Considering the rapid increase in the number of internet users and the encompassing growth of the World Wide Web, it is all too likely that virtual conflicts can occur and that they will need to be addressed like any real life dispute.

The On-line Dispute Resolution (ODR) has come to light as an adaptation of the Alternative Dispute Resolution (ADR); i.e. arbitration, mediation and conciliation, with the new requirements of technology and the emergence of the new virtual society.

Thus, the ODR is intended to settle on – line litigations in an efficient, flexible, quick and relatively cheap way.

In essence, virtual arbitration is not very different from the ordinary off line arbitration. It is an extrajudicial way of dispute settlement based essentially on the intervention of a neutral third party who renders a decision that has to be enforced, with the difference that in on – line arbitration, parties communicate with the arbitrator and submit their documents, evidences and arguments electronically via emails, teleconferences, instant messengers, etc.

However, the implementation of virtual arbitration is not as easy as it first appears and the “traditional” arbitration cannot be automatically transposed into the electronic environment. The particularities of the cyberspace undoubtedly affect the on – line arbitration, its procedures, its functioning and its final results (Part I).

So far, the legal community has not yet resolved all the legal problems facing on – line arbitration. As a result, the few on – line arbitration courts and institutions which were launched on the net find difficulties in attracting Internet users and in winning their trust (Part II).


1 – The particularity of cyberspace

1-1- The legal relationships

As “Internet is the network of networks” and is globally accessed and universally used, conflicts may naturally rise between internet surfers.

These disputes can be classified into three major categories:

  1. Disputes relating to the Web’s infrastructure further to the refusal of access based on discriminatory causes, rates fixing, etc.
  2. Disputes relating to the information circulation such as issues with regard private life, personal reputation, pornography, dangerous or false information, intellectual property rights, etc.
  3. Disputes relating to exchanges and dealings such as contractual disputes, consumption, etc.

These legal relationships have a trans-border character. They are born and they take effect in an open environment where interconnection is unlimited and where geographic location no longer matters.

Consequently, the difficulty related to a dispute on the Net rises from the fact that the virtual litigation is located in a “territory” which has not been flagged yet by specific legal rules as it involves parties subject to different legal systems and cultures.

Here, national laws cannot face multiple elements of attachment and a universal accumulation of legislative and jurisdictional competences. Similarly, international laws are not in a better position to resolve this dilemma. They can neither manage to harmonize all national standards, nor to solve problems with regards jurisdictions and conflict of laws.

Though internet has facilitated the globalization of trade, contributed to the lifting of barriers, tailoring of the costs and developing of the electronic commerce1, it is nonetheless to point out that the legal rules to be applicable to the cyberspace are becoming more and more difficult to harmonize because of their heterogeneity. Indeed, some authors consider that the electronic environment raise the…deep structural differences which exist between the regime of contractual responsibility in civil law and the theory of breach of contract in common law.

Virtual arbitration is supposed to take into consideration all these aspects when solving a dispute between Internet users. It is also supposed to take into consideration the specificity of the electronic ways of communications. An arbitrator, in virtual arbitration, is behind his/her keyboard and the information about the litigation in question is communicated to him electronically by parties in the four sides of the world. Thus, the on – line arbitration methods and procedures will be different from those of the off line ones.

1-2 The methods and procedures

Technology has certainly an important role in regulating virtual disputes. Currently, it is possible to communicate on Internet through emails, chat rooms and teleconferences.

A general observation of virtual arbitration has showed that emailing is the most used method of communication enabling parties not only to communicate quickly and efficiently but also to attach written texts or even audio and video documents to their messages. For more security, parties can attach their electronic signatures as well.

Sometimes, it is necessary that parties have a direct confrontation and that the arbitrator receives their testimonies. Chat rooms, as a forum of written conversations, provide a useful means to confront people located in different parts of the world. Nonetheless, this method suffers from some disadvantages, the most important of which lies in the fact that is generally harder to communicate by typing on a keyboard than to talk. In this sense, H.H.Jr. Perrit considers that “The face to face portions are more difficult. As multimedia becomes common, recorded audio and video testimony within the adjudication database is conceivable. Until the most that can be done in a purely network environment is interactive argument and presentation through a “chat” feature. It is far from clear, however, that this mode of electronic dispute resolution would be efficient because people type more slowly than they talk”.

The handicap of chat rooms can be, however, avoided by another medium of communication: teleconferencing. This method has the advantage of securing a more direct and thus a more efficient way of confrontation. Besides, it has been noticed that it is much harder for a person to lie when he/she is speaking live. Thus, teleconferencing can ensure a more reliable testimony.

The particularity of the legal relationships involved in a dispute which has to be settled by virtual arbitration and the particularity of the information communication media in order to settle such a dispute will influence the arbitration process and will deeply determine the differences between the off line and the on – line arbitration.

2 -The particularities of virtual arbitration

Besides the highly complex relationships involved in this kind of arbitration and besides its new procedures and methods, virtual arbitration faces three major legal issues: the requirement of formalism, the applicable law and the arbitration award and its exequatur.

2.1. The requirement of formalism

In “traditional” arbitration, almost all national laws4 and international agreements require that the arbitration clause or agreement must be in writing and must be signed by the parties involved. Is the requirement of a written consent to enter into an arbitration agreement necessary in virtual arbitration?

In on – line arbitration, the arbitration clause or agreement is absent and instead it is replaced by the “click-wrap contract” where an arbitration offer is included in a virtual adhesion contract and the user’s acceptation of this contract is simply expressed by clicking on the “click here if you accept” icon.

The legal community appears to be following these new aspects of the legal relationships set forth by technology evolution. An observation of some recent legal texts shows, in fact, an enlargement in the meaning of “writing”6. For instance, the Tunisian legislator added a new Article to the Code of Obligations and Contracts by the law n°2000-57 of June 13th, 2000, so the new Article 453 (bis) states: “The electronic document is a writing composed of a set of letters and numbers or other numeric signs including the one exchanged by communication media, under the condition that it is of an intelligible content and is archived on an electronic support which guarantees its reading and consultation when needed. The electronic document is evidence as a private deed if it is conserved in its final form by a reliable process and is reinforced by an electronic signature”.

Even if it seems to be admitted that formalism is not anymore the antonym of electronic, virtual relationships are still affecting the applicable law and the arbitral award.

2.2 The applicable law to virtual arbitration

Were the parties omit to specify the applicable law relevant to the virtual arbitration; the arbitrator will face the problem of determining the applicable law to the litigation.

As it was analysed above, the trans-boarder aspect of virtual relationships would prevent the arbitrator from determining the real element of attachment in order to apply the appropriate law in application of the ordinary rule of conflict of laws.

In such on – line arbitration, the attachment criteria (place of conclusion of the contract, place of arbitration, etc.) become meaningless since on – line relationships are themselves delocalised and geographically independent.

An original solution to this problem was suggested by the legal community which recommended the creation of Internet courts. These courts would apply specific rules to the cyberspace environment and the body of these rules would, in the long term, constitute “the lex electronicae” or the “lex cyberneticae” in analogy to “the lex mercatoria”.

This solution would show its effects in the long term since the accumulation of a “lex cyberneticae” needs time and needs the elaboration of courts’ precedents. These effects can be further delayed by the fact that the current virtual arbitration courts rarely publish their decisions if at all. So until then, how could the problem of the virtual arbitration applicable law be tackled? And in case the necessary rules are put in place, will the on – line arbitral awards be easily enforced?

2-3 The arbitral award

It is certainly the enforcement of the virtual arbitral award that represents the most problematic part in the virtual arbitration process.

A preliminary observation with regards the exequatur of an on – line arbitral award is related to the form of the award.

In many national and international laws, the award is not required to be in writing; however, in case of an enforcement claim, the claiming party should provide the original of the award or a certified copy of it. For instance, the Tunisian Code of Arbitration in its Article 80 (2) states that: “La partie qui invoque une sentence arbitrale ou qui en demande l’exécution doit en produire l’original dûment authentifié ou une copie certifiée conforme…”.

This condition does not seem to be possible on the Web since virtual arbitration lacks the written support. In order to overcome this difficulty, it was recommended that the arbitrator who has electronically rendered his decision, sends the text of this decision in writing to both parties with his signature on it.

Assuming that the court before which a party is asking to enforce the award has accepted to consider the case on exequatur, the exequatur judge would have to examine whether the award complies with the procedural principles, the right of defence and the public order of the State where this leave of enforcement is requested. These principles are fundamental, at least in the “traditional” arbitration procedure.

Because of the particularities of virtual arbitration, the exequatur of a virtual arbitral award may probably be denied and the entire process could finally find itself pointless unless the legal community decides to take new steps forward to facilitate integration of virtual arbitration awards. In fact, several virtual arbitration bodies have seen the light during the last few years.


Several virtual arbitration experiences have seen the light during the last few years (1). Unfortunately, a general observation reveals that the results did not reach the expectations’ level; many reasons lay behind the mistrust of Internet users to seize the on – line arbitration (2).

1- On – line arbitration institutions

1-1- The Virtual Magistrate

In 1995, the “National Centre for Automated Information Research (NCAIR)” together with the “Cyber Law Institute” have created the Virtual Magistrate as an experimental project. Then in 1999, the project’s responsibility was transferred to Chicago Kent College of Law in the Illinois Institute of Technology.

The Virtual Magistrate’s mission is to solve disputes between the Internet’s users and the System Operators. Its scope of litigations’ settlement is limited to “complaints, about messages, postings and files allegedly involving copyright or trademark infringement, misappropriation of trade secret, defamation, fraud, deceptive trade practices, inappropriate (obscene, lewd or otherwise violative of system rules) materials, invasion of privacy, and other wrongful content”. The accounting and financial issues are excluded from the Virtual Magistrate’s scope.

The filing of complaints and communications between the parties and the Virtual Magistrate arbitration program takes place through e-mail. The Virtual Magistrate arbitration program provides notice to all parties and persons in interest. Each arbitrator will attempt to reach a decision within 72 hours (three business days) after acceptance of a complaint.

In solving litigations, the Virtual Magistrate does not systematically apply the law of a special jurisdiction but instead “it will consider the circumstances of each complaint, the views of the parties about applicable legal principles and remedies, and the likely outcome in any ultimate litigation or dispute resolution”.

1-2- The Cyber Tribunal

The Cyber Tribunal is a project of the “Centre de Recherche en Droit Public in Montreal (CRDP)” created in 1998. Its scope is larger than the Virtual Magistrate since it includes electronic commerce, competition law, writer law, trade marks, private life…

The Cyber Tribunal’s purpose is to participate in elaborating a lex cyberneticae by stating and publishing its awards.

Nevertheless, the access to the arbitration process in order to start a claim was blocked a few years ago.

If the Cyber Tribunal had lived longer, it probably would have been of major importance in solving the problems encountered by virtual arbitration in general. In fact, this body had the particularity of being the child idea of the CRDP; an institution located in a legally bicultural environment (i.e. Canada) that is bedding both Common and Civil Law. This experience, if it had succeeded, could have brought forth more law comparison and, thus, more law harmonisation.

1-3- The Internet Corporation Assigned Names and Numbers (ICANN)

ICANN is an internationally organized non-profit corporation created in 1998 and which has responsibility for Internet Protocol (IP) address space allocation, protocol identifier assignment, generic (gTLD) and country code (ccTLD) Top-Level Domain name system management, and root server system management functions”.

The ICANN resolves disputes related to these matters via on – line arbitration. It has implemented a Uniform Domain Name Dispute Resolution Policy (UDRP) which has been used to resolve more than 5000 disputes over the rights to domain names (according to its web site). The UDRP is designed to be efficient and cost effective.

1-4- The WIPO Arbitration and Mediation Centre:

The World Intellectual Property Organization has established in 1994 in Geneva the Arbitration and Mediation Centre which has created an on – line arbitration procedure: the WIPO Electronic Case Facility (ECAF).

The WIPO ECAF allows parties and all other actors in a case under the WIPO Mediation, Arbitration, Expedited Arbitration and Expert Determination Rules to submit communications electronically into an online docket. Parties receive email alerts of any such submission being made and may view and search this docket at any time.

The WIPO ECAF undertakes to guarantee the confidentiality of the documents electronically exchanged to the purpose of the case under arbitration.

2- Reasons behind the virtual arbitration’s short attractiveness

Virtual arbitration is relatively a new born institution which Internet users are not used to. Its acceptance is conditioned by succeeding in securing several requirements, especially confidentiality, effectiveness…

2-1- The confidentiality requirement

On internet, perfect security cannot be reached. This makes Internet users even more hesitating to submit their disputes to the on – line arbitration.

The principle of confidentiality in arbitration requires that the parties and the arbitrator do not reveal information; documents related to the case and do not disclose the final arbitral award.

In many cases, big companies or well-known businessmen prefer “traditional” arbitration because there is a guaranteed confidentiality which allows them to protect their reputation and to keep their secrets safe.

In order to secure the confidentiality requirement, on – line arbitration institutions have chosen to establish a mechanism based on obtaining a ‘client code’ and an ‘access code’ for each party.

Nevertheless, Internet users remain reluctant because they are not convinced that on – line arbitration institutions are safe. It doesn’t help them as well to hear that the most secure web sites (such as those related to national security) can be hacked (i.e. pirated).

2-2- The transparency requirement

The transparency and the independence of the virtual arbitration institution referred to are very important in the eyes of parties involved in a dispute. They have to be sure that they are dealing with a trustworthy institution that is completely neutral (as regards to politics, race, gender,etc). They are also interested in knowing about the financial resources of this institution and in making sure that the arbitrators dealing with their cases are impartial.

These requirements are hard to be checked on – line as it has been observed that the on – line arbitration institutions do not communicate these information to the Internet users on their web sites.

The interested parties, for lack of better knowledge about the on – line institution they are dealing with, are often suspicious and even reluctant to submit their dispute for settlement.

2-3- The authenticity of the evidences

A major problem is raised also with respect to the authenticity of the evidences that are electronically submitted by the parties involved in a dispute before a virtual arbitration court.

In fact, how can these evidences are authenticated? Would an alternative solution be to send the documents according to the “traditional” way or should one appeal to further technologies to help authenticate the evidences?

2-4- The problem of language and terminology

A same term in a same language can be differently understood by different persons. The problem is more serious when the involved parties speak different languages or have different legal backgrounds.

Several problems can arise because of a minor misunderstanding or a slight difference in perception and this can become crucial in solving a dispute.


Internet users are still hesitant vis à vis the virtual arbitration as they are reluctant to be involved in a procedure that they perceive risky and where the enforcement of the final decision is not always guaranteed.

Their attitude is understandable since on – line arbitration is more or less in its early stages and needs to reach maturity before it gets many more users and adepts.

The difficulties that are encountered here are not only specific to virtual arbitration but are common to many of the other human endeavors that are being strongly impacted by the new technologies.

Leave a Comment

Your email address will not be published.