jurisdiction. As is often the case in private international law, the question of
allocating jurisdiction has many solutions: jurisdiction can be determined based
on nationality, by place of residence, by place of purchase or by other criteria, all of
which options have further not-so-simple definitions. Determining jurisdiction
becomes even more difficult in relation to e-commerce, as foreign e-commerce
platforms are easily accessed from several countries, purchases can be done while
visiting a different country, and network traffic can be rerouted. Also, the basic
issue with holding on to the two-track system is ‘the annex question’: who would
create and maintain the list of countries by track so that ODR providers could
determine which set of rules would be applicable?
Owing to these inherent problems of maintaining a two-track system, the model
was set aside in October 2014. The decision was made after several delegations had
pointed out that arbitration would not provide sufficient consumer protection and
that simplified arbitration rules would undermine traditional arbitration procedure.
Several delegations stated that non-binding rules would be able to accommodate
all jurisdictions and the practical influence of ODR arbitration would be low, and
awards’ enforceability would remain without effect because enforcing arbitral
awards would be too expensive and time-consuming for low-value disputes.
60 It
follows from this that the work seemed to have come to a standstill. In February
2015, the discussion turned to the question whether the work should be discontinued due to the lack of progress. This discussion stems directly from the
problems of the basic model, i.e. whether pre-dispute arbitration clause is binding
on the consumer or whether arbitration is only allowed after the consumer gives her
consent during the dispute. On the one hand, there were many who considered the
fundamental chasm too wide to overcome, but on the other hand, others thought
the need for a compromise, even a weak one, more urgent than the alternative of
laissez-être. In July 2015, UNCITRAL’s Commission further specified the Working
Group’s mandate to focus on the ‘elements of an ODR process, on which elements
the Working Group had previously found consensus’. At the same time the commission decided that the working group will be continued for one year until summer
2016, after which it would be terminated regardless of the outcome.
61
In March 2016, the Working Group drafted the final document, which took the
form of non-binding technical notes on ODR. According to the final document,
the purpose of the descriptive Technical Notes ‘is to foster the development of
ODR and to assist ODR administrators, ODR platforms, neutrals, and the parties
to ODR proceedings’.
62 The notes reflect due process values such as impartiality,
fairness and transparency, but as a non-binding instrument the document’s impact
is somewhat unclear. Regardless of this lack of clarity, the document is bound to
reflect UNCITRAL’s encouragement for the increasing use of ODR.
As UNCITRAL’s work on ODR ended with the adoption of the technical
notes, UNCITRAL Member States were left to their own devices to address the
problematic procedural issues of cross-border e-commerce and regulation of
ODR. The lack of a more ambitious instrument was probably more difficult for
developing economies, while it will have less impact on the EU’s established
ODR regime and the US, where chargeback models are commonly used. The
Sovereignty and state agenda 127
allocating jurisdiction has many solutions: jurisdiction can be determined based
on nationality, by place of residence, by place of purchase or by other criteria, all of
which options have further not-so-simple definitions. Determining jurisdiction
becomes even more difficult in relation to e-commerce, as foreign e-commerce
platforms are easily accessed from several countries, purchases can be done while
visiting a different country, and network traffic can be rerouted. Also, the basic
issue with holding on to the two-track system is ‘the annex question’: who would
create and maintain the list of countries by track so that ODR providers could
determine which set of rules would be applicable?
Owing to these inherent problems of maintaining a two-track system, the model
was set aside in October 2014. The decision was made after several delegations had
pointed out that arbitration would not provide sufficient consumer protection and
that simplified arbitration rules would undermine traditional arbitration procedure.
Several delegations stated that non-binding rules would be able to accommodate
all jurisdictions and the practical influence of ODR arbitration would be low, and
awards’ enforceability would remain without effect because enforcing arbitral
awards would be too expensive and time-consuming for low-value disputes.
60 It
follows from this that the work seemed to have come to a standstill. In February
2015, the discussion turned to the question whether the work should be discontinued due to the lack of progress. This discussion stems directly from the
problems of the basic model, i.e. whether pre-dispute arbitration clause is binding
on the consumer or whether arbitration is only allowed after the consumer gives her
consent during the dispute. On the one hand, there were many who considered the
fundamental chasm too wide to overcome, but on the other hand, others thought
the need for a compromise, even a weak one, more urgent than the alternative of
laissez-être. In July 2015, UNCITRAL’s Commission further specified the Working
Group’s mandate to focus on the ‘elements of an ODR process, on which elements
the Working Group had previously found consensus’. At the same time the commission decided that the working group will be continued for one year until summer
2016, after which it would be terminated regardless of the outcome.
61
In March 2016, the Working Group drafted the final document, which took the
form of non-binding technical notes on ODR. According to the final document,
the purpose of the descriptive Technical Notes ‘is to foster the development of
ODR and to assist ODR administrators, ODR platforms, neutrals, and the parties
to ODR proceedings’.
62 The notes reflect due process values such as impartiality,
fairness and transparency, but as a non-binding instrument the document’s impact
is somewhat unclear. Regardless of this lack of clarity, the document is bound to
reflect UNCITRAL’s encouragement for the increasing use of ODR.
As UNCITRAL’s work on ODR ended with the adoption of the technical
notes, UNCITRAL Member States were left to their own devices to address the
problematic procedural issues of cross-border e-commerce and regulation of
ODR. The lack of a more ambitious instrument was probably more difficult for
developing economies, while it will have less impact on the EU’s established
ODR regime and the US, where chargeback models are commonly used. The
Sovereignty and state agenda 127