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Data Protection in Online Dispute Resolution

Author: Shweta Pandey

Student LLM (Corporate and Commercial Laws)

National University of Study and Research in Law, Ranchi


The unprovoked pandemic has made the virtual regime the new normal. People are carrying out their major work through the assistance of technology. While some have become dependent on technologies, there has been a rise in people who are embracing the new technology. Where this has been the current situation, the traditional system of litigating has also moved a step ahead and courts have actually started utilising the modern amenities to resolve disputes. The introduction of ICT in the legal sector has been able to successfully contribute to settlement of disputes. This new way has paved way for the application of Online Dispute Resolution methods in India. This new platform for dispute resolution has been able to contribute to resolve disputes amicably and has at the same time saved the court from other additional cases. ICT has contributed in settling of disputes in the COVID-19 pandemic and has also helped in eradicating a bigger problem which is that of pendency of cases. Through this new system, the Court has been able to continue its legal proceedings and at the same time settle cases. The use of ODR platforms not only in the current pandemic, but also in future would help parties to resolve their disputes without even having to visit the Court or Arbitration Centre. There are numerous advantages of adopting ODR as a settlement mechanism but an unaddressed issue which is yet developing is that of data privacy. The question of confidentiality is that of utmost importance and cannot be conceded with.

Protection under the Indian Legal System

While confidentiality cannot be compromised, it is the duty of online dispute resolution platforms to protect such data inferred from the clients and use them explicitly for the settlement of disputes only. Many a times, with regard to commercial disputes some commercially sensitive information which would be beneficial to contenders would affect the competition in the market. This protection of data shall be done with solidarity to the existing legal framework and at the same time maintains accountability.

With respect to the Indian legal framework, pertaining to the provisions of Data Privacy there have been numerous bills passed in this regard. The verdict of the K.S Puttaswamy case, had thrown light upon the issue of personal data security. The very principle of data protection of individuals emanates from this case. It was after this case the necessity of data protection was felt. If the Information Technology Act of 2000 is to be considered, it provides protection in the form of damages in the event of unlawful disclosure of information in violation of the law and the lack of data protection and criminal liability. Data security is a major concern because it protects people's right to privacy, additional stolen data may be a concern as it may be misused for personal gain and may cause harm to another person. Section 43A of the Information Technology Act of 2000 imposes civil liability on corporate entities dealing with confidential personal data, in the event that the data is not protected. Section 72 and Section 72A of the Information Technology Act of 2000 impose criminal liability for breach of confidentiality or valid contract. Section 72 of the Law imposes responsibility for violation of privacy and confidentiality and Section 72A for disclosure of information in violation of the law contract. The technology is ever evolving from time to time, but the aforementioned provisions are almost a decade old and should evolve accordingly with technology. The redundancy is the law lead to the creation of Personal Data Protection Bill, 2019 which is yet to receive the assent and come into action.

Other Rules

However, these safeguards under the IT Act of 2000 indirectly safeguard use of personal data for any object other than what it was required for. The online platforms act in accordance with these norms and make sure to maintain the confidentiality in the proceedings. Apart from these rules, the institutional rules also apply to the parties. Since redundancy of laws cannot be an excuse for the lack of protection of data, there are various norms governing ODR practices globally. The UNICTRAL Rules of online dispute resolution provides for suggestions which online settlement platforms must take into account. The Ethical Principles of Online Dispute Resolution lays out principles to ease out the process of resolution with quality and efficiency. Another important aspect which these platforms shall take cognizance of is safeguarding the information collected and protecting them against illicit access. The parties shall also be made aware to protect their data and other confidential documents. The online dispute resolution platforms shall refer to Rule 5(8) of the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 which provides for guidelines which are to be followed by corporate entities while collecting information. Rule 8 shall also be referred in this regard which provides for reasonable security measures which can be implemented by entities.


Though online dispute resolution has paved its way and has gained prominence as the next-gen dispute resolution system, it shall also keep in mind the vulnerabilities involved in the process. ODR is a fusion of legal and technological perspective and is therefore susceptible to many fatalities. Therefore, every reasonable effort is to be made to ensure that data and communication between parties and other entities linked to ODR processes are secure to the fullest extent of the law, making known limitations transparent. However, the ODR platforms cannot function in solidary without any solid backing. The government shall fill in the void and make the laws competent enough to address such issues which we are likely to face. One way of doing this is by adopting methods used by the foreign countries in this regards and evolve in the same manner. This would also help eradicate the hurdles coming in the way of settlement through ODR.

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