not go to court. In other words, many of the same forces
that contributed to disputes could also be employed to resolve disputes. Today, there
is little doubt that there is an ongoing and growing need for ODR. There are indeed
large number of disputes rise from online activities; in fact, there are a greater
numbers of disputes than anyone predicted. For example, the eBay Resolution Center
revolves an incredible amount of over 60 million disputes per year, making it one of
the biggest ODR systems in the world. In addition, over this period of time, how and
when ODR is being used has also expanded. Without neglecting the need to respond
to disputes occurring offline. More to the point, the boundary line between the online
and offline worlds is, as “the digital world merges with the physical world”
(Gershenfeld 1999, pg. 10), much less clear than it used to be. As a result, the
challenges of ODR currently is less focused on where the disputes originated than it


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is in finding tools and resources that can be as effective in any dispute regardless of
where it originated.

1.2. Online Dispute Resolution and characteristics
1.2.1. Definitions
Conflict is present in all environments, it is fact. On the Internet, there are many
new and interesting environments. In these virtual places, where transactions,
interactions and relationship can be begun and end quickly, where barriers of time
and space are not constraints on communication, where identities can be transformed
on the screen, and where potentially valuable new forms of intellectual property can
be created at the keyboard, it is not surprising that disputes are occurring.
Online dispute resolution was born to adapt and resolve these kinds of conflict
above, growing with the development of Internet, nowadays, ODR is still a new field
in the most countries in over the world. So, it is not difficult to understand, until now,
there are many arguments about its definition among researchers with different
concepts.
-

According to Colin Rule, Online Dispute Resolution (ODR) is the use of
information and communication technology to help disputants find
resolution to their disputes;

-

Julia Hörnle, from University of London, in her paper, ODR is stated as a
kind of information technology and telecommunication via the Internet –
(together referred to as “online technology”) applied to alternative dispute
resolution;

-

Hon. Arthur defined ODR under its function, in which ODR provides the
ability for two (or more) disparate parties to settle their dispute using

Internet. Sometime this involves lawyers and mediators and sometimes it
does not. It depends on the vehicle/provider that the parties agree to use to
resolve their claim;


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-

Susan Nauss, in her article, defined the ODR as “any method by which
parties attempt to resolve dispute online”, means of communication
include email, chat rooms, bulletin board, and virtual communications;

-

Orna Rabinovich summarized ODR includes “forms of dispute resolution,
such as negotiation, mediation, and arbitration, which are conducted
through written digital communications”;

-

Edwards and Wilson divide ODR into “hard” ODR, referring to
“procedures intending directly to resolve conflicts” such as traditional
ADR, and “soft” ODR, relating to “procedures seeking to prevent disputes”
such as e-Bay’s feedback system for reputation ranking. In the author’s
opinion, ODR should be defined as online procedures to resolve disputes
or conflicts covering e-ADR and cybercourts;

-

Being mentioned by Feye.Wang, with the development of technology,
ODR designated cyberspace as a location for dispute resolution, moving
ADR from a physical to a virtual place. That is, ODR services are the
online transporation of the method developed in the ADR movement.
However, ODR not only employs the ADR processes in the online
environment but also enhances these processes in offline environments;

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Dr. Mohamed Wahab mentioned to the ODR as a branch of dispute
resolution that utilizes technology and artificial intelligence to settle
disputes. Traditionally, ODR targeted online disputes of diverse forms and
origin. Nevertheless, ODR seems to have outgrown its initially predestined
online milieu and is now capable of fulfilling its potential by targeting
offline diputes;

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The Australia National Alternative Dispute Resolution Advisory Council
(NADRAC) defines ODR as “process where a substantial part, or all, of
the communication in the dispute resolution process takes place
electronically, especially via email;

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The Department of Justice, Canada considers ODR as “refers to a wide
class of alternate dispute resolution processes that take advantage of the


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availability and increasing development of internet technology”. It is a set
of DR processes that allow for the resolution of disputes via online
mechanisms such as the Internet or some forms of technology that allows
for virtual communication without requiring the parties to be in a room
together;
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According to ABA, ODR is a broad term that encompasses many forms of
alternative dispute resolution (“ADR”) that incorporate the use of the
Internet, websites, email communications, streaming media and other
information technology as part of the dispute resolution process. Parties
may never meet face to face when participating in ODR. Rather, they might
communicate solely online.

From the definitions as mentioned, we can summarize that Online dispute
resolution (ODR) is a wide field and branch of dispute resolution which uses
technology to facilitate the resolution of disputes between parties. It primarily
involves negotiation, mediation or arbitration, or a combination of all three. In this
aspect, it is often seen as being the online equivalent of alternative dispute resolution
(ADR). Therefore, ODR can also improve these traditional means of resolving
disputes by applying innovative techniques and online technologies to the process.
However, ODR does not only transfer the real ADR into cyberspace, or online
ADR, but also expand to litigation in the online environment. And it should be noted
that, ODR does not mean removing all the mechanism of processing information
traditionally and face to face among parties. ODR may be used in a substantial part,
or all, of the dispute resolution process, as confirmed in ODR definition of NADRAC
above.
Under the Department of Justice (Canada), there are three main types of dispute
classifications within the ODR framework:

i. Business to Business (B2B)
Business to Business (B2B) disputes revolve around two commercial parties
that are seeking to resolve a dispute over a specific transaction. The parties in B2B


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tend to be sophisticated users, and there is generally less concern over party
vulnerability, and a greater emphasis placed on the convenience and expertise of the
process. With many B2B disputes resolved with some form of ODR, the use of
arbitration is prevalent.
ii. Business to Consumer (B2C)
Business to Consumer (B2C) disputes are becoming more common, particular
with the expansion of E-commerce. B2C disputes tend to be low-cost, but highvolume, and may involve unequal bargaining power between the consumer and the
business. An ODR process may meet consumers’ need for amending businesses and
to provide the necessary support for due process rights.
iii. Consumer to Consumer (C2C)
Consumer to consumer (C2C) disputes involve transactions between two
consumers (i.e. the sale of a used item). These types of E-commerce transactions are
also becoming more common with websites such as eBay or Craigslist acting as
facilitators between two parties, although the website is not an actual party to the
dispute.
1.2.2. Characteristics
ODR was born from the synergy between ADR and ICT, so it has full of the
same characteristics as ADR and the advantages of ICT. Under The Department of
Justice, Canada, main and remarkable characteristics can be listed as below:
Voluntary: Most ODR processes allow the parties to elect to participate in
them, or pursue their claim in another forum. Most also allow the parties to withdraw
from the process at any given time.
Informal: The proceedings are generally more relaxed and informal than inperson proceedings such as mediation, litigation or arbitration. Depending on the

ODR Provider and the rules in place, the process may be conducted in an
asynchronous manner and allow the parties time to reflect on their positions before
coming to any agreement.