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ADR – New age tool for digital users

Almost every Indian citizen has gone digital, and a few have not been very close to the finish line. People are making payments, accessing social media, leveraging e-governance services, and whatnot. Shutting down on WhatsApp for 1 hour is now breaking news in India, and a few businesses are even going to a standstill due to this kind of digital blackout. Considering this digital era, we expect many daily cybercrimes and data theft cases. Online firms in India collecting/managing/storing/processing users’ data need to be extra cautious due to the upcoming Digital Data Protection Bill, 2022. If there is money consideration between the online firm and the consumer, it leads to a valid contract between the parties. Considering the growth of online mode, amendment in IT Act, 2008, chapter 3, 10A, clearly explains the validity of contracts through electronic means. Conditions of a valid contract and all other provisions related to the Contract Act, 1872, must be fulfilled, and one of the main ingredients for a valid contract is free consent.

Illiteracy, casual consumer behavior, and lack of significant codified law is the most prominent concern in India for data privacy. Terms of use and privacy policies are complex and challenging to understand, and consumers rarely read them. Our geographic spread with multi-lingual issues makes this problem more complicated. Online firms pressurize consumers to sign their privacy documents or otherwise lose out on interactions. Another problem under the current state of Internet-based (click-wrap) agreements is that there is no obligation on the companies that collect this data to explain the implications of collection to the consumer. The consent given online, when examined under the law for consent as it stands today (under the Indian Contract Act, 1872), Section 10 of the IT Act, 2008, gives legislative authority to e-contracts. It says that “Where in a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances, as the case may be, are expressed in electronic form or by means of an electronic record, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose.” Section 13 of the Act contains significant provisions that obviate certain communication problems over computer networks. This section also operates only in the absence of a contract to the contrary between the parties. In other words, in the absence of an agreement to the contrary, the acceptance is dispatched when such acceptance enters a computer resource outside the originator’s control.

The role of Appellate Authority
The IT Act 2000 has established the Cyber Appellate Tribunal (section 48) as having appellate jurisdiction. An appellate authority is entitled to exercise its appellate jurisdiction both on fact and in law over a decision or order passed by the Controller of Certifying Authorities or the adjudicating officer. It is the power to examine the correctness.

Under the IT Act, orders of the CCA are directly appealable to the Cyber Appellate Tribunal. However, the Cyber Appellate Tribunal seems to be more or less defunct since it does not have any members appointed by the central government and even its last presiding officer, Justice Rajesh Tandon, retired on June 30, 2011. Later the Cyber Appellate Tribunal was merged with TDSAT. The government has taken learning from this and abolished the provision of the Tribunal for this bill.

Some click-wrap agreements are never freely consented to because they are take-it-or-leave-it, imposing unfair obligations. This includes insisting that disputes will be decided by arbitration in some other jurisdiction.

ADR, or alternate dispute mechanism, as we call it, is an alternative option to reduce the burden on legal institutions. In one way, Lokpal is also an ADR where the government’s efforts are significant to reduce the burden on legal processes. It appears from Section 89(1) of the code of Civil Procedure that a duty is cast upon the court to refer the dispute either by way of arbitration, conciliation, judicial settlement, including settlement through Lok Adalats or mediation if it appears that there are elements of the settlement. In the case of arbitration, civil courts under section 89(1) have the authority to send non-cognizable offences for arbitration, if an arbitration agreement binds the existing contract between the parties. Similarly, if parties do not have any arbitration agreement, then opt for conciliation, where either party can initiate the conciliation process. Both alternative dispute mechanism has legal binding on judgment/order.

The new Digital Data Protection Bill has provisioned the ADR mechanism for data privacy issues. Depending on the nature of local and international status, authorities will decide on the ADR mechanism.

There is an area of analysis for technical and process champions toward this Bill. And another area is the legal standpoint, which I am reviewing, and here are my observations.

In the current bill, there is a provision to reach out to the Board through registered complaints, but they need additional clarifications.

Section 21 talks about the Board constitution and its powers but misses a few critical topics:

  • There is no Appellate Court against the Board judgment/order except heading directly to the High Court (HC). Let us follow the same constitutional framework we used in CBDT cases. We should approach HC only on specific instances, where we need a significant discussion on law understanding and not for operational appeals.
  • It is good that the Board is given the power to review their orders under CPC 1908, decree execution, and leverage local police and central authorities for effective legal fulfilment. Even though bills talk about ADR, it needs to be clearly defined if the focus will be on arbitration or mediation. In what timeframe will the Board appoint ADR agencies, and will these agencies need to get registered explicitly?

(Arbitration & Conciliation Act 19916) 8B. Power of the court, seized of matters under sections 34 or 37 of the Act, to refer the dispute to Mediation or Conciliation.

  • If during the pendency of a petition under section 34 or an appeal under section 37 of the Act, it appears to the court that there exist elements of a settlement, which may be acceptable to the parties, the court may, with the consent of the parties, refer the parties, for resolution of their disputes, to: mediation; or conciliation.

Here the board may decide and refer the complaint to mediation or conciliation, which is subject to the parties agreeing (Arbitration & Conciliation Act 1996 Section 61. Application and scope.

Save as otherwise provided by any law for the time being in force. Unless the parties have otherwise agreed, this part shall apply to conciliation of disputes arising out of a legal relationship, whether contractual or not and to all proceedings relating to it.

  • This part shall not apply where certain disputes may not be submitted to conciliation by virtue of any law for the time being in force.

Section 62. Commencement of conciliation proceedings. The party initiating conciliation shall send to the other party a written invitation to conciliate under this Part, briefly identifying the subject of the dispute.

  • Conciliation proceedings shall commence when the other party accepts the invitation to conciliate in writing.
  • If the other party rejects the invitation, there will be no conciliation proceedings.
  • If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, or within such other period as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate. If he so elects, he shall inform in writing the other party accordingly.

Which brings the Data Principal to square one? The other aspect of international arbitration and conciliation has yet to be defined. Hence it can be said that in the current version of the bill, there needs to be more clarity, which would be caused without applying the learnings and proper mechanisms for dispute resolutions.

Anyone who wants to register a complaint to the Board for transactional issues or data privacy, can reach out to the Board, but the channel has yet to be defined. Is there any provision that companies and retail customers can settle cases through mediation after sending a direct request? There is still a lot to be cleared; we as citizens will have to wait for this bill to get passed in both houses and wait till the formation of the Board, who then will decide on the procedural issues governing the redressal mechanism.

This article has been co-authored and supported by Anil Porter

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