Global e-Business Association

The e-Business Studies - Vol. 17 , No. 5

[ Article ]
The e-Business Studies - Vol. 17, No. 5, pp.167-181
Abbreviation: The e-Business Studies
ISSN: 1229-9936 (Print) 2466-1716 (Online)
Print publication date Oct 2016
Final publication date 30 Oct 2016
Received 08 Oct 2016 Revised 24 Oct 2016 Accepted 27 Oct 2016
DOI: https://doi.org/10.20462/tebs.2016.10.17.5.167

A Study on ODR Enforcement for Disputes Arising from Cross-border E-Commerce: Focusing on the UNCITRAL and EU
Sungho Bae*
*Assistant Professor, Department of Global Commerce, Hoseo University, South Korea (baekorea@gmail.com)

국경 간의 전자상거래에서 발생하는 분쟁해결을 위한 ODR 집행에 관한 연구: UNCITRAL과 EU를 중심으로
배성호*
*호서대학교 글로벌통상학과 교수 (baekorea@gmail.com)

Abstract

Unprecedented growth of cross-border e-commerce has triggered increasing number of disputes arising between parties located in different jurisdictions. There have been efforts to enact well-established ODR laws and create well-functioning ODR platform in both state and international levels. Such ODR laws and systems are essential to provide confidence for the parties involved in cross-border e-commerce. The UNCITRAL Working Group III has held numerous sessions for active discussions to establish an ODR system applicable to multiple jurisdictions. In the meantime, the EU set an example by enacting ODR Regulation applicable for e-commerce consumers and traders. This paper will analyze the UNCITRAL Working Group III’s progress on making the ODR system, review the EU’s laws on ADR and ODR, and examine ODR in South Korea.

초록

국경 간의 전자상거래가 전례 없는 증가를 보임에 따라 각각 다른 관할권에 위치한 당사자들 간의 분쟁 수가 증가하는 추세다. 이러한 분쟁의 원활한 해결을 위한 ODR(온라인 분쟁해결)에 관한 법제도와 이를 실질적으로 수행할 수 있는 ODR 플랫폼을 마련하기 위한 국가 및 국제차원의 지속적인 노력이 있어왔다. 그러한 법과 플랫폼은 국경 간 전자상거래에 관여된 거래 주체들에게 해당 상거래에 대한 신뢰감과 안정감을 형성하는데 필수적인 요소가 된다. 이에 UN 산하 국제상거래법위원회(UNCITRAL)의 제3위원회(Working Group III)는 수차례의 세션을 통해 대다수의 국가에 적용 가능한 ODR 시스템을 개발 중에 있다. 유럽연합(EU)은 ADR과 ODR에 관한 법안을 시행함으로써 ODR 시스템의 본보기를 제시했다. 본 논문은 UNCITRAL의 ODR제도 형성 과정 및 EU의 ODR법안을 분석하고 한국의 ODR 현황을 진단하는데 그 목적을 둔다.


Keywords: ODR, UNCITRAL Working Group III, EU ADR Directive, EU ODR Regulation, E-commerce Dispute, ADR
키워드: 온라인 분쟁해결, e비즈니스 분쟁, 대체적 분쟁해결


Contents
ABSTRACT
Ⅰ. Introduction
Ⅱ. ADR and ODR
Ⅲ. International Efforts to Proliferate ODR
Ⅳ. Conclusion
References
국문초록


I. Introduction

E-commerce shows unprecedented growth in cross-border business transaction. It is true that the Internet turned substantial portion of the conventional offline B2B and B2C transactions into e-commerce. As a result of e-commerce, business entities and consumers no longer have to carry out business transactions through numerous office meetings to shake hands and sign the contract paper.1) In fact, the consumers do not even make efforts to personally see the products or try them on when they make decisions to purchase the goods because they can easily avoid such hassles by a few clicks on seller’s websites. The unprecedented convenience of the e-commerce has spurred the increase of sales tremendously via the Internet in major economies. The “eMarketer”, one of the leading market research firms, released statistics showing that e-commerce accounted for 7.3% of global retail sales in 2015 and projected to represent 12.4% of overall global retail sales by 2019. <Table 1> presents the Top 10 e-commerce countries and their volumes of sales.

<Table 1> 
Web Sales of the Top 10 E-commerce Countries1)
2014 2015
Rank Country Sales
(Billion in USD)
Increase
from 2013
Rank Country Sales
(Billion in USD)
Increase
from 2014
1 China 426.26 35.0% 1 China 672.01 42.1%
2 U.S. 305.65 15.7% 2 U.S. 349.06 14.2%
3 U.K. 82.00 16.5% 3 U.K. 99.39 14.5%
4 Japan 70.83 14.0% 4 Japan 89.55 14.0%
5 Germany 63.38 22.1% 5 Germany 61.84 12.0%
6 France 38.36 12.1% 6 France 42.60 11.1%
7 South Korea 33.11 13.0% 7 South Korea 38.86 11.0%
8 Canada 24.63 17.4% 8 Canada 26.83 16.8%
9 Russia 17.47 16.0% 9 Brazil 19.79 17.3%
10 Brazil 16.28 22.0% 10 Australia 19.02 9.3%
Source: eMarketer's research posted on the internetRETAILER (The table was edited by the author)

E-commerce has constantly expanding its participants. Online business platforms, including eBay and Amazon, played crucial roles in early e-commerce era by providing e-commerce marketplace where sellers and buyers may directly conduct business transactions. Making cross-border transactions much more accessible to ordinary consumers, similar types of leading online marketplace have been established in major economies: Alibaba and Taobao in China, Rakuten in Japan, and Auction and Gmarket in South Korea. Multinational corporations and major retail shopping malls launched their own consumer-friendly web-sales portals.2) The websites are updated very quickly as new products come out to the market. “eMarketer” research showed that the global retail e-commerce sales in 2015 was 1,592 trillion USD and the projection for 2019 is 2,489 trillion USD. In other words, e-commerce is not a mere business tool, but rather a necessary business model for anybody who wish to conduct cross-border business.3)

The fast and consistent growth of e-commerce transactions calls for a stable online dispute resolution (ODR) system as well as strong legal basis for enforcement of ODR outcome transcending jurisdiction. Consequently, there have been endeavors to make ODR more effective and enforceable in global level, especially in the United Nations Commission on International Trade Law (UNCITRAL) and EU. In state level, many jurisdictions have put considerable efforts to establish ODR law or system for consumers and sellers engaging in cross-border business transactions. In private level, law firms and ICT-based consulting firms express high level of interest through providing competent ODR services. ODR brought a significant paradigm shift in ADR because it takes place on the Internet. ODR made it possible for ADR to transcends time and physical distance between the participants. Dispute resolution can now occur whenever and wherever in the participants’ convenience due to ODR. ODR shares much of its frameworks with ADR because ODR is ADR using ICT, namely the Internet. In other words, understanding ADR is essential for further discussions on ODR.

Thus, this paper will present explanations on principles of ADR and ODR with a list of global leading ODR providers. Then, detailed analysis on global efforts to establish ODR laws by two international organizations (the UNCITRAL and the EU) will be examined. Discussions will be focused on review of UNCITRAL Working Group III’s effort to create international law governing ODR and examination of the EU laws governing ADR and ODR. The conclusion will examine South Korea’s ODR.


Ⅱ. ADR and ODR
1. ADR

It is a clear expectation for parties involved in any commerce that their business transactions would not be interrupted by disputes. The hope for avoiding disputes becomes even stronger in cross-border business transactions because the physical distance and different legal system between the participants would probably make dispute resolution more complex. Where complete avoidance of dispute is not a realistic option, as in most cases, the parties need to make sure that the most efficient possible dispute resolution method is available for them. To reduce lengthy process and endless cost for legal advice, substantial number of business entities and business people choose to resolve their disputes through out-of-court system, which is also known as ADR. The word “A” in ADR stands for “alternative” suggesting that ADR is intended for those who seek to resolve conflicts through some methods alternative to conventional court proceedings.4) In addition to an advantage of time and cost efficiency, a more fundamental strength of ADR over conventional court system lies in its nature of spontaneity. Due to its “voluntary” nature, ADR helps the participants engage in the dispute resolution process in more proactive and amicable manner. Consequently, the settlement becomes more satisfying for the parties rather than being zero-sum, which usually happens in a courtroom. In addition, ADR offers much greater procedural flexibility for the parties because the participants may agree to apply governing rules for dispute settlement process instead of existing procedural or evidence law in certain jurisdiction.5) Such a flexibility is a greasing factor for more efficient dispute resolution.

There are various ways to categorize the types of ADR, but it is the most common to divide ADR into three categories: negotiation, mediation, and arbitration. In negotiation, parties voluntarily communicate their different positions and interests to reach mutually acceptable resolution.6) Negotiation is commonly done through direct communications between the participants without a third party’s involvement as a middle person. Due to the nature of direct communication, negotiation brings out more speed and transparency in the exchange of information between the participants. In addition, negotiation allows the highest level of flexibility in terms of the formality, especially regarding procedure.

Mediation is dispute settlement process which a mediator, an impartial and neutral third person, facilitates communications and assists the parties to settle. The efficiency of mediation is as high as that of negotiation because mediation is shares majority of characteristics similar to negotiation. However, the process could take more time than negotiation because communication is conveyed through a mediator, and the mediator may hold caucuses with each party. Such a caucus is confidential and, as a result, promotes more honesty to the parties and better control of emotions in difficult issues to settle. For a successful mediation, the role of a mediator is critical. Since there is no official qualification or license requirement for a mediator. an incompetent mediator can make the process more abrasive. Parties may choose to stop the mediation any time during the process if settlement through the mediation seems impractical. In such a case, parties would probably have to look for other options to settle, or take the dispute to litigation.7) One of the crucial weakness of the mediation is that the settlement may not be enforcealbe in which case the parties have to go though a litigation in court.

Arbitration is an adversarial process through which a winning party receives an enforceable award from an arbitrator. Even though arbitration appears to have some similarities to mediation because there is a third person between the parties and the process begins based on contractual agreement between the parties, the difference in the authority of the third person substantially distinguishes arbitration from mediation. An arbitrators have legal authority to render a final decision on the dispute like judges do in court whereas a mediator cannot deliver a decision to the parties. The decision by the arbitrator is legally binding to the parties. On the other way, a mediator’s job is to facilitate the parties to reach a settlement as smoothly as possible. As discussed above, the settlement is not binding and could become unenforceable. In addition, arbitration is different from the court proceeding because arbitrators are not obligated to carry out arbitration process based on the law. In other words, unlike a judge who renders decision completely based on laws, arbitrators may use his or her own understandings of common practice in the relevant fields or interpretations on the parties’ intentions.8)

2. ODR

A simple definition of ODR is ADR performed on the Internet.9) In other words, the formalities of ODR is closely related to ADR, and the two show similarities in many aspects. Although there are various ways to categorize ODR types, ODR is generally divided into three categories: online negotiation, online mediation, and online arbitration.

The advantage of ODR over litigation or ADR is in substantial reduction of time and costs. In any dispute resolution, parties become concerned with the time they have to spend for the procedure. Such a concern becomes even more evident when parties are located cross-border. Travel and lodging expenses are unavoidable for at least a party who has to move to another party’s location to participate in ADR. Other cost might be added including renting fee for a place where ADR would be held. A greater, or probably the biggest, advantage of ODR over ADR is the transcendence of limitation caused by time and space. Even if they are located cross-border, there is no need for one party to travel to another party’s location since ADR sessions can be held online. They do not need to find a physical place to meet. Parties can freely choose when to meet online to conduct dispute resolution. Even if the parties are living in different time zone, ADR session can occur anytime at the parties’ convenience.10) For the parties, ODR offers incentives to attract participation in the process and faster means of settlements.11)

To ensure quality in ODR, Ebner and Zeleznikow argued that three core elements must be met: fairness, trust, and security.12) First, fairness requires transparency throughout the process, clarification of legal principles and delivery of advice to parties about likely court outcomes, and honest disclosure of discovery from both parties.13) Second, trust needs to be established in aspects, including user’s trust in ODR system in general, interpersonal trust between parties, and user’s trust in the contents provided by ODR system.14) Third, the parties, as well as a mediator or arbitrator seek to have the highest level of security within the meanings of information security regarding the Internet and ICT during the operation of ODR, data security related to confidentiality, personal security including emotional stability, and system security particularly on technological platform and human factors.15)

Despite the unprecedented advantages, ODR addresses following crucial issues.16) First, ODR significantly lacks human factor than ADR. Between disputed parties, “how you say it” matters much more than “what you say”, especially as the dispute becomes tougher to settle. In ODR, however, reading behind non-verbal messages from texts in screen becomes a challenge for parties. In fact, eye contact, tones, and gestures in face-to-face ADR makes it easier for the parties to clarify arguments, build trust, and control emotions. Exchange of such human interaction can many times play a decisive role for faster and more satisfied settlement. Second, majority of ODR system have not solved the language barrier issue. Significant percentage of ODR services are provided in English. Language barrier becomes a critical factor for parties in cross-border e-commerce because consumers and traders would probably choose not to even begin ODR unless they are offered the language comfortable enough to proceed dispute resolution. Recently, it is encouraging to witness a compelling effort in the EU’s ODR platform to provide ODR service in all languages spoken in Member States and its willingness to offer translation service for parties outside EU. Third, security becomes more sensitive in ODR. Unless parties use a real-time using webcam, confirmation of identity of the opposing party becomes difficult. In addition, communication record and evidence exchanged via email, online message board, or instant message software are exposed to possible leakage. Concerns for such a problem creates hesitance for the parties to engage in ODR. Lastly, legal enforcement mechanism should be clarified in international level. Settlement from negotiation or mediation and Arbitral award would be meaningless to winning parties unless they have confidence in enforcement. More detailed discussions will be done below, but the UNCITRAL and EU have set examples of legal tools to make ODR enforceable. Strong legal bases are essential for increase in number of competent global ODR providers.

In accordance with constant demand for ODR, the number of competent ODR service providers is increasing. In fact, ODR providers are expanding their services beyond law firms, consulting firms, or government-sponsored public arbitration institutions. As more states are expected to enact laws governing ODR, ODR providers will expand in numbers and types of services they offer. Table 2 shows leading ODR providers.

<Table 2> 
Leading ODR Service Providers (listed in alphabetical order)
Names Listed in Alphabetical Order
American Arbitration Association Cyberlaws.Net Iudica
ADNDRC Cybersettle The Internet Ombudsman
ADRoit3 Dispute Manager Legal Face-Off
Appellex Bargaining Solutions eadronline Mediation in the Clouds
Arbitranet www.econfianza.org Modria.com
ARyME Electronic Consumer Dispute Resolution ODRWorld
Better Business Bureau Online ElectronicCourthouse.com Private Judge
Camera Arbitrale di Milano EmissaryMediation.com Resolution Forum Inc.
CaseloadManager.com eQuibbly.com Smartsettle Family Resolutions
Chartered Institute of Arbitrators Eurochambres SquareTrade
Cibertribunal peruano FSM The Claim Room
Conflict Resolution Software GWMK TRUSTe
Consensus Mediation Hong Kong International Arbitration Centre VirtualCourthouse
Consumers association of Iceland iCan Systems Inc. (Smartsettle) The Virtual Magistrate
Conflict Resolution.com ICANN Ombudsman Office Youstice
Convirgente.com iCourthouse Webmediate.com
CPR Institute for Dispute Resolution International Chamber of Commerce WIPO
Source: ODR.INFO17)


Ⅲ. International Efforts to Proliferate ODR
1. UNCITRAL
1) Phase I – A Single Package Model

Since its establishment by the United Nations in 1966, the UNCITRAL has played a central role to implement international trade law aiming for modernization and harmonization among the members.18) There are six Working Groups focusing on important legal issues in fast changing international trade environment.19) In the 43rd Commission Session in July 2010, the UNCITRAL noted a necessity for ODR in cross-border e-commerce transaction. The UNCITRAL officially announced that collaborative effort to implement rules for an integrated ODR system is imperative for B2B, B2C, and C2C cross-border e-commerce transaction.20) As a result, Working Group III initiated indepth discussions on ODR in the 22nd session held in December 2010. The official sessions have been taking place twice every year in Vienna and New York since the first one being the 22nd session.

The sessions of Working Group III21) can be divided into three phases.22) The first phase was from the 22nd to 25th sessions. In this phase, Working Group III’s discussion on ODR procedure revolved around a three-step approach: negotiation, facilitated settlement, and arbitration. The three-step procedure was to be offered as a single package by ODR provider. In a negotiation stage, the parties agree to resolve dispute on a platform operated by ODR provider using electronic communications without a third party’s intervention as a middle person. If the dispute remains unresolved, the parties automatically enter the facilitated settlement stage. In this stage, a neutral third party intervenes to help the parties reach mutually acceptable terms of settlement. If the dispute still left unsettled, then arbitration, the final stage, begins automatically with an intervention impartial neutral person. At this stage, the neutral’s decision of award gets enforceable. In the suggested single package model, parties are not entitled to choose to opt out during the three-stage process. In other words, once the parties agreed to use the ODR during their transaction, dispute between the parties shall not be resolved through litigation but through ODR.23) The single package model, however, faced challenges because each legal system takes different approaches as to whether the jurisdiction legally acknowledges disputed parties’s agreement on the “automatic” arbitration formed during the transaction stage. Such a difference appeared more evidently in B2C cases. As explained by the Supreme Court in AT&T Mobility LLC v. Concepcion24), the United States tended to recognize the effectiveness pre-agreed arbitration between a business entity and an individual. In other words, the United States was supportive with the single package model. The EU, on the other hand, expressed reservations on the single package model by arguing that legal acknowledgement of the pre-agreed arbitration could raise issues in consumer protection.25)

2) Phase II – A Two-Track System

To narrow the gaps between “for” and “against” the pre-agreed binding arbitration, Working Group III introduced a two-track system at the 26th session held in November 2012.26) With presentation of more detailed and practical discussions for the two-track system in the 27th session, Working Group III proposed the B2B disputes and the jurisdictions where pre-dispute arbitration is enforceable to be governed by the binding arbitration track, or track I. The decision to select track I would be made at the same time when a buyer clicks the mouse button to purchase online. In other words, a single click to purchase automatically means the buyer agrees to the binding arbitration later when dispute occurs. The session did not provide clarity as to the enforcement mechanism, but the arbitration award might be enforceable based on the New York Convention.27) B2C disputes and jurisdictions where pre-dispute arbitration is not accepted would take track II. In track II, a binding arbitration would be available when a buyer agrees to begin arbitration after failure of amicable settlement in earlier stages, including negotiation and facilitated settlement in ODR.28)

3) Phase III – Integration of Track I & Track II

In the 30th session in 2014, there were continuous support for track I by the United States and track II by the EU joined by South Korea and Japan. Although the United States and the EU offered revision to their proposed ODR models to reconcile discrepancies, filling gaps between the two tracks were found to be difficult if not impractical. China then proposed an alternative to the two track model. According to China’s proposed procedure, ODR Administrator will provide explanations on arbitration options for the disputed parties which were unable to settle at the facilitated settlement stage. Based on the explanations, parties are given the opportunities to make a choice whether to commence ODR arbitratio n.29) China’s proposal shows much similarities in its frame with a single package model discussed in Phase I. However, China’s proposal is distinguished from the single package model in a manner that agreement to arbitrate is required by the disputants rather than pushing the disputants automatically to arbitration.30)Figure 1 presents ODR platform proposed by China.

In the 31st session, based on the proposals made by the United States, China, and the EU in the previous session, discussions were focused on the Chinese model rather than those of the United States and the EU in the 31st session. In fact, the EU modified its previous proposal into the “second click” platform as shown in Figure 2.


[Figure 1] 
China’s Proposal – Integrated ODR Platform

Source: A/CN.9/827 at p.14.




[Figure 2] 
EU’s Proposal – A “Second Click” Platform

Source: A/CN.9/833 at p.26.



The EU’s second click model is practically almost identical to the China’s proposal as shown in Figure I for two reasons. First, buyer and seller voluntarily agrees to use ODR during transaction. Later, the agreement will automatically lead the parties through two stages of ODR, negotiation and facilitated settlement, in case disputes arises between them. Second, arbitration upon the failure of settlement in the previous stages is up to the disputants’ agreement based on ODR Administrator’s guidance. The parties may choose not to arbitrate the dispute. In such a case, a neutral’s recommendation becomes a final decision for the dispute. The parties, however, may refuse to accept the recommendation by neutral. The refusal would leave the dispute unresolved which is a crucial weakness of the platform.31)

2. EU

The European Union has been proactive in promoting an out-of-court dispute resolution system not only among the Member States, but also between countries outside the EU which conduct cross-border business transactions with the EU Member States. The EU published detailed rules for both ADR and ODR. Regulations on the EU’s ODR scheme is based on its rules on ADR. Thus, it is important to comprehend the purposes and principles of EU’s ADR before applying it to EU’s ODR. Since the EU’s framework of ODR is very closely related to that of ADR, equal level of emphasis for discussions in this chapter will be put on both ADR and ODR.

1) ADR Directives

The EU implemented an enforceable ADR through ADR Directive.32) Various names, such as mediation, conciliation, ombudsmen, arbitration, and complaints boards, mean ADR procedure in the EU.33) The scope of the ADR applies to disputes arising from cross-border consumer transactions involving sale of both goods and services whether done online or offline.34) ADR Directive, however, excludes disputes between traders, services related to health and medicine, pubic higher education services, direct negotiation or procedures initiated by trader against consumer.35) The EU expressed the importance and its strong interest in availability of effective and easily accessible ADR scheme to ensure consumer confidence, raise trader’s standards, and enhance flow in information and secure quality practices.36)

Cortés explained that ADR Directive basis its frame on six principles37) for quality assurance of the syste m.38) First, a third party must be a neutral expert through maintaining impartiality as a completely disinterested person to the outcome of the dispute.39) Second, ADR entities are required to stay transparent by making their information available to general public on their websites and on hard medium. The information must include the entities’ contact details, identification as to official affiliation with networks of ADR entities, types of disputes the entity is capable of dealing with, and continuous publication of annual reports, including information on the number of cases received and settle d.40) Third, ADR procedure must be effective in four ways. The accessibility must be without any difficulties for disputants. The parties must be free from any obligation to retain legal representation. ADR must be available at either free of charge or reasonable cost to consumers. The result of ADR should be available within 90 days upon reception of the complete complaint files.41) Fourth, Member States should assure fairness in ADR procedures by providing a written notification of the outcome containing information that the parties have opportunities to use reasonable time to reflect upon the outcome, that the parties may choose to either agree or not to agree with the outcome, and that the parties may seek redress in court.42) Fifth, Member States must ensure liberty to consumers through providing them with information on the binding nature of ADR procedure before the dispute has materialized.43) Sixth, Member States should ensure legality that consumers do not receive less protection from the solution than the law of the Member State where the consumer and the trader reside.44)

2) ODR Regulations

As the EU recognized the efficiency and necessity of the ADR through ADR Directives, it also officially enacted legal grounds for ODR through ODR Regulation45). The purpose of ODR Regulation is to establish an ODR platform operated by a single point of entry for those who conduct business transactions online.46) Such an ODR platform is critical to enhance confidence in online transactions for both consumers and traders. ODR Regulation entered into force on 9 January, 2016.47) The legal basis for ODR Regulation is on ADR Directive.48)

The applicable scope of ODR Regulation is for cross-border and domestic online transactions through online sales and service contract between consumers and traders.49) Offline transactions are expressly excluded from the scope of ODR Regulation.50) In addition, ODR Regulation is relevant to online transactions concluded not only on websites, but also through “other electronic means.”51) In other words, purchasing goods or services using a smartphone or other equivalent electronic device with the Internet capability will be covered by ODR Regulation.

Based on Article 13 of ADR Directive52), notification of availability of ODR platform to consumers is required for all traders who sells goods and provide services online. The same announcement obligation applies for online marketplace which is the online platform where traders upload and display their products for consumers with intent to sell. The mandatory notification should be contain at least three information on the trader’s websites: First, hyperlink to ODR platform. Second, email address of a trader as a direct contact point.53) All traders involved in electronic commerce are required to abide by the notification obligation whether the traders commit to use ODR platform to resolve disputes with consumers or not. List of ADR entities which may provide ODR service should be provided in the ODR platform with regulalr updates. In addition, Member States must spur consumer associations and business associations to make hyperlink to ODR platform available to consumers.

For maximization of efficiency, EU made the procedure of ODR platform simple and easy-to-follow for both parties in dispute. First, complainant party fills in every necessary section of an electronic complaint form which can be found on the ODR platform any time in the complainant party’s convenience. Once the completed complaint form is submitted by the complainant party, the ODR platform will electronically and instantly send the form to the respondent party in a language chosen by the party. The complaint form includes attachments showing a list of the ADR entities which are capable of resolving the dispute. The respondent party has 10 calendar days to decide and express an agreement as to whether the party commits to use the ADR entity for the ODR platform. Once the respondent’s response is received, the ODR platform immediately and electronically sends it to the complainant party giving the same 10 calendar day deadline to decide and notify an agreement for the usage of the ADR entity. If the complainant party agrees, the ODR platform automatically sends the agreements acquired by both parties to the ADR entity. If the parties fail to agree on the ADR entity or the ADR entity refuses to assume the ODR process for the dispute within 30 calendar days, the process stops at that point and no longer progress. In such a case, the complainant party would receive information on contacting an ODR advisor for other options to redress.54) The submission of complaint form does not cost any charge for the complainant party. However, the ADR entity may demand a reasonable fee in further procedure of the dispute resolution.55) In addition, an electronic translation would be offered in general, but there could be human intervention for translation where electronic translation is not enough for the ODR procedure.56)


Ⅳ. Conclusion

Sessions held by the UNCITRAL Working Group III revealed interests of major markets of global e-commerce, including the United States, EU, and China. Discussions to establish an effective and enforceable international ODR law and system has evolved through three phases. The EU also took the initiative to enact ODR Regulation applicable to disputes arise from e-commerce inside and outside the Member States. The ODR platform explained in EU’s ODR Regulation is practical, simple, and enforceable. It is not an overstatement that the EU’s ODR platform is a landmark in cross-border e-commerce dispute. Based on the ODR Regulation, continuous efforts to revise existing laws regarding ODR is being carried out throughout European countries.

Compared to such progressive changes in global environment in ODR laws, policies, and platform, it is unfortunate that South Korea shows very slow improvement in ODR over the past decade despite its international reputation as a “leading ICT country.” There are three representing ADR providers in Korea: E-Commerce Mediation Committee (ECMC)57), Korea Consumer Agency (KCA)58), and the Korean Commercial Arbitration Board (KCAB)59).

Although the institutions provide ODR service, the ODR platform is with much limitation and not as diverse compared to those of the UNCITRAL and EU. First, The ECMC accepts request for mediation online through the website.60) The mediation services are offered in four types: face-to-face, in writing, cyber, and telephone.61) Regardless of the types, the mediation period lasts for 25 calendar days, and 7 calendar days are given to the parties to decide whether to settle or not.62) It is difficult to say that mere acceptance of mediation request or phone mediation offerred by the ECMC falls under the meaning of ODR. Second, KCA also accepts request for mediation, but it does not provide ODR services. Lastly, KCAB offers online registration for facilitated negotiation and mediation, but not for arbitration. Although KCAB does not provide ODR service, it administers email counseling service to help parties decide which type of ADR they should choose. Strictly speaking, therefore, South Korea’s ODR platform is in a very narrow and primitive level. In fact, a true ODR beyond online mediation request service or online counseling is not occurring in South Korea.

In order to strengthen the current ODR system in Korea, there are two fundamental elements Korean government should consider. First, a well-functioning and reliable ODR platform should be developed using Korea’s advanced ICT technology. Due to the absence of an integrated and easily accessible ODR platform, the institutions and potential Korean ODR service providers do not have a cyber space where they can conduct ODR. If developing a nation-wide and unified ODR platform faces heavy challenges, then at least a user-friendly ODR software needs to be designed as a temporary alternative. Like EU, the platform or software should be provided in multiple languages for foreigners to deal with cross-border e-commerce disputes. Second, Korea needs a legal framework which would support enforcement of settlement or decision by ODR. Even though Korea has its legal basis for ADR, clear and detailed laws on ODR is absent. Korean legislative branch must form a committee modeling after the UNCITRAL Working Group III and take the initiative to conduct extensive research on various foreign ODR laws and policies. Lastly, Korean government should advertise the availability of the existing ODR system.


각주
1) Schmitz, Amy, Building Trust in E-commerce Through Online Dispute Resolution (2015). John A. Rothchild (ed.), Research Handbook on Electronic Commerce Law, Edward Elgar, 2016, Forthcoming; U of Colorado Law Legal Studies Research Paper No. 15-15, at 1.
2) Ha-Sung Chung, Online ADR for the E-Commerce? European Union's ADR Legislation for Cross-Border Online Trade, Journal of Arbitration Studies, Vol. 25 No. 3, 2015, at 136.
4) “A” in ADR stands for “alternative” in most cases. However, there are some articles and institutions that use the word “appropriate” instead of “alternative.”
5) Sungho Bae, A Study on Online Dispute Settlement in the Era of FTA, The e-Business Studies, Vol. 13 No. 4, 2012, at 98.
6) Exon S. N., The Next Generation of Online Dispute Resolution: The Significance of Holography to Enhance and Transform Dispute Resolution, 12.1 Cardozo Journal of Conflict Resolution, 2011.
7) See Bae, supra note 6, at 101.
8) M. Moffitt and A.K. Schneider, Dispute Resolution: Examples & Explanations (Wolters Kluwer 3rd Ed. 2014) at 166.
9) Ebner, Noam and Zeleznikow, John, Fairness, Trust, and Security in Online Dispute Resolution, Hamline Journal of Public Law and Policy, Vol. 36, No. 2, 2015 at 144.
10) See Bae, supra note 6, at 106.
11) Cortes, Pablo and Esteban de la Rosa, Fernando, Building a Global Redress System for Low-Value Cross-Border Disputes, International and Comparative Law Quarterly, 62(2) at 421.
12) See Ebner and Zeleznikow, supra note 10, at 148.
13) Id.. at 154.
14) Id.. at 156.
15) Id.. at 159.
16) Koon-Jae Shin, A Study on Resolution Methods of Overseas Direct Purchase Dispute by ODR, Journal of Arbitration Studies, The Korean Association of Arbitration Studies, Vol. 25 No. 1, 2015, at 12.
17) A complete and updated list can be found at http://odr.info/provider-list/, last visited on October 7, 2016.
19) Working Group I – Micro, Small and Medium-sized Enterprises; Working Group II – Dispute Settlement; Working Group III – Online Dispute Resolution; Working Group IV – Electronic Commerce; Working Group V – Insolvency Law; Working Group VI – Security Interests (More detailed substantive information on each working group is available at www.uncitral.org).
20) A/CN.9/710 - Possible future work on online dispute resolution in cross-border electronic commerce transactions - Note supporting the possible future work on online dispute resolution by UNCITRAL, submitted by the Institute of International Commercial Law
21) There have been twelve Working Group III sessions (from 22nd to 33rd) as of October 2016.
22) Min-Seop Yun, Trends in the Discussions about the ODR Procedure Rules of UNCITRA – Focused on the Discussion in the 30th & 31st Session of Working Group III, Chung-Ang Journal of Legal Studies, Vol. 39, No. 2, 2015, at 45.
23) Id. at 47.
24) AT&T Mobility v. Concepcion, 563 U.S. 333 (2011).
25) See Yun, supra note 23, at 47.
26) A/CN.9/762, §15&16
27) Riikka Koulu, One Click Too Much? – Thoughts on UNCITRAL’s work on ODR draft rules, PART I (2015). The article is available at http://www.cyberjustice.ca/en/actualites/2015/03/03/one-click-too-much-thoughts-on-uncitrals-work-on-odr-draft-rules-part-i/
28) Id.
29) See Yun, supra note 23, at 51.
30) Id.
31) Id. at 58
32) Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Directive on consumer ADR) [hereinafter ADR Directive].
34) Pablo Cortés, “A New Regulatory Framework For Extra-Judicial Consumer Redress: Where We Are And How To Move Forward” (2015) 35(1) Legal Studies, 114-141.
35) Article 2 of the ADR Directive.
36) Paragraph (30) of the ADR Directive.
37) The six principles appears in Chapter II of ADR Directive which stems from standards explained in the Recommendations 98/257/EC and 2001/310/EC.
38) See Cortés, supra note 35, at 118.
39) Article 6 of the ADR Directive.
40) Article 7 of the ADR Directive.
41) Article 8 of the ADR Directive.
42) Article 9 of the ADR Directive.
43) Article 10 of the ADR Directive.
44) Article 11 of the ADR Directive.
45) REGULATION (EU) No 524/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 21 May 2013 on online dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Regulation on consumer ODR) [hereinafter ODR Regulation].
46) Paragraph 18 of the ODR Regulation.
47) Article 22 of the ODR Regulation.
48) Paragraph 9 of the ODR Regulation.
49) Paragraph 10 and 11 and Article 2 of the ODR Regulation.
50) Paragraph 15 of the ODR Regulation.
51) Paragraph 14 of the ODR Regulation.
52) ADR Directive requires traders in Member States to notify consumers about the availability of ADR entities on websites and durable medium. The notification obligation applies to all traders whether or not they choose to resolve disputes with consumers via ADR procedures.
53) Article 14 of the ODR Regulation.
54) Article 9 of the ODR Regulation.
55) See Cortés, supra note 35, at 121.
56) Paragraph 19 of the ODR Regulation.
60) Yun-Jeong Kim, A Study on the Online Dispute Resolution (ODR) System for Electronic Commerce Dispute Settlement, Journal of Science, Technology, and Law, Law Research Institute, Chungbuk National University Vol. 2, 2011, at 62.
61) See Shin, supra note 17, at 15.
62) See Kim, supra note 61, at 65.

References
1. Bae, Sungho, (2012), “A Study on Online Dispute Settlement in the Era of FTA”, The e-Business Studies, 13(4), p97-120.
2. Chung, Ha-Sung, (2015), “Online ADR for the E-Commerce? European Union's ADR Legislation for Cross-Border Online Trade”, Journal of Arbitration Studies, 25(3).
3. Cortés, Pablo, (2015), “A New Regulatory Framework For Extra-Judicial Consumer Redress: Where We Are And How To Move Forward”, 35(1), Legal Studies, p114-141.
4. Cortes, Pablo, and Esteban de la Rosa, Fernando, (2013), “Building a Global Redress System for Low-Value Cross-Border Disputes”, International and Comparative Law Quarterly, 62(2).
5. Ebner, Noam, and Zeleznikow, John, Fairness, (2015), “Trust, and Security in Online Dispute Resolution”, Hamline Journal of Public Law and Policy, 36(2).
6. Kim, Yun-Jeong, (2011), “A Study on the Online Dispute Resolution (ODR) System for Electronic Commerce Dispute Settlement”, Journal of Science, Technology, and Law, Law Research Institute, Chungbuk National University, 2.
7. Koulu, Riikka, (2015), One Click Too Much? – Thoughts on UNCITRAL’s work on ODR draft rules, PART I, Cyberjustice Laboratory.
8. Moffitt. Michae, L.l, and Schneider Andrea, Kupfer, (2014), Dispute Resolution: Examples & Explanations, (Wolters Kluwer 3rd Ed.).
9. Nauss Exon, Susan, (2011), “The Next Generation of Online Dispute Resolution: The Significance of Holography to Enhance and Transform Dispute Resolution”, 12.1 Cardozo Journal of Conflict Resolution.
10. Schmitz, Amy, (2015), “Building Trust in E-commerce Through Online Dispute Resolution, John, A. Rothchild (ed.), Research Handbook on Electronic Commerce Law, Edward Elgar, 2016, Forthcoming; U of Colorado Law Legal Studies Research Paper No, p15-15.
11. Shin, Koon-Jae, (2015), “A Study on Resolution Methods of Overseas Direct Purchase Dispute by ODR”, Journal of Arbitration Studies, The Korean Association of Arbitration Studies, 25(1).
12. Yun, Min-Seop, (2015), “Trends in the Discussions about the ODR Procedure Rules of UNCITRA – Focused on the Discussion in the 30th & 31st Session of Working Group III”, Chung-Ang Journal of Legal Studies, 39(2).

<Websites>
1. ec.europa.eu.
2. ODR.INFO.
3. www.cyberjustice.ca.
4. www.emarketer.com.
5. www.internetretailer.com.
6. www.uncitral.org.

<Legal Documents>
1. AT&T Mobility v. Concepcion, 563 U.S. 333 (2011).
2. A/CN.9/710.
3. A/CN.9/762.
4. A/CN.9/827.
5. A/CN.9/833.
6. Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Directive on consumer ADR).
7. REGULATION (EU) No 524/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 21 May 2013 on online dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Regulation on consumer ODR).