Online Dispute Resolution (ODR): the use of online mechanisms by arbitration institutions and of ODR in cross-border con

1. 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

2. Distinguish • Traditional arbitration facilitated by means of IT facilities • Online arbitration

3. Electronic file management • ICC – NetCase • AAA – WebFile • The ICDR Manufacturer/Supplier Online Dispute Resolution Protocol

4. Legal obstacles to the use of online arbitration • procedural framework - due process, confidentiality, and the seat of arbitration • award - formal requirements, binding nature, and enforcement and public policy

5. Trust marks Belgium Lithuania

6. Criteria and code of conductBeCommerce, Belgium • 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

7. Current Developments • WIPO Arbitration and Mediation Center • CPR Institute for Dispute Resolution & Modria

8. ODR in cross-border consumer disputes • 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

9. Task of the Working Group III 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.

10. Main features of the Draft UNCITRAL ODR Rules • 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.

11. Proposed structure: a “two-track” set of 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)

12. How to determine which track is the right track? 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.

13. 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.

14. 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.

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

16. How do companies use ODR? • The resolutions/protection model (eBay, Amazon) • The chargeback model (credit cards) • The escrow model (TaoBao, Alibaba)

17. Thank you!