Luã Fergus Cruz, Laila Lorenzon and Laila Lorenzon (17/12/2021). Arbitration. In Belli, L.; Zingales, N. & Curzi, Y. (Eds.), Glossary of Platform Law and Policy Terms (online). FGV Direito Rio. https://platformglossary.info/arbitration/.
Authors: Luã Fergus and Laila Lorenzon
The World Intellectual Property Organization (WIPO, 2020a)1 defines ‘arbitration’ as a “procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court”. A more straightforward definition is given by the Cambridge Dictionary2 stating that the arbitration process is a way of “solving an argument between people by helping them to agree to a standard and acceptable solution”. It is essential to highlight that both sides in the dispute must agree to pursue an arbitral solution, that is, to have the matter solved through the mediation of an arbitrator.
Arbitration is a type of dispute/conflict resolution method. In its process, the parties that have previously agreed to arbitration can settle the dispute outside of the courtroom. That way, it is usually much faster than legal procedures for its informality and privacy, and the reason why this procedure is often chosen rather than the litigation process. An impartial third party, the arbitrator, resolves the disputes, and their decision is legally binding for all parties.
As for the online process of arbitration, its premise follows the same path. The difference is that conflicts can be resolved entirely online by video calls for hearings and software for uploads of evidence (documents, photos, videos, etc.). Thus, online arbitration makes it possible to resolve disputes without one having to appear in person, and, by that, it minimizes the costs of the process.
The most prominent example of online arbitration is in disputes over Internet domains (Mania, 2015)3. One can make a parallel between domain names on the Internet and the system of business identifiers protected by intellectual property rights and has existed long before the arrival of the Internet. Arbitration processes are helpful to solve conflicts regarding both issues. The most common reason for disputes over Internet domain names comes from the practice known as ‘cybersquatting’ – when a random person registers a domain name under famous people or business trademarks and offers them for sale at prices far beyond the cost of registration.
Under the Uniform Domain Name Dispute Resolution Policy (UDRP), “any domain name registered in the international domains, such as .com, is subject to this dispute resolution mechanism” (WIPO, 2020b)4. First, the parties must consent to solve their domain disputes and submit the dispute details to the chosen institution. Then, the Complaint can file a case against the entity by filling a form on WIPO’s website5. Subsequently, the entity can file a Response. The WIPO is responsible for the administrative process, with the role to ensure the absence of interests’ conflicts by choosing panelists or experts with impartiality and independence from a “roster of independent individuals qualified for deciding such cases” (WIPO, nd)6. Finally, the system notifies the parties of the decision – which they must follow.
The WIPO – which is mandated to promote the protection of intellectual property worldwide – conducted extensive consultations with members of the Internet community around the world, after which it prepared and published a report containing recommendations dealing with domain name issues7. ICANN adopted the Uniform Domain Name Dispute Resolution Policy (UDRP) based on the report’s recommendations. Under the standard dispute clause of the Terms and Conditions for registering a gTLD domain name, the registrant must submit to the UDRP proceedings. In addition, the Protocol on Cybersecurity in International Arbitration (Cybersecurity Protocol)8 guides reasonable information security measures that the parties and arbitrators can take, particularly considering increasingly virtual hearings and paperless document transfer.
An example of alternative online arbitration practices for resolving domain name conflicts is the ‘Sistema de Administração de Conflitos de Internet’, a.k.a. SACI-Adm, developed by the Internet Steering Committee in Brazil (CGI.br). This method serves to resolve disputes between the holder of a domain name in .br (Brazilian ccTLD) and any third party that disputes the legitimacy of the domain name registration made by the holder. SACI-Adm procedures’ scopes are limited to the domain’s cancellation and transfer requests, and its aspects are similar to those presented in the UDRP. The main difference between them is that in the Brazilian regulation, the .br Information and Coordination Centre (NIC.br) doesn’t allow the transfer of the domain name in conflict with the beginning of the arbitration with the SACI-Adm procedure until its termination (Angelini, 2012)9.
There’s also the “baseball-style” arbitration process used between Google and news publishers in Australia. In this form, the organization selects an arbitrator to decide the main issues in dispute between two or more parties. Such arbitration is named the ‘baseball-style’ due to the discretion exercised by the arbitration attorney to these proposals. It is also sometimes called ‘final-offer’ or ‘either/or’ arbitration because of the limits imposed upon the arbitration attorney.
It is essential to state that there’s a difference between Online Dispute Resolution (ODR) and online arbitration. ODR is a vast field and encompasses many types of dispute resolution practices that use online methods and tools to explore the convenience and efficiency of internet communications and make disputes more accessible and faster. It addresses every aspect from electronic filing of resolution process submissions and transfer of documents to online hearings. The variety of ODR can envelop interpersonal disputes, “including consumer to consumer disputes (C2C) or marital separation, to court disputes and interstate conflicts” (Petrauskas, Kybartiene, 2011)10. Online arbitration is an essential part of ODR, on the other hand. Two or more parties can solve any disagreement originating from their contractual relationship online – domain names, Business to Business (B2B) cross-border e-commerce disputes, and traditional cross-border commercial disputes (Amro, 2019)11.
- World Intellectual Property Organization – WIPO. (2020a). What is Arbitration? Available at: https://www.wipo.int/amc/en/arbitration/what-is-arb.html.
- Cambridge Dictionary. Arbitration Meaning. Available at: https://dictionary.cambridge.org/pt/dicionario/ingles/arbitration.
- Mania, K. (2015). Online dispute resolution: The future of justice. International Comparative Jurisprudence, 1(1), 76-86. Available at: https://www.sciencedirect.com/science/article/pii/S2351667415000074.
- World Intellectual Property Organization – WIPO. (2020b). WIPO’s Anti- ”Cybersquatting” Service Surpasses 50,000 Cases amid COVID-19 Surge. Available at: https://www.wipo.int/pressroom/en/articles/2020/article_0026.html.
- WIPO. (nd.) Guide to the Uniform Domain Name Dispute Resolution Policy (UDRP). Available at: https://www.wipo.int/amc/en/domains/guide/#b1.
- World Intellectual Property Organization – WIPO. (nd). Frequently Asked Questions: Internet Domain Names. Available at: https://www.wipo.int/amc/en/center/faq/domains.html#5.
- WIPO. (1999). Internet Domain Name Process. Available at: https://www.wipo.int/amc/en/processes/process1/report/index.html.
- ICCA Report. (2020). ICCA-NYC Bar-CPR Protocol on Cybersecurity in International Arbitration. Available at: https://www.arbitration-icca.org/media/14/76788479244143/icca-nyc_bar-cpr_cybersecurity_protocol_for_ international_arbitration_-_print_version.pdf.
- Angelini, Kelli. (2012). SACI: o Sistema Administrativo de Conflitos de Internet implementado para domínios no “.br”.
- Petrauskas, F., Kybartienè, E. (2011). Online dispute resolution in consumer disputes. Jurisprudencija, 18(3).
- Amro, I. (2019). Online Arbitration in Theory and in Practice: A Comparative Study of Cross-border Commercial Transactions in Common Law and Civil Law Countries. Cambridge Scholars Publishing. Available at: http://arbitrationblog.kluwerarbitration.com/2019/04/11/online-arbitration-in-theory-and-in-practice-a-comparative-study-in-common-law-and-civil-law- countries/?doing_wp_cron=1592416143.9425508975982666015625.