In 1998 Eduardo Paz, who is Director of Comercio Electrónico Global SC – a Spanish electronic trade promotion organisation, foresaw the value of taking arbitration proceedings online. Unlike other ADR procedures, arbitration guarantees to deliver a court enforceable settlement of a dispute. If the procedure falls within the terms of the New York Convention (UNCITRAL: “Convention on the Recognition and Enforcement of Foreign Arbitral Awards”, New York 1958), the national courts in over 130 countries will enforce an arbitrator’s decision. This treaty sets a critical and demanding technical target for online services.
At that time, an information systems engineer at
Access to funds from the Information Society Technologies priority of the EU’s Framework Programmes, is competitive and a bid needs to be well written, addressing the issues raised by the Commission in its research ‘call’. It was therefore decided that the consortium would bid under the heading of New Methods for Work and Electronic Commerce – ‘Smart’ Organisations. Although EU funds would cover a substantial element of the project costs, each of the collaborating organisations needed to make a commitment to invest not only in the key personnel above but also in other project staff integral to the success of the project. Detailed work plans and budgets were as important as having the right technical mix in constructing a successful bid E860,000 was awarded to the project, commencing in January 2001.
The Problem with International Arbitration
International arbitration does not have a reputation for being quick or cheap Some sources estimate that its only worthwhile for disputes in excess of E50,000 and the International Chamber of Commerce in
An advantage of arbitral proceedings is that they can be tailored to meet the specific needs of a dispute or business community. Arbitration, of necessity, requires a technology solution that can be easily adapted to the needs of cases and centres. Flexible intelligent case management software, rather than the creation of a new online arbitration centre, was what E-Arbitration-T needed to deliver at a low cost to each individual dispute.
When a dispute gets to arbitration, mutual trust has already been undermined. Confidence in the arbitral institution and trust in the security, reliability and confidentiality of the process are of paramount importance. We often demand higher standards of new technology than we happily accepted in conventional business practice – thus making security another critical success factor for E-Arbitration-T.
With about one and a half million arbitration cases per year there is a clear need for a product like E-Arbitration-T. However, in order to meet all the criteria, a research and development programme with several areas of expertise was needed. The problem was to assemble this range of experience and the funds to convert the idea into a product and business design capable of being floated with venture capital.
Cross-border ADR is an international activity – to complement the business process and IS skills at Brunel, Eduardo recruited expertise in security technology from
Technology
The E-Arbitration-T service is based on the application service provider model. Arbitral institutions ‘rent’ the use of the software from the ASP and only pay per case fees in relation to the value of the disputes that actually use the service. In this way, none of the parties or arbitral institutions need technological expertise and the costs of establishing and running the service are spread over many disputes in many different centres. Since the E.Arbitration-T platform is designed to support the entire process – from making the initial request to distributing the award – the savings on postage and administrative costs more than offset the rental fee.
Both parties and arbitrators need nothing more than a reliable email address and access to the E-Arbitration-T server. A dispute is lodged with the service by first obtaining an authenticated user identifier and password to the site. Unlike some other services, these are issued on a personal basis with the individual responsible for secrecy of their own identity data, thereby improving security. Firstly, there is never a need to communicate user identities to another individual. Secondly, lawyers and arbitrators working with multiple cases do not need to remember a variety of different identities. It also provides the same level of auditing as the signatures on covering letters that usually accompany the formal submission of documents.
Once online, parties or their representatives can prepare submissions using template documents and guidance notes from the server. All evidential materials are uploaded to a secure area belonging to the party. When a formal submission is ready, all documents are moved to the tribunal area where they are secured against further changes. To preserve this security, no file transfer to the other parties takes place but a notice that they are available for inspection is sent by e-mail to both arbitrators and parties. The documents can then be consulted online or downloaded under control of the security software.
Secure bulletin board and chat rooms are available individually to each party and to the arbitrators for private use. These facilitate communication for three-person tribunals and between representatives or multiple parties joined in a common action. The same tools can be used for holding an open ‘hearing’ of arguments before all parties. From the outset, all interaction is monitored and inappropriate communications are barred by the security software. Video conferencing is a target yet to be achieved – the current technology cannot provide the quality of ISDN and it represents a significant added cost to the technical services.
A key element of E-Arbitration-T is its intelligent case management software. This can follow the rules of any particular arbitral centre and guide parties through the procedures required to select arbitrators, set up online meetings and submit pleadings within the required time. The arbitrators can also trigger case specific procedures such as submission of evidence to a neutral expert and processing of their subsequent report. This element of user support sets E-Arbitration-T apart from general collaborative working software.
Comment
One advantage of using EU funding is the rigorous testing of ideas that goes on right through the process. Even a successful bid will have been evaluated by independent experts in the field and the Commission will negotiate for improvements in the plan when the research contract details are hammered out. Then every six months the Commission will review the work to date and consult expert opinion on the progress of the project. The E-Arbitration-T team has received invaluable feedback and support from lawyers in
The project aims were much broader than just the design of a piece of software. The whole framework for online arbitration has been reviewed and recommendations on the legislative issues and ODR technical standards have been produced. Online working requires extensions to the arbitral rules and the project has provided both model rules and guidance on the issues that must be addressed. It has also analysed working practices to determine where the potential benefits and advantages lie. This shows that the arbitral rules, rather than technology, are the major determinant of the time scale and that the biggest benefits will be in accessibility and reduced costs or improved quality of the process. Throughout, the E-Arbitration-T Web site has hosted discussion groups and newsletters examining the issues it raises.
The E-Arbitration-T platform is backed by a thorough understanding of arbitration processes and the needs of arbitral institutions. This has only been possible through international collaborative work supported by EU research funding.
The E-Arbitration-T Web site is at www.e-arbitration-t.com.
Note: The current EU funding opportunity, Framework Programme Six was launched in
