EXISTING LEGISLATION AIDING ODR

India’s ODR adoption requires a strong legal framework to ensure enforceability and seamless integration into the existing legal system. While progress has been made, a more comprehensive approach is necessary to formalize ODR across various sectors. The current legal framework provides a foundation for ODR through key statutes, judicial precedents, and regulatory guidelines, some of which are referred below.

1. The Arbitration and Conciliation Act, 1996 (“Arbitration Act”): Section 7 of the Arbitration Act, read with Section 4 & 5 of Information Technology Act, 2000 (“IT Act”), make arbitration agreements executed electronically, valid. Section 19 of Arbitration Act grants arbitral tribunals the flexibility to determine their procedure, which can include digital arbitration proceedings. However, explicit provisions recognizing ODR within the Act could enhance its credibility and usage.
2. The Code of Civil Procedure, 1908 (“CPC”): Section 89 promotes mediation, arbitration, conciliation, and judicial settlement. The Family Courts Act, 1984^[1], encourages settlement through mediation. Accordingly, courts may be encouraged to refer matters to ODR platforms under these provisions, particularly for commercial and family disputes containing limited questions of law.
3. The Consumer Protection Act, 2019: Introduced e-filing and virtual hearings for consumer disputes. The Department of Consumer Affairs has taken initiatives which support the adoption of ODR mechanisms in e-commerce disputes.^[2] The Consumer Protection (E-Commerce) Rules, 2020, mandates that platforms establish internal grievance redressal mechanisms.^[3]
4. The Commercial Courts Act, 2015: Section 12A emphasizes the importance of pre-institution mediation. Recognizing digital mediation and ODR platforms as valid mediation methods within the Act could reduce litigation timelines and improve India’s ease of doing business rankings.
5. Bharatiya Sakshya Adhiniyam, 2023 (“BSA”): BSA adapts to technological developments by recognising statements given electronically as “evidence” under section 2(1)(e) and Section 62 and 63 enable the admissibility of electronic records, including audio CDs and video conferencing recordings, as evidence.

APPROACH OF JUDICIARY

Early references to some aspects of ODR can be traced back to 2009 when the Hon’ble Supreme Court of India upheld the validity of electronic contracts in Shakti Bhog Foods Ltd. v. Kola Shipping Ltd^[4], affirming that agreements executed digitally meet the requirements under Section 4 & 5 of the Information Technology Act, 2000. In Trimex International FZE v. Vedanta Aluminium Ltd.^[5], the Hon’ble Supreme Court further confirmed that electronic communications such as emails could constitute valid arbitration agreements under the Arbitration Act (provided they met the statutory requirements) reinforcing digital arbitration’s legal standing.

Even Hon’ble Mr. Justice N.V. Ramana ( Former. Chief Justice, Supreme Court of India), emphasized ODR’s effectiveness, citing its role in resolving over 3.94 million cases despite the pandemic.^[6] The introduction of SUVAS (Supreme Court Vidhik Anuvaad Software), an AI-powered judicial translation tool, further advanced India’s digital dispute resolution landscape.

In 2019, the Nandan Nilekani-led High-Level Committee on Deepening Digital Payments, established by the RBI, recommended a two tier ODR system for digital transaction disputes: with automated resolution at first, followed by human intervention for unresolved cases, with an appellate mechanism ensuring fairness.^[7] This report marked a pivotal step in integrating ODR in disputes related to consumer protection and financial transactions.

APPROACH OF REGULATORY BODIES

Various regulatory bodies have also taken proactive measures to integrate ODR into dispute resolution frameworks. The National Internet Exchange of India (“NIXI”) established ‘.IN Domain Name Dispute Resolution Policy’ (“INDRP”)^[8] as early as 2006, for online domain name dispute resolution. The Ministry of Micro, Small, and Medium Enterprises (“MSME”) launched the SAMADHAAN portal^[9], enabled  small businesses to file payment related disputes online, while the Income Tax Department’s E-Assessment Scheme (“EAS”) fosters a digital-first tax resolution approach.

In 2020, NITI Aayog hosted a meeting on ‘Catalyzing Online Dispute Resolution in India’^[10], engaging stakeholders from the judiciary, government, and private sector to explore ODR’s role in improving access to justice, ease of doing business, and economic revival by enabling speedy and cost-effective dispute resolution. It highlighted ODR’s effectiveness in resolving low-value and high-volume disputes in sectors like e-commerce, banking, and consumer grievances.

The private sector has also embraced ODR. PayPal India launched an online dispute resolution centre for mediation of consumer disputes^[11], NestAway implemented ODR to resolve disputes between landlords and tenants^[12] and platforms like Sama, Presolv360, Centre for Online Resolution of Disputes (“CORD”), and CADRE provides specialized online mediation and arbitration services across various sectors.^[13]

With judicial support, regulatory efforts and private sector adoption, India is on the brink of an ODR revolution. However, to achieve widespread adoption and institutional legitimacy, challenges related to infrastructure, regulation and behavioural adaptation must be addressed to ensure ODR is accessible, secure, and widely accepted mode of dispute resolution.

POLICY FRAMEWORK FOR ODR IN INDIA

The Indian government has also recognized ODR’s potential and introduced policy frameworks and research-backed recommendations aimed at promoting ODR adoption across sectors. Key initiatives include NITI Aayog’s ODR policy framework and Vidhi Centre for Legal Policy’s recommendations.

NITI Aayog’s ‘Designing the Future of Dispute Resolution: The ODR Policy Plan for India’^[14] outlines a structured, scalable ODR ecosystem in India. It advocates a phased adoption of ODR, starting with e-commerce, digital payments, and financial services. The policy highlights cost-effectiveness, accessibility, and efficiency of ODR while addressing challenges like the digital divide, lack of awareness, and regulatory gaps.^[15] The report proposes a public-private collaboration model, where ODR service providers work with government bodies, regulators, and businesses to streamline dispute resolution. It also advocates for mandatory pre-litigation ODR, for low-value disputes through online mediation or arbitration before reaching courts. Further, the policy highlights the need for standardized protocols, secure digital infrastructure, and strong data privacy mechanisms to ensure trust in ODR platforms. The policy also outlines the role of key stakeholders, including regulatory authorities like the RBI, SEBI, and TRAI, in mainstreaming ODR in their respective sectors.

The Vidhi Centre for Legal Policy’s ODR Report^[16] built on the NITI Aayog’s framework calls for statutory recognition of ODR under various laws such as the Arbitration Act, Consumer Protection Act, and Commercial Courts Act. Key recommendations includes Court-annexed ODR allowing virtual arbitration, online mediation, and AI-driven dispute resolution and Accreditation of ODR platforms to ensure adherence to ethical, technological, and procedural best practices. The report also highlights the role of judiciary-driven initiatives, such as the Supreme Court’s e-Courts project, and suggests integrating ODR modules within virtual court systems.^[17] Furthermore, it stresses the importance of capacity-building programs to train legal professionals, arbitrators, and mediators in handling technology-driven dispute resolution processes. Vidhi’s policy framework presents a roadmap for both legislative and infrastructural reforms, advocating for a decentralized, tech-enabled justice system that can reduce court backlogs while enhancing access to justice.^[18]

SEBI ODR Framework: SEBI has introduced significant enhancements to its Online Dispute Resolution (ODR) framework to make securities market dispute resolution clearer, faster, and more efficient, aligning with India’s broader push for technology-enabled justice. A key improvement is a single, user-friendly online portal that serves as a one-stop shop for investors and market intermediaries to file complaints, upload documents, and track case status in real time. The ODR’s scope now expressly covers depositories, bringing the entire securities market under a unified mechanism.

To accelerate outcomes, SEBI now permits direct arbitration for specified categories of disputes. Previously, all matters had to pass through mandatory conciliation, which often delayed resolution when settlement was unlikely. Under the new regime, high-value claims (such as those of ₹10 crore and above) and repeat complaints can bypass conciliation and proceed straight to arbitration for a final, binding award. This fast-track pathway reduces both time and cost, delivering quicker finality.

To strengthen integrity and transparency, SEBI requires distinct panels for conciliators and arbitrators to avoid conflicts of interest. The process will be governed by publicly available Standard Operating Procedures, and fees will follow a fixed, transparent schedule calibrated to the claim value. Collectively, these measures modernizes dispute resolution and enhances reliability across India’s Securities markets.

RELEVANCE AND STAKEHOLDERS: WHO BENEFITS FROM ODR IN INDIA

ODR’s true potential lies in its adaptability across diverse sectors and stakeholders. In India, its early adopters have largely been businesses, financial institutions, and consumer-facing enterprises, where high transaction volumes and recurring disputes necessitate swift and low-cost resolution.

Business Houses and Corporates increasingly recognizes ODR as a strategic tool for managing contractual, supply-chain, and employment-related disputes. For organizations operating across multiple jurisdictions, ODR eliminates geographical constraints and reduces administrative overheads. It also enhances business continuity by minimizing litigation time and preserving commercial relationships through technology-enabled mediation and negotiation.

Financial and Lending Institutions have been at the forefront of this transition. Several non-banking finance companies (“NBFCs”), fintech entities, and credit platforms have begun incorporating ODR clauses within their customer agreements, particularly for loan recovery, repayment defaults, and digital transaction disputes. This approach aligns with regulatory expectations from bodies like the RBI and SEBI, which increasingly advocate for structured ODR mechanisms to handle high-volume, low-value claims in financial transactions.

For small and medium enterprises (“SMEs”), ODR represents not just efficiency but empowerment providing access to dispute resolution without the prohibitive costs of formal litigation or arbitration.

As more businesses integrate ODR clauses into their standard agreements, India is witnessing a gradual but definitive shift from reactive dispute handling to proactive dispute management. In this sense, ODR is not merely a legal reform it is an emerging business practice integral to the country’s digital economy.

CHALLENGES IN IMPLEMENTATION

While ODR presents a transformative approach to dispute resolution, making justice more accessible, efficient, and cost-effective, its integration into India’s legal framework comes with several challenges. These challenges range from structural and infrastructural issues to behavioural and operational barriers that must be addressed for ODR to become a widely accepted mechanism.

Bridging the Digital Divide: A roadblock to inclusion

ODR depends on technology, but India’s digital access remains uneven. Urban centres benefit from reliable connectivity, while rural and economically weaker regions continue to face digital exclusion. The National Broadband Mission^[19] seeks to bridge this gap, yet until digital access and literacy are universal, ODR’s reach will remain limited. True inclusion requires not just connectivity but the capacity of every citizen to effectively participate in digital proceedings.

Legal Gaps: The Missing Puzzle Piece

While the Arbitration and Conciliation Act and the IT Act provide partial recognition to ODR, India still lacks a dedicated legal framework governing its procedures, enforcement, and ethical standards. The absence of a uniform statute creates ambiguity and inconsistent practices. A standardized regulatory framework defining platform roles, procedural safeguards, and enforceability is critical to legitimizing ODR as a mainstream mechanism

Trust Deficit: Overcoming Resistance to Change

Centuries of association between justice and physical courtrooms make digital resolution unfamiliar and, for many, unreliable. Concerns over fairness, impartiality, and enforceability persist, compounded by the lack of accreditation standards for ODR platforms. Judicial endorsement, awareness initiatives, and regulatory oversight will be crucial to building credibility and public confidence.

Data Privacy and Cybersecurity: Protecting Digital Justice

ODR’s reliance on cloud systems, video conferencing, and electronic records heightens risks of data breaches and unauthorized access. Compliance with the Digital Personal Data Protection Act, 2023, and the adoption of robust encryption, secure digital identities, and strict access controls are essential to protect digital justice and foster trust in ODR systems.

CONCLUSION

In parallel, data protection and cybersecurity must evolve from ancillary concerns to central pillars of digital justice, ensuring that technological convenience does not compromise procedural integrity or privacy. Public–private collaboration can further accelerate innovation, standard-setting, and platform interoperability, helping ODR mature from isolated experiments to a unified ecosystem.

As ODR evolves, the role of AI will become increasingly significant. Globally, initiatives such as the International Centre for Dispute Resolution’s (“ICDR”) pilot programme introducing AI-assisted arbitrators for document-only construction disputes illustrate how technology can complement, rather than replace, human adjudication. In this model, AI tools assists in drafting awards based on structured prompts, while human arbitrators verify reasoning and accuracy. Such developments reflect a broader trend towards integrating AI to enhance efficiency and consistency in dispute resolution.

While immediate focus in our arbitration regime must remain on strengthening foundational ODR infrastructure, these international experiences offer valuable insights into how assistive technologies could, in time, support procedural efficiency within India’s evolving digital justice ecosystem. Ultimately, the success of ODR in India will not be measured merely by the number of disputes resolved online but by its ability to democratize access to justice, particularly for individuals and small enterprises historically excluded from formal legal processes. As India advances toward a digital-first economy, it must simultaneously build a digital-first justice system one that is efficient, transparent, and resilient.

If the twentieth century was defined by the expansion of the courtroom, the twenty-first will be defined by the expansion of digital justice. The time has come for India to move beyond adopting ODR as an alternative to embrace it as a core component of its justice architecture.

Footnote

[1] Section 9 of Family Courts Act, 1984

[2] Initiatives by Department of Consumer Affairs like launch of e-jagriti and e-daakhil portals

[3] Rule 4(4) of Consumer Protection (E-Commerce) Rules, 2020, Ministry of Consumer Affairs, Food & Public Distribution

[4] Shakti Bhog Foods Ltd. v. Kola Shipping Ltd., (2009) 2 S.C.C. 134

[5] Trimex Int’l FZE v. Vedanta Aluminium Ltd., (2010) 3 S.C.C. 1

[6] N.V. Ramana, Chief Justice of India, Speech at the India-Singapore Mediation Summit (July 17, 2021), available at https://mediationmantras.com/2021/07/keynote-address-by-cji-n-v-ramana-at-isms2021/ last visited 6th March 2025

[7] High-Level Committee on Deepening of Digital Payments, Reserve Bank of India (May 17, 2019), available at https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=47068 last visited 6th March 2025

[8].IN Domain Name Dispute Resolution Policy, National Internet Exchange of India, available at https://www.registry.in/domaindisputeresolution  last visited 6th March 2025

[9] Delayed Payment Monitoring System, Ministry of Micro, Small & Medium Enterprises, available at https://samadhaan.msme.gov.in/  last visited 6th March 2025

[10] The Rise of Online Dispute Resolution (ODR) in India, Juris Centre (Feb. 14, 2024), https://juriscentre.com/2024/02/14/the-rise-of-online-dispute-resolution-odr-in-india/ last visited 6th March 2025

[11] Dispute Resolution and Claims Management for Buyers, PayPal India, available at, https://www.paypal.com/in/webapps/mpp/buyer-dispute-resolution last visited 6th March 2025

[12] Indulekha Arvind, ‘Online dispute resolution is beginning to find takers in India’ (The Economic Times, 12 January 2020) https://economictimes.indiatimes.com/small-biz/startups/features/online-dispute-resolution-isbeginning-to-find-takers-in-india/articleshow/73206371.cms last visited 6th March 2025

[13] India’s Top Online Dispute Resolution (ODR) Startups, ICMCR Mediation, available at https://icmcrmediation.org/indias-top-online-dispute-resolution-odr-startups. last visited 6th March 2025

[14] NITI Aayog, Designing the Future of Dispute Resolution: The ODR Policy Plan for India (2021), available at https://www.niti.gov.in/sites/default/files/2023-03/Designing-The-Future-of-Dispute-Resolution-The-ODR-Policy-Plan-for-India.pdf last visited 6th March 2025

[15] Id. at 12-15

[16] Vidhi Centre for Legal Policy, ODR: The Future of Dispute Resolution in India (2021), available at https://vidhilegalpolicy.in/research/the-future-of-dispute-resolution-in-india/ last visited 6th March 2025

[17] Id. at 22-25

[18] Id. at 30-33.

[19] National Broadband Mission, available at https://dot.gov.in/innerpagewithinlinepdfdispl/national-broadband-mission-booklet last visited 6th March 2025

This article was originally published in Lexology on 11 December 2026 Co-written by: Shruti Sabharwal, Partner; Shalin Jani, Principal Associate and Swati Vyas, Senior Associate. Click here for original article

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