Author: Debarshi Roy Choudhury, Jalpaiguri Law College

The Indian judicial system currently faces a large backlog of cases, requiring a shift from traditional litigation to more efficient dispute resolution mechanisms. This article explores the emergence of Online Dispute Resolution (ODR) as an important evolution of Alternative Dispute Resolution (ADR). It examines in detail about the legal frameworks supporting ODR in India, including the Arbitration and Conciliation Act, 1996, and the Information Technology Act, 2000. Furthermore, the article analyses the role of Artificial Intelligence (AI) in revolutionizing legal processes through automation and predictive analytics. While ODR promises cost-effectiveness and procedural flexibility, the paper also highlights critical challenges such as the digital divide, data security issues, and the lack of a unified legal standard. Finally, the article offers recommendations for infrastructure development and digital literacy to ensure ODR becomes a truly inclusive tool for justice in India’s digital economy.

Keywords: Online Dispute Resolution (ODR), Alternative Dispute Resolution (ADR), Artificial Intelligence in Law, Digital Economy, Judicial Pendency, E-Mediation, Indian Legal Framework.

It is a very known fact that Indian courts are already overburdened with lots of cases and there is no mechanism of speedy disposal of cases which could be done as the court process is a very slow and complex process which takes many years to conclude. It was estimated that in India there are around 48 million pending cases divided among roughly 21,000 judges. For these problems, the mechanism of Online Dispute Resolutions ‘ODR’ was introduced. ODR mechanisms are considered cost-effective, time-bound, having procedural flexibility, and providing a sufficient amount of autonomy to the parties. In 2002, the Code of Civil Procedure 1908, was amended to introduce Section 89, which provides that courts can refer disputes which are capable of being settled between parties to alternate dispute resolution. ODR platforms work digitally via video-conferencing, chatbots and online arbitration, conciliation and mediation to settle disputes. ODR became more popular after the COVID-19 pandemic when the world took a shift towards a digital outlook and the need for these digital transformative mechanisms were seen to be much more efficient for facilitating court services. A popular mechanism is mediation which involves a mutually appointed third party that facilitates negotiation between parties to a dispute to help them arrive at a mutually agreeable settlement. Section 6  of the Draft Mediation Bill, 2021 mandates parties to settle disputes by mediation before filing a suit to seek interim reliefs before the commencement of or during the proceedings. The Bill also recognizes online mediation and states that online mediation shall be governed by regulations specified by the Information Technology Act, 2000. Several platforms have been developed which facilitate ODR such as SAMA, Centre for Online Dispute Resolution Excellence(CODRE), Centre for Alternate Dispute Resolution Excellence (CADRE) and Agami.

Section 89 of the Code of Civil Procedure (1908) identifies arbitration, mediation, and conciliation as primary forms of Alternative Dispute Resolution (ADR) to settle disputes outside formal court proceedings. Arbitration involves disputing parties submitting their case to an independent third party whose decision is binding upon them. The process is governed by the Arbitration and Conciliation Act 1996 and is mostly used in commercial disputes. Once a court refers a matter to arbitration, it permanently leaves the court’s domain, and the award is treated as a decree. Conciliation is a less formal ADR mechanism where a conciliator helps parties to reach a mutually acceptable solution. Mediation uses a neutral third party to facilitate negotiation between disputing parties, helping them reach a non-binding, cooperative resolution. The mediator does not impose a decision but helps communicate, clarify issues, and explore effective solutions. But still these methods have their own limitations regarding physical presence, speed, and cross-border e-commerce disputes. These Traditional ADR methods require parties to be physically present for hearings, meetings and negotiations. This is a very problematic issue especially in cross-border conflicts and parties who cannot easily travel or have other limitations. Traditional ADR methods are still slow due to scheduling conflicts and thus cases drag on for months undermining the main goal of speedy dispute resolution. New digital systems like Online Dispute Resolution (ODR) are emerging to overcome these gaps by taking help of virtual platforms automating and streamlining the entire process and also providing greater accessibility and efficiency. ODR is the digital form of ADR method which makes dispute resolution more accessible, fast and cost-effective while maintaining fairness and flexibility. It uses three mechanisms of ODR which involve E-Negotiation, E-Mediation, and E-Arbitration. It streamlines the process with much efficiency where parties interact through online platforms. In mediation, the settlement process often takes place using video conferencing, chat, and other communication technologies. On the other hand E-Arbitration receives claims and submits virtual hearings and delivers the verdict through their respective online platform. These ODR mechanisms are designed to provide greater accessibility and efficient dispute resolution unlike traditional methods which are slow and have lots of complexities.  

Online Dispute Resolution (ODR) in India has got its authority and legitimacy from multiple statutes. Sec 7 of the Arbitration and Conciliation Act 1996 has established that electronic forms like emails and digital records are valid as long as the prerequisites of a binding agreement are met. Section 19 allows for virtual, online hearings, digital filing of claims and exchanging online evidence and submissions. Section 4 of the Information Technology Act, 2000 gives the same legal status to electronic records as to paper documents, validating e-contracts, e-filings, and all forms of digital documentation. Section 5 gives legal validity to digitally signed awards, agreements, and filings. Section 65A and 65B of the Indian Evidence Act, 1872 gives legal effect to electronic records as evidence in legal proceedings. 

In the State of Maharashtra v. Praful B. Desai, the Supreme Court of India observed that in a video conference, both the parties are in the presence of each other and therefore, recording of the evidence using such electronic means and in the virtual presence of the accused is in compliance with the requirement that the evidence must be taken in the presence of the accused. 

Noting that the use of technology found judicial recognition in Praful Desai wherein it was held that the term ‘evidence’ includes electronic evidence and that video conferencing may be used to record evidence. However, the guidelines note that “video conferencing shall be mainly employed for hearing arguments whether at the trial stage or at the appellate stage” and in no case shall evidence be recorded without the mutual consent of both the parties by video conferencing”. 

The biggest challenge to ODR’s promise of universal access to justice is that rural areas still lack access to the internet and technology. Many of the consumers still remain unaware of ODR options. When COVID-19 hit and the courts shifted to virtual hearings, many litigants still lacked technical expertise and internet access. For example, a farmer or an elderly woman cannot access ODR services due to insufficient technological expertise. While the Digital Personal Data Protection Act, 2023 (DPDP Act) imposes obligations on data security, compliance and data checks are inconsistent. ODR platforms often face unprecedented data security breaches because they lack encryption and security protocols. Section 5 of the Information Technology Act, 2000 gives legal validity to e-signatures but its enforcement remains problematic. Different ODR platforms operate under different rules, standards, and procedures. For example, An award from one platform may not be enforceable by courts in another jurisdiction, creating a lack of unified legal framework. E-Mediation conducted through video conferencing, chat lacks physical presence and emotional connection which is important to escalate conflict and build trust between parties. 

Use of AI in ODR shows a transformative change of how disputes are processed and settled amicably. While settling disputes AI involves deploying machine learning algorithms to analyze text and extract facts, identifying dispute categories and determining settlement likelihood. While a human mediator demands expensive charges, AI powered chatbots use LLM trained on data of successful mediations to engage with parties through conversation. Mediation held via chatbots is said to guarantee resolution within days rather than waiting for months that is seen in human mediators. Section 4 and 5 of the Information Technology Act recognize electronic records and signatures as legally valid as physical documents. NITI Aayog’s ODR Policy Plan for India (2020) recommends integration of contract lifecycle management which would help lawyers to AI- assisted case management with predictive outcomes. Section 7 of the Arbitration and Conciliation Act, 1996 recognizes that arbitration agreements executed through AI-assisted platforms are valid and enforceable. Moreover it should be kept in mind that mediation assisted through AI should be operated under human supervision and maintain confidentiality. Consumer Courts Act, 2015 and Consumer Protection Act, 2019 recognizes AI-assisted mediation as valid dispute-resolution mechanisms. Section 61 and 63 of the Bharatiya Sakshya Adhiniyam, 2023 recognize electronic records as primary evidence and AI-generated records are admissible only if they are authentic. 

Government funded e-sewa Kendras- Establishment of government-operated e-sewa kendras in block levels, taluka offices, and Gram panchayats and trained staff will help to amplify the easy settlement of disputes. 

Campaign programs- Training the staff and also creating awareness among elders and marginalized and rural populations to increase digital literacy is essential. 

Multilingual Support- The AI chatbot and mediation mechanisms should support India’s vernacular languages like Hindi, Tamil, Telugu, Kannada, Marathi, Bengali and others to reach a core of rural populations. 

Sections 4 and 5 of the IT Act recognise the validity of digital signatures, and under these provisions, the arbitration agreement, and the arbitral award both can be signed digitally by the parties and arbitrator respectively. In India, arbitrations are generally opted by the parties that are digitally aware of these ODR platforms and have access to the Internet. In Santhini v. VijayaVenkatesh emphasized the importance of using technology for maximising innovation and ensuring that everyone has access to legal services and justice. 

This will resolve small disputes cheaply and quickly without reaching out to lawyers who demand expensive fees and irregular court timelines. These AI algorithms are trained in such a way that it reflects genuine legal outcomes and not mediator bias and on the other hand, e-sewa Kendras will ensure access to rural populations. 

One of the major issues in implementing ODR in India is the lack of clear legal provisions. The Act was implemented at a time when mediators could not possibly visualize the technological advancements to an extent where in-person mediation would not be required. 

Secondly India has not reached that level where technology is fully advanced as is the case with several other countries and people are still pessimistic about using technology for settling legal disputes. 

Confidentiality and security are other major concerns with e-arbitrations as the data can be tampered or read by third parties if strong encryption and security protocols are not used. That is the reason for frequent hacking and data leaks that led to the apprehension of ODR.

There is an urgent need for guidelines for the encouragement and promotion of online arbitration proceedings because of the pendency of over 52 million cases and an additional 2 crore filed annually, the traditional court system is unable to deliver timely justice. Growth of e-commerce and digital transactions have low-value disputes that neither courts nor traditional ADR can resolve. India’s existing legal framework permits online arbitration, e-mediation, and digital settlement agreements. Hence, AI-assisted mechanisms can help speedy settlement of disputes, predictive outcomes, and chatbot assistance which resolve much faster than traditional ADR mechanisms. India has still not achieved full technological development which means rural populations still lack reliable internet connection and lack digital literacy. It needs government funded establishment of e-sewa kendras and campaigns for the promotion of ODR. The wider use of ODR in India has the potential to transform the Indian judicial system and to reach a larger audience making it accessible and efficient. It is high time to invest in infrastructure to make it accessible and mandate courts to deploy it for cases. Though there are certain challenges in the implementation of online arbitration, the solutions which we have discussed should be implemented for the wider usage of online dispute resolution in India.

1. Arbitration and Conciliation Act, 1996 (India).

2. Information Technology Act, 2000 (India).

3. Mediation Act, No. 29 of 2023 (India).

4. Consumer Protection Act, No. 35 of 2019 (India).

5. National Judicial Data Grid, https://njdg.ecourts.gov.in/ (last visited Dec. 31, 2024).

6. Drishti IAS, Rising Judicial Pendency in India (Sept. 15, 2025), https://www.drishtiias.com/

7. SSRana & Co., Electronic Arbitration Agreements in India (Dec. 14, 2022). https://www.ssrana.in/

8. SCC Online, Virtual Hearings in Arbitration: A Mirage or a Reality?  (Oct. 27, 2021). https://www.scconline.com/

9. Vidhi Centre for Legal Policy, ODR: The Future of Dispute Resolution in India, https://www.vidhilegalpolicy.in/

10. Jindal Global University, Artificial Intelligence and the Future of Online Dispute Resolution in India (Apr. 16,2024), https://jgu.edu.in

11. IJFMR, Online Dispute Resolution (ODR): A Paradigm Shift in Access to Justice.https://ijfmr.com/