An empirical study of US and Chinese perspectives on barriers and possibilities for the expansion of online commercial arbitration

Abstract

Online arbitration is commonly identified by scholars as an effective and cutting-edge means to resolve disputes in general. In practice, however, online arbitration providers generally face difficulties in attracting users, especially those with international commercial disputes. To bridge this gap, researchers have speculated three main problems with current online arbitration mechanisms: enforceability; use of computer-mediated communication; and, confidentiality. Most researchers argue these problems can be solved, and should not hinder the development of online arbitration. This thesis aims to explain this gap from the users’ end, and proposes a hypothesis that users are under the misconception that the three problems of online arbitration are insurmountable. A survey of US and Chinese international arbitration users tested and partially confirmed this hypothesis. The survey found that unfamiliarity with the mechanism was an essential reason for the low attractiveness of online arbitration. Possibly due to unfamiliarity, some of users most significant concerns are based on misconceptions. Users may overestimate the uncertainty of the enforceability of online arbitration awards, due to insufficient comprehension of recent legal developments in favor of enforcement, under the New York Convention. The users probably also under the misconception erroneously that hearings conducted by videoconferencing have insurmountable problems related to out-of-camera communications and ineffective cross-examination. However, the survey also found that some concerns reflected problems in some providers’ practices. The outright prohibition of paper filings, for example, raises significant concerns about the authenticity of documentary evidence that is electronically submitted, while the heavy use of email to transmit confidential information and the lack of access tokens cause users to worry about confidentiality. Based on the survey findings, this thesis suggests that providers explicitly incorporate several opt-out rules in response to concerns users have about conducting hearings and submitting evidence online, such as allowing the use of notaries public during online hearings, requiring witnesses to testify at independent offices with video-conferencing facilities, and allowing the submission of evidence in hard copy when the authenticity of the evidence is in dispute. This way, users can be informed of the solutions to problems they wrongly see as insurmountable, and, when they prefer simpler procedures, can choose not to follow those solutions. Moreover, this thesis proposes providers to adopt an improved trustmark program as a supplemental enforcement mechanism in cross-border B2C cases.