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Cyber-Arbitration

Published online by Cambridge University Press:  17 February 2009

Daniel Girsberger  and
Dorothee Schramm
Daniel Girsberger
Affiliation:
Prof. Dr. iur., LL.M., attorney-at-law, ordinary professor for Swiss and International Private, Business and Procedural Law as well as Comparative Law at theUniversity of Lucerne, Switzerland.
Dorothee Schramm
Affiliation:
Dipl. iur. (Göttingen), Research Assistant, University of Lucerne.
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Extract

Dispute resolution without looking into the eye of a ‘judge’ — can this be regarded as the way of the future, or should one rather concentrate on traditional court, arbitration or ADR proceedings?

As shown above, an online mechanism is risky and may have disadvantages vis-à-vis more traditional dispute resolution mechanisms. Therefore, ODR cannot become the only alternative of such proceedings, at least not in the current state of technical development and given the customs of a large number of the participants in e-commerce. Also, the necessary technical standards have their price, in particular where consumers are concerned. The only exceptions are proceedings in which very simple fact or law patterns must be adjudicated such as in the UDRP mechanism.

Type
Articles
Information
European Business Organization Law Review (EBOR) , Volume 3 , Issue 3 , September 2002 , pp. 611 - 628
Copyright
Copyright © T.M.C. Asser Press and the Authors 2002

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References

1 See, e.g., Gerold, Herrmann, “Some Legal E-flections on Online Arbitration (“cybitration”)”, in: Briner, R./Fortier, L. Y./Berger, K. P./Bredow, J. (eds.), Law of International Business and Dispute Settlement in the 21st Century, Liber Amicorum Karl-Heinz Böckstiegel (Köln 2001) 267Google Scholar, who uses the word “cybitration” and claims copyright for it.

2 See, e.g., Gaillard, E./John, Savage (eds.), Fouchard, Gaillard, Goldman on International Commercial Arbitration (The Hague: Kluwer Law International 1999) § 1 N 14-15, with further references.Google Scholar

3 See, e.g., Schultz, T./Kaufmann-Kohler, G./Langer, D./Bonnet, V., Online Dispute Resolution: The States of the Art and the Issues, <http://www.online-adr.org/reports/TheBlueBook2001.pdf> (Geneva 2001) 3Google Scholar (all references to Internet were visited in April 2002). See also the definition of the scope of a survey in progress by the ABA Task Force on E-Commerce and Alternative Dispute Resolution (ADR) <http://www.law.washington.edu/ABA-eADR/surveys/GeneralSurvey.htm>.

4 See, e.g., Katsh, E./Rifkin, J./Gaitenby, A., “Ecommerce, E-disputes, and E-dispute Resolution: In the Shadow of ‘eBay Law,’”, 15 Ohio State J. of Dispute Resolution (2000) 705–734Google Scholar; Task Force on Electronic Commerce and Alternative Dispute Resolution, “Addressing Disputes in Electronic Commerce, Recommendation and Report”, Draft March 2002 <http://www.law.washington.edu/ABA-eADR/home.html>.

5 See, e.g., Vahrenwald, A., “Out-of-court dispute settlement systems for e-commerce. Report on legal issues. Part I, The Parties to the dispute” (2000/2002)Google Scholar

6 <http://www.icann.org/dndr/udrp/policy.htm>.

7 In the meantime, new TLDs have been added such as: .aero, .biz, .coop, .info, .museum, .name.

8 <http://www.icann.org/dndr/udrp/uniform-rules.htm>.

9 At the time of this writing, those ODR providers are: The World Intellectual Property Organisation (WIPO), Geneva, National Arbitration Forum (NAF) and CPR, U.S.A., as well as the Asian Domain Name Dispute Resolution Centre (ADNDRC), China, see <http://www.icann.org/dndr/udrp/approved-providers.htm>. eResolution, which had also been accredited, abandoned its services on 30 November 2001, see <http://www.newsbytes.com/news/01/172619.html>. See, concerning the problem of forum shopping, Geist, M., “Fair.com?: An Examination of the Allegations of Systemic Unfairness in the ICANN UDRP”, <http://aixl.uottawa.ca/~geist/geistudrp.pdf> 2ff.+2ff.>Google Scholar

10 Broadbridge Media, L.L.C. v. HyperCD.com, 106 F. Supp. 2d 505, 508 f. (S.D.N.Y.), referring to Art. 18 Rules.

11 Weber-Stephen Products Co. v. Armitage Hardware and Building Supply, Inc., 2000 WL 562470, 2. (N.D.Ill); Moyse, P.E., “La force obligatoire des sentences arbitrales rendues en matiere de noms de domaine” (October 2000)Google Scholar <http://www.juriscom.net/pro/2/ndm20001010.htm>; Dinwoodie, G., “A new copyright order: why national courts should create global norms’, 149 U. Pa. L Rev. (2000) 469, 524f., N. 170CrossRefGoogle Scholar; Dinwoodie, G., “(National) trademark laws and the (non-national) Domain Name System, 21 U. Pa. J. Int'l Econ. L. (2000) 495, 512f.Google Scholar; Froomkin, A. M., “Wrong Turn in Cyberspace: Using ICANN to Route Around the APA and the Constitution”, 50 Duke L J. (2000) 17, 100CrossRefGoogle Scholar; Thornburg, E.G., “Going private: Technology, Due Process, and Internet Dispute Resolution”, 34 U.C. Davis L Rev. (2000) 151, 190.Google Scholar

12 But see the critical remarks by Geist, supra n. 9; for UDRP reform recommendations see Geist, ibid., 6ff., and Mueller, M., “Rough Justice: An Analysis of ICANN's Uniform Dispute Resolution Policy” (November 2000) <http://dcc.syr.edu/roughjustice.pdf>, 19f.,+19f.>Google Scholar; POST, D.G., “Juries and the UDRP” (September 2000)Google Scholar <http://www.icannwatch.org/archive/juries_and_the_udrp.htm>

13 For an updated statistics, see <http://arbiter.wipo.int/domains/statistics/results.html>.

14 Schultz/Kaufmaun Kohler/Langer/Bonnet, supra n. 3, Appendix.

15 <http://www.novaforum.com/completed_cases_revised.html>.

16 See Online Resolution <http://www.onlineresolution.com/oa-how.cfm>, and NovaForum <http://www.novaforum.com/resolving_your_dispute_step_7_revised.html>. WebMediate chooses the Neutral only if the parties cannot agree on a Neutral, Art. 4.1 WebArbitrator Procedure and Rules, <http://www.webmediate.com/terms.html>. Online Resolution does not provide information on possible Neutrals, as opposed to WebMediate <http://www.webmediate.com/cgi/Circle.cgi> and NovaForum.

17 Most aspects of due process do not particularly apply to online proceedings. However, specific problems arise with respect to independence of the Neutral and with respect to the right to be heard.

18 Redfern, A./Hunter, M., Law and Practice of International Commercial Arbitration, 3rd ed. (London 1999) 217.Google Scholar

19 See Geist, supra n. 9, 8f., 18.

20 Kaufmann-Kohler, G./Peter, H., “Formula 1 Racing and Arbitration: The FIA Tailor-Made System for Fast Track Dispute Resolution”, Arb. Int. (2001) 186f.Google Scholar

21 WebMediate, for example, foresees an online proceeding without any personal contacts, Art. 6.2 WebArbitration Procedure and Rules, supra n. 16. On the other hand, NovaForum allows tele- and videoconferencing, <http://www.novaforum.com/resolving_your_dispute_step_7_revised.html>

22 For the New York Convention, A. J. van, den Berg, The New York Arbitration Convention of 1958 (Deventer 1981) III-4.2.3Google Scholar. (b). In the course of the drafting process for the UNCITRAL Model Law on International Commercial Arbitration, a mandatory right of the parties was claimed to request a hearing, see Broches, A., Commentary on the UNCITRAL Model Law on International Commercial Arbitration (Deventer 1990) p. 124 f.Google Scholar. This claim, however, was not reflected in the final text of Art. 24 para. 1 (2) UNCITRAL Model Law, which includes an exception.

23 In an older German off-line court case, where the Neutral had not forwarded the letter of one party to the other party, the court found a violation of due process: OLG, Hamburg, MDR (1975) 940Google Scholar; van den Berg, supra n. 22, III 4.2.3. (b).

24 So far, most offerors have not provided information on their homepage regarding the taking of evidence. WebMediate, however, while not offering a witness hearing, asks for sworn or unsworn witness statements, Art. 11 WebArbitration Procedure and Rules, supra n. 16.

See Herrmann, , supra n. 1, 273.Google Scholar

26 Kaufmann Kohler/Peter, supra n. 20, 189.

27 European Court of Human Rights of 8.7.1986, Lithgow et al. v. United Kingdom, <http://hudoc.echr.coe.int/hudoc/ViewRoot.asp?Item=0&Action=Html&X=227152702&Notice=0&Noticemode=&RelatedMode=0>, § 201.

28 See Art. VI of the Recommendation 98/257/EC of the Commission dated 30 March 1998 on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes, OJ(EC) [1998] L 115/31-34. See also Kaufmann-Kohler, G., “Choice of court and choice of law clauses in electronic contracts”, in: Jeanneret, V. (ed.), Aspects juridiques du commerce electronique (Zurich 2001) 20f.Google Scholar

29 Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, OJ [1993] L 95/29-34.

30 Vahrenwald, supra n. 5, 105.

31 Kaufmann Kohler, supra n. 28, 26ff.

32 Art. 8(1) UNCITRAL Model Law on International Commercial Arbitration of 1985 <http://www.jus.uio.no/lm/un.arbitration.model.law.1985/doc.html>; Art. II and V lit. a New York Convention; § 1060(1) and § 1059(2) No. 1 lit. a of the German Code on Civil Procedure; Art. 7 and 178 Swiss Act on Private International Law (SPILA); <http://www.jus.uio.no/lm/un.arbitration.model.law.1985/doc.html>; § 1060(1) and § 1059(2) No. 1 lit. a of the German Code on Civil Procedure (Zivilprozessordnung, ZPO), as amended.

33 See Swiss Federal Supreme Court, 16 January 1995, BGE 121 in 38, 44; Kaufmann-Kohler, G., “Arbitration Agreements in Online Business to Business Transactions”Google Scholar, in: Briner/Fortier/Berger/ Bredow, supra n. 1, 358-362; Gibbons, L. J., “Rusticum Judicium? Private ‘Courts’ Enforcing Private Law and Public Rights: Regulating Virtual Arbitration in Cyberspace”, 23 Ohio Northern L Rev. (1998) 769Google Scholar, <http://law.utoledo.edu/publications/Gibbons-Ohio%20N.U.%20L.%20Rev.htm>, sub m.B.2.; Hill, R., “On-Line Arbitration: Issues and Solutions”, Arbitration International (1999) 200ff.Google Scholar

34 See, e.g., the express language of Online Resolution, <http://www.onlineresolution.com/oa-how.cfm>.

35 FordJourney, in Art. 15 of its terms and conditions, <http://www.fordjourney.com>, offers arbitration. The arbitration, however, is binding only upon FordJourney. The arbitration is administered online by the London Chartered Institute of Arbitrators, <https://www.arbitrators.org/fordjourney/>.

36 Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures, OJ(EC) [2000] L 13/12-20.

37 In Germany, for example, the Directive was implemented by the new §§ 126a of the Biirgerliches Gesetzbuch (BGB) and 292a of the Zivilprozessordnung (ZPO) in the context of a new Act on Electronic Signatures = Gesetz über Rahmenbedingungen fur elektronische Signaturen of 16.5.2001, BGBl. 12001, 876.

38 See the 2001 Draft of a Federal Law on Certification of Digital Signatures = Entwurf eines Bundesgesetzes iiber Zertifizierungsdienste im Bereich der elektronischen Signatur (ZertES), <http://www.ofj.admin.ch/themen/e-commerce/bg-zertes-d.pdf>, and commentary = Botschaft von Juli 2001 BBl (2001) 5679 (inserting Art. 14 Abs. 2bis OR).

39 For Switzerland, see, e.g., Art. 29 ZertES-E in connection with Art. 3(2) ZertES-E (equivalent foreign recognition proceedings). This rule may cause problems in relation to EU proceedings, while Switzerland requires an accreditation of certification instances, the EU does not (Art. 3(2) Directive allows, but does not require, accreditation). It is doubtful whether the occasional supervision required by Art. 3(3) Directive can be viewed as an equivalent.

40 See, e.g., Art. 176ff. of the Swiss Private International Law Act (SPILA) or Art. 1492ff. of the French Nouveau Code de Procedure Civile (NCPC).

41 Art. 176 SPILA; Art. 1(3) lit. a UNCITRAL Model Law, supra n. 32.

42 Art. 1492 NCPC, Art. 1(3) lit. b Nr. 2 UNCITRAL Model Law, supra n. 32; Kaufmann-Kohler, supra n. 28, 16-19.

43 Compare Art. 1(2) UNCITRAL Model Law (supra n. 32), Art. V(l) lit. d New York Convention; Vahrenwald, supra n. 5, 83.

44 Vahrenwald, supra n. 5, 82; Girsberger, D., “Entstaatlichung der friedlichen Konfliktregelung zwischen nichtstaatlichen Wirkungseinheiten: Umfang und Grenzen”, in: Deutsche Gesellschaft, für Völkerrecht (ed.), Völkerrecht und Internationales Privatrecht in einem sich globalisierenden internationalen System – Auswirkungen der Entstaatlichung transnationaler Rechtsbeziehungen (Heidelberg 2000) 252, with further references.Google Scholar

45 Hill, supra n. 33, 204f.; Hill, R., “The Internet, Electronic Commerce and Dispute Resolution: Comments”, 14/4J.lnt.Arb. (1997) 104Google Scholar; Kaufmann-Kohler, supra n. 33, 357f.; See, e.g., Art. 4 WebMediate Terms of Use, <http://www.webmediate.com/terms.htmlttarb>; Arsic, J., “International Commercial Arbitration on the Internet: Has the Future Come Too Early?”, 14/3Journal of International Arbitration (09 1997) 219Google Scholar; Herrmann, supra n. 1, 273.

46 See, e.g., Girsberger, D., “The Internet and Jurisdiction Based on Contract”, in: Frank, Emmert (ed.), 4 European Journal of Law Reform: Special Issue on International Procedural Law (2002) 167–185, 171ff.CrossRefGoogle Scholar

47 Girsberger, D./Weber-Stecher, U., “E-Banking und Internationales Privatrecht”, in: Wiegand, W. (ed.), E-Banking: rechtliche Grundlagen, Berner Bankrechtstag vol. 8 (Bern 2002) 203ff.Google Scholar, with further references. The Geneva Roundtable on Electronic Commerce and Private International Law proposed to create a general presumption of internationality except where all parties involved have their habitual residence in the same country and were aware of that fact not later than when the contract was concluded, see report in <ftp://hcch.net/doc/gen_pd7e.doc>, 23.

48 See, e.g., the UDRP mechanism (supra 3.1.); Online Resolution, e.g., allows for the decision to be binding only if the parties agree in advance <http://www.onlineresolution.com/oawhatis.cfm>.

49 See, e.g., NovaForum, at <http://www.novaforum.com/learn_about_our_8_step_methodology_revised.html>, and Web-Mediate Art. 20, WebArbitration Procedure and Rules, supra n. 16. FordJourney, allows for the consumer to invoke the state courts, while the result is binding on FordJourney, <https://www.arbitrators.org/fordjourney/>.

50 Supra 3.1.

51 Supra 4.2.

52 Kaufmann-Kohler/Peter, supra n. 20, 186f.

53 See also the similar requirement of Art. 35 Abs. 2 UNCITRAL Model Law, supra n. 32; Vahrenwald, supra n. 5, 112.

54 On the other hand, ODR has several advantages, such as cost and time efficiency. However, this is not necessarily so in every real life situation. For example, the look into the eye of a witness or a Neutral may replace tens or hundreds of e-mail-messages when determining whether an alleged fact complies with a testimony.

55 For a detailed analysis of the current state of affairs regarding ADR in Europe, see European Commission, Green Paper on alternative dispute resolution in civil and commercial law, Brussels, 19.4.2002 COM (2002) 196 final.

56 See Art. IV of the Recommendation 98/257/EC of the Commission on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes, supra n. 28.

57 See Art. II No. 1 of the Recommendation 98/257/EC of the Commission on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes, ibid. A good example may be found at WebMediate, which offers extensive information – <https://www.webmediate.com/terms.html>.

58 See Art. II No. 2 Commission Recommendation 98/257/EC, supra n. 28.

59 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (“Directive on electronic commerce”), OJ(EC) [2000] L 178/1-16.

60 Art. 17 (1) E-Commerce Directive reads: “Member States shall ensure that, in the event of disagreement between an information society service provider and the recipient of the service, their legislation does not hamper the use of out-of-court schemes, available under national law, for dispute settlement, including appropriate electronic means.”

61 Art. 17 (2) E-Commerce Directive reads: “Member States shall encourage bodies responsible for the out-of-court settlement of, in particular, consumer disputes to operate in a way which provides adequate procedural guarantees for the parties concerned”.

62 On ODR see the Reports of the American Bar Association Task Force on E-commerce & Alternative Dispute Resolution of May, 2001 <http://www.law.washington.edu/ABa-eADR/drafts/docs/2001.05.21draft.pdf>, and April, 2002, Task Force on Electronic Commerce and Alternative Dispute Resolution, Addressing Disputes in Electronic Commerce, Recommendation and Report, Draft March 2002, <http://www.law.washington.edu/ABA-eADR/home.html>.