There has been found that more than 75,000 tenants are using home rental startup NestAway and disputes that are arising out of their refusal to pay rents or bills are not uncommon.
The disputes are mostly resolved out of the court through arbitration, given the small sums that are involved in the same. The disputes are resolved based on a clause present in the rental contracts. But while arbitration remains a cumbersome and costly process, mandating both parties to be present for hearings and involving the submission of many documents, NestAway started to look at how tech can be used to speed up resolution and reduce cost as well.
Starting the venture with trying to resolve disputes via email, it went on to incubate on the platform of online dispute resolution (ODR) – Cadre or Centre for Alternate Dispute Resolution Excellence. The resolution on Cadre that is found by Shalini Saxena and Kanchan Gupta, is done online through a website-based platform.
In this resolution, first, one party approaches the platform, which contacts the other party. An arbiter is appointed to them if both the parties agree to the arbitration rules and time-stamped intimations are also sent on emails and WhatsApp and SMS. On this platform, the parties don’t meet face to face but they do communicate electronically, including via video calls. The legally binding decision usually comes within 20-25 days.
The arbitrator’s fee, at Cadre, is levied on both parties but is usually paid by the party who brought up the dispute. The general counsel at NestAway, Rajneesh Jaswal informed that the legal costs for resolving such disputes have halved. Also, a case that would take six months via arbitration is now being settled within a time of 30 days.
Even though these are the initial days for ODR with about 30 cases resolved via Cadre so far, Jaswal is hopeful that the numbers would rise. Cadre isn’t the only platform in India to run the ODR. There is Sama, which is a startup by Pranjal Sinha, Akshetha Ashok, and Vikram Kumar who are running a pilot for ICICI Bank. For the services provided on this platform, Sama charges a commission and has helped resolve nearly 10,000 disputes with values that run up to Rs. 20 lakh.
The previous year, a partner with law firm Keystone Partners, Vikas Mahendra, co-founded the Centre for Online Dispute Resolution (CODR), which places itself as an institution that would administer cases online end-to-end. It had been focusing on arbitration training to build a talent pool and was looking to start resolving disputes by the end of January.
The argument for Online Dispute Resolution is strong in India in the time where courts are overburdened and the backlog cases run into lakhs. Pranjal Sinha of Sama observed that access to justice in India is abysmal and resolving disputes is a pain point, given the fact that time, money, and effort are involved.
The growth of ODR was fuelled, globally, by the e-commerce boom, with millions of disputes being resolved online by eBay and PayPal. Starting from insurance to banking and even family disputes, ODR can be used across various sectors. Chittu Nagarajan, a pioneer in ODR who headed Community Court initiatives at eBay and PayPal noted that it is about leveraging tech to prevent and resolve disputes.
Players of arbitration are aware of the challenges that India would face in the adoption of the ODR. Jaswal says that people will have to trust the system and the platform that disputes can be resolved without the parties seeing each other. The biggest challenge would be while dealing with people who aren’t very used to the digital ecosystem.