India May Be A Hub For Online Dispute Resolution Soon

Institutional arbitration has always been a big challenge for India. We have seen many great institutional arbitration efforts in India but by and large they failed to make a global impact. This is equally applicable to various projects, products and services that are made in India as neither govt policy nor govt support is there to strengthen such efforts of private players. Govt lacks the capabilities and capacities to launch and manage such much needed projects, products and services and private players are not supported by Indian govt due to its excessive bureaucratic mentality.

All good efforts are stifled by our politicians and bureaucrats in India and then our govt asks why we cannot make world class projects, products and services? The answer to this problem is very simple. Just bring ease of doing business in India by bringing suitable policies, removing bureaucratic hurdles and appointing hard working and honest politicians who actually work at the ground level with various stakeholders instead of sitting in their AC rooms and merely dictating policies and schemes that are never implemented.

Take a simple example of startups and MSMEs of India. On paper they may be entitled to crores of financial aid and loans but on ground they are not given loan of even a single rupee. Most of the startups and MSMEs have closed their businesses in India as businesses cannot be run upon mere empty promises and on paper schemes. Now apply this situation to arbitration and online dispute resolution (ODR) and you can see why India failed to make its mark in the world in these fields.

Compare this situation with foreign countries. Our startups have received many funding proposals from foreign countries and all that is required is to establish our startup in those jurisdictions. But if we establish our startups there how would India be a place where world class projects, products and services would be launched? Many startup unicorns have already a foreign base where their parent company is located and their subsidiary is incorporated in India. As a result, India is facing severe brain drain and commercial losses all because of its lack of support for startups and excessive bureaucratic hurdles.

For long some Asian countries have dominated the space of Alternative Dispute Resolution (ADR) and India could not perform well on this front despite a sound judicial system and qualified lawyers and Arbitrators. There are many reason why India could not excel in ADR field. The chief among them is that there is very little focus upon institutional arbitration in India and a majority of arbitration proceeding in India are managed at individual level. We are not saying that there are no institutional arbitration centres in India. What we are saying is that these institutions failed to create confidence among global stakeholders that institutional arbitration can be managed in India with qualitative results.

There was a policy vacuum in this regard until Indian govt enacted The New Delhi International Arbitration Centre Ordinance, 2019 and later on converted it into The New Delhi International Arbitration Centre Act, 2019. So now we have a policy and regulatory framework that is promoting, regulating and encouraging institutional arbitration in India, along with many more pro active policies and decisions. Now the next logical step of Indian govt should be to encourage ODR in India either on a public private partnership (PPP) model basis or by financially supporting those startups who are already managing ODR projects and services.

India is facing severe financial crunch and this explains why govt cannot help startups and MSMEs. Even banks are not willing to help them despite RBI declaring both startups and MSMEs as priority sector lending areas. Startups have assets in the form of ideas, software, online portals, trademarks, etc whose valuation banks fail to estimate and understand. It is difficult to convince PSU banks and private banks to give loans to such startups based on their digital assets and models. Naturally, banks ask for collateral security to cover their risks and here govt’s credit guarantee schemes fail to help such startups and MSMEs. These guarantee schemes are on papers alone and no PSUs has any intention and mechanism to use them to support startups and MSMEs. Govt may have successfully recapitalised Indian PSU banks but it has played no role to support startups and MSMEs and more importantly to recover crores of money from people who have defrauded these banks.

Despite this situation there are some startups who are still working day and night to make Indian products, projects and services best in the world. They are mostly bootstrapped but the Covid-19 pandemic has taken a toll upon their financial resources. If not supported right now, they may close their businesses too. They do not have time to wait for April 2021 as previous promises and schemes declared years back are yet to be implemented. The govt may extend this April 2021 date to April 2022 by not acting at all, as happened in the past, when it must actually start financially supporting them right now.

Meanwhile, we at Techno Legal Centre Of Excellence For Online Dispute Resolution In India (TLCEODRI) have started incubating ODR startups under our TLCEODRI Incubator. Our ODR startups like ODR India and Resolve Without Litigation (ODR) have been incubated under TLCEODRI. They are also supported by our DPIIT recognised LegalTech startup TeleLaw. We are upgrading their websites so that techno legal ODR services can be provided to national and international stakeholders. More details about them would be shared soon at the ODR Forum of TLCEODRI.

The main aim of TLCEODRI is to make India a global hub for ODR institutions and ODR services. To achieve this objective, TLCEODRI Incubator would help a selective ODR startups to develop their products and services and to grow at global level. The selection criteria would be very strict and only genuine, hard working and committed ODR startups would be incubated under it. All startups that are PR fronts would be rejected from such incubation process. In short, we would judge your startup on its strength and not the number of recommendations and letters it has taken from govt or similar stakeholders.

Till the incubation process is formally established, please contact us with your incubation request with complete details of your ODR startup. We would guide you about the incubation process once your ODR startup is approved by our team. Let us together make India a global hub for ODR.