E-COMMERCE DISPUTE SETTLEMENT INNOVATIONS AND CHALLENGES IN CHINA
Xue Hong The outbreak of coronavirus disease (COVID-19) from January 2020 forced billions of Chinese to stay at home and completely rely on shopping online for foods and other necessities for at least two months. The ‘virus-stimulated’ e-commerce prosperity comes along with slow delivery, product defects, price fraud and many other disputes. When people cannot go to the physical courtrooms to file the complaints, the Internet Courts, online arbitration and other online dispute resolution (ODR) show their efficacy and resilience in the time of COVID-19. As instructed by the Supreme People’s Court, courts should cease trying all cases for quarantine purpose but ‘may conduct online trials if necessary’. Dispute resolution is one of the important components of the E-Commerce Law of China, which provides the important legal support for e-commerce operation. Under the E-Commerce Law of China, besides litigation, arbitration, mediation, reconciliation and other traditional dispute resolution, the innovative mechanisms like the Internet courts, online arbitration, online mediation and e-commerce sui generis dispute settlement are playing increasingly important roles and ensure a large part of e-commerce disputes are resolved on the Internet. Successful and sustainable e-commerce ODR depends on both the appropriate institutional design and the safeguard of due process. Chinese ODR mechanisms are under construction and face many legal or practical challenges. I. THE INTERNET COURTS Establishment of the Internet Courts is an important milestone of Chinese judicial reform. On August 18, 2017, Hangzhou Internet Court was formally established as the first Internet court in China. Since then, two more Internet Courts have been established in Beijing and Guangzhou respectively. The Internet Courts can conduct the whole trial process (i.e. acceptance of cases, service of documents, exchange and cross-examination of evidence, pre-trial meetings, hearings and decisions) on the Internet. Upon the requests of the parties or the need for the trial, the Internet Court may also make the proceedings (e.g. hearings) partially online and retain the other parts in traditional form. The Internet Courts have substantively enhanced the judicial transparency. A. The Jurisdiction of the Internet Courts Under the regulations of the Supreme People’s Court, the Internet Courts in Beijing, Guangzhou and Hangzhou have the jurisdiction over the following first-instance cases: (i) disputes arising from online shopping contracts signed or performed through e-commerce platforms; (ii) disputes of network service contract signed and performed on the Internet; (iii) disputes regarding defective products purchased through e-commerce platforms; (iv) disputes of financial loan contracts and small loan contracts signed and performed on the Internet; (v) disputes of copyright or neighboring rights of the works first published on the Internet; (vi) disputes of infringements of copyright or neighboring rights of the works published and communicated on the Internet; (vii) disputes regarding Internet domain name ownership, infringements and contracts; (viii) disputes arising from torts against personal rights or property rights on the Internet; and, other Internet-related civil, administrative and criminal cases designated by the High People’s Court. According to the foregoing stipulations, the Internet Courts primarily try two types of cases, i.e. e-commerce disputes (online shopping, Internet services, etc.) and online intellectual property disputes (copyright, neighboring right, trademarks and domain names, etc.). Since copyright, domain names or other intellectual property rights are the digital assets that may be transacted under the E-Commerce Law, almost all the cases handled by the Internet Courts involve e-commerce directly or indirectly. B. Online Litigation Platform Online litigation platform (OLP) is the critical infrastructure of the Internet courts. The Supreme People’s Court requires all Internet courts establish their own OLP, through which the judges handle the cases and the parties and other litigants take part in litigation. The OLP shall deploy the secured and stable information system and store and transmit the case data in accordance with the Network Security Law of China. A party of a dispute may choose to file the dispute to the OLP of one of the Internet courts (e.g. the court in the defendant’s residence). In order to use the OLP, the parties and any other litigants shall complete the identity authentication through certificate verification, biometric identification or national identity card verification, and obtain the special accounts to access the platform. All the case materials, including electronic evidence, shall be imported in or generated from the OLP. Non-electronic evidence should be converted into electronic form through scanning, photographing, etc. If any party objects to the authenticity of the materials submitted by the other party and presents the reasonable grounds, the Internet courts shall require the party to provide the materials in the original form. The actions taken by litigants through the OLPs are legally effective. On the OLP, the judges of the Internet courts receive and confirm the receipt of the parties’ submissions, organize the evidence exchange and cross-examination between the parties, conduct the hearings via video conferencing, simultaneously generate the electronic transcripts of the hearings through voice recognition and authenticated by the parties’ electronic signatures, render the electronic judgments, decisions or orders and deliver to the parties in electronic means. For example, the Beijing Internet Court conducted the online hearing for a copyright dispute case before the World Intellectual Property Day (April 26, 2020). Both parties located in different cities joined the hearing through the OLP and presented the case to the judges in the virtual courtroom. The whole hearing process was webcasted through live streaming on the Internet. Although OLP enables the whole judicial proceedings completed online, the Internet courts may encounter the problem of service of process to the defendants. After the plaintiffs file the lawsuits, the defendants shall enjoy the due process right of being notified according to the Civil Procedural Law of China. Traditionally, the defendants are notified either through the registered mails or court-clerks’ hand delivery of the documents. The proof of service is required by the law. The Internet courts replace the traditional hard-copy notifications with the electronic ones sent to the defendants via emails, mobile text messages or messaging via social media (e.g. WeChat). However, the e-notifications might not be effectively delivered to the defendants if they are sent to the defendants’ obsolete email addresses, mobile numbers or social media accounts. It is also difficult to generate the proof of service for the e-notifications. The Internet courts have adopted many methods to enhance the efficacy of the e-notifications. For example, the courts sent to the defendants the e-notifications through the so-called ‘screen-lock’ text messages, which the defendants must click through in order to access any other data on the mobile phones. However, service of process can hardly be an issue in e-commerce cases. Since the transactions are concluded and/or performed on the Internet, both parties have adapted to e-communications and their e-contacts (such as the user accounts on the e-commerce platform) must be actively in use. Given that most cases handled by the Internet courts are e-commerce disputes, service of process does not pose as a big problem affecting the due process. C. E-Evidence System E-commerce disputes primarily rely on e-evidence. The Internet courts, through the respective OLP, enable the whole process of evidence submission, storage, exchange, cross-examination and authentication completed online. Evidence in electronic form is admissible under the Civil Procedural Law of China. According to the interpretations made by the Supreme People’s Court, electronic data evidence under the Civil Procedural Law of China refers to the digitally stored, processed or communicated information of Internet users’ registration, identity verification, e-transaction records, login records and any other data that may prove the facts of the cases. E-evidence system undergoes the developments in the new environment of the Internet courts. 1. E-Evidence Authenticity. — The Supreme People’s Court requires that the parties submit the ‘original’ electronic data as evidence. According to the E-Commerce Law, e-commerce operators shall, in the course of settling e-commerce disputes, provide the ‘original’ contract and transaction records. Technically, electronic data has no originality. The ‘original’ contracts and transaction records primarily refer to the evidence authenticity. E-evidence is fragile and can easily be tampered or modified. One party may object to the authenticity of the electronic data submitted by the other party because of its flaws in data generation, collection, storage or transmission. The parties may adopt the automated digital evidence acquisition tools (like EnCase and FTK Imager) to protect the authenticity of e-evidence. The Internet courts assess the authenticity of evidence in accordance with the legally-defined criteria. According to the Electronic Signature Law of China, a data message meets the requirements of originality required by laws and regulations, provided that it can effectively represent the contents, be available for subsequent use, and reliably guarantee its intactness from the time of its final formation. Under the E-Commerce Law of China, the information of goods, services and transactions in complete, confidential and available form is original. The Supreme People’s Court provides the following circumstances that shall be taken into account for assessment of e-evidence’s authenticity: (i) Whether the hardware and software environment such as the computer system through which electronic data is generated, collected, stored and transmitted are safe and reliable; (ii) Whether the hardware and software environment such as the computer system through which electronic data is generated, collected, stored and transmitted are in normal operation, or whether the electronic data that is generated, collected, stored and transmitted during abnormal operation; (iii) Whether the hardware and software environment such as the computer system through which electronic data is generated, collected, stored and transmitted have the effective detecting or monitoring methods to prevent malfunction; (iv) Whether electronic data is stored, extracted and transmitted in its entirety and whether the methods of storage, extraction and transmission is reliable; (v) Whether electronic data is generated and stored during normal communication; (vi) Whether the subject who stores, extracts or transmits electronic data is appropriate; and (vii) Any other element affecting authenticity and reliability of electronic data. In e-commerce cases, the contracts are usually concluded or performed through automatic information systems set up by e-commerce operators. If the parties agree the form that the electronic data is stored, transmitted or extracted in the automatic system, the data can be deemed the authentic evidence. Besides, if both parties have their own automatic information systems to interact with each other, the contracts and transitional records generated during their normal business activities can be deemed authentic evidence. Or, if one party provides the automatic information system to be used by the other party (e.g. the e-commerce operators sell the goods or provide the services through the self-owned websites), the contracts and transactional records stored in its system submitted upon the request of the other party or the court’s order constitute the authentic evidence. Or, if both parties use the automatic information system on an e-commerce platform, the electronic data recorded, stored, confirmed and provided by the platform operator should be deemed authentic evidence. E-commerce contracts and transaction records may also be verified by electronic signatures, trusted time stamps, hash value verification and other tamper-proof technical means or through the Internet courts’ OLP. The courts may, according to the party’s application or ex officio, entrust the persons or institutions with the expertise to verify the authenticity of the electronic data or obtain other relevant evidence for verification. 2. Blockchain Technology. — The technology of blockchain may provide the reliable solution for evidence’s authenticity. A blockchain is a form of distributed ledger technology, with data encrypted and recorded across a network of computers and updated in real time, through pre-determined rules (consensus algorithms). Each computer connected to the network has identical copy of the data on the network and every change and acceptance of the e-copies is verifiable without need to contact the issuing authority to reduce trade risks, which significantly improves the traders’ experience. With the implementation of blockchain in e-commerce, all the parties in trade will simultaneously use and share the same copy of data, which can ensure the evidence authenticity. The Balance Blockchina Project (BBP) is the first Chinese e-evidence platform established by the Beijing Internet Court on September 9, 2018. It was established under the principles of neutrality, openness, security and controllability. The project is being supported by the Beijing High People’s Court, the Center of Expert Testimony, the Public Notary Bureaus, industrial associations, big technical and financial enterprises and the Internet platform operators. As announced by the Beijing Internet Court, the BBP is the blockchain 2.0 that connects hundreds of businesses in technical services, application services, intellectual property and financial exchanges. The project has been proved valuable in the trials of copyright dispute cases. After the copyright owners upload the evidence of copyright ownership, infringing materials or licensing agreements, etc. to the e-evidence storage systems, the evidence will be verified by the accredited service providers and then encrypted as a ‘block’ stored in more than 20 nodes run by the partner entities of the BBP. In the normal circumstances, the Beijing Internet Court may directly acknowledge the authenticity of the evidence stored on the BBP, which substantially accelerates the whole judicial proceedings. The BBP could be a big step forward for the trials of e-commerce disputes relying on the e-evidence. But it is uncommon for e-commerce operators to submit their business data and documents to the judicial blockchain system even without any dispute. E-commerce operators may also concern about security and stability of the e-evidence storage system and verification services associated with the BBP. 3. Duties of E-Commerce Operators. — Under article 62 of the E-Commerce Law of China, an e-commerce operator shall provide the original contracts and transaction records either as the party of a dispute or as a third party. First, the burden of proof. Under the Civil Procedural Law of China, a party shall be responsible for providing the evidence in support of his or her allegations. According to the judicial interpretations of the Supreme People’s Court, if a party responsible for providing the evidence to prove the claimed facts or to rebut the facts claimed by the other party fails to fulfill the burden of proof in absence of proper reason, the party shall bear the unfavorable consequences, unless the law provides otherwise. According to the Civil Procedural Law of China and E-Commerce Law of China, an e-commerce operator in dispute with another party shall submit to the court the original contracts and transaction records retained in its system; otherwise, the court may recognize the facts claimed by the other party. Second, provision of evidence. In accordance with the Civil Procedure Law of China, the people’s courts have the power to investigate and collect evidence from relevant entities and individuals, and the relevant entities and individuals may not refuse; anyone refuses or obstructs the investigation of people’s court and the collection of evidence may be fined by the court. E-commerce platform operators, under the E-Commerce Law of China, shall record and store the goods and services information and the transaction information on the platforms for at least three years from the date of the completion of transaction. In the disputes between the on-platform operators or between on-platform operator and consumers, the e-commerce platform operator shall submit the original e-commerce contracts, transaction records and other relevant information retain in its system, provided that the party applies to the court or the court issues the order, ex officio, to obtain such information. The E-Commerce Law of China requires that the platform operators actively assist consumers to protect their legitimate rights and interests in their dispute with the on-platform operators regarding the goods or services purchased on the platforms. Provision of the contracts, transaction records and other evidence is the important way for the platform operator to assist the consumers to safeguard their legitimate rights and interests. Third, legal consequence of evidence forgery or loss. According to the E-Commerce Law of China, if the people’s court is unable to ascertain the facts because that the e-commerce operator loses, fabricates, tampers, destroys, conceals, or refuses to provide the aforesaid information, the e-commerce operator shall assume corresponding legal liability. If the e-commerce operators’ acts of forging, tampering, destroying, concealing, or refusing to provide the original contracts or transaction records make the people’s court unable to ascertain the relevant facts, they shall be punished for nuisance of civil proceedings under the the Civil Procedural Law of China, and the people’s court may impose fines and/or detentions according to the circumstances; where a crime (e.g. forgery of evidence) is committed, the operators shall be prosecuted for criminality according to law. Where the e-commerce operators ‘lose’ the evidence, the act is not specifically stipulated in the Civil Procedural Law of China. However, if the operators have the duty to retain the e-commerce information and data, they should be responsible for losing the evidence. According to the E-Commerce Law of China, the platform operators shall, in absence of the other legal stipulations, record and maintain the information on goods and services divulgated on the platform within three years from the date of completion of the transaction. If a platform operator lost the data and information within the retention period, it shall be subject to the corresponding administrative penalties. II. E-COMMERCE SUI GENERIS ODR SYSTEMS The E-Commerce Law of China establishes the sui generis ODR systems for e-commerce, i.e. online complaining mechanism and e-commerce platform ODR. These new systems, although still under construction, contain the elements important to the due process. A. Online Complaining Mechanisms Many e-commerce operators have voluntarily established the mechanisms to enable the consumers or other business partners to file the complaints. The E-Commerce Law of China, for the first time, requires that the online complaining mechanisms shall be established by all e-commerce operators. Under the Law, e-commerce operators shall develop convenient and effective complaining and reporting mechanisms, publish the means of complaining and reporting and the relevant information, and accept and handle the complaints and reports in a timely manner. This new legal requirement deserves careful examination. 1. Requirements on Online Complaining Mechanisms. — According to the E-Commerce Law of China, the online mechanism established by e-commerce operators shall be convenient and effective mechanisms for receiving the complaints and reports; the means for filing the complaints and reports shall be published; and the complaints and reports shall be timely accepted and handled. Although the E-Commerce Law of China does not specify the implementation methods, the complaining and reporting mechanisms in e-commerce are generally operated through the automatic information systems, through which the users may conveniently find the relevant methods and information for filing the complaints and reports, submit the complaints or reports, track the case status and access the results. Most large-scale e-commerce operators, especially platform operators, have all established the automatic information systems to receive the complaints and reports. The automatic information system may be embedded in the user interface or in email system, whichever is more convenient and effective. E-commerce operators shall not set up the so-called ‘sham’ mechanism to deceive the public; neither shall they publish any false, fake, invalid or outdated methods for filing the complaints or reports. After receiving the complaints or reports, the e-commerce operators shall promptly inform the complainants or informants of the acceptance of cases or provide the inquiry systems for the complainants or informants to check the status of the cases. Since the complaints and reports may involve personal information, trade secrets or other confidential information protected by law, e-commerce operators are not required to publicly disclose the contents of the complaints or reports and the results of case handling. 2. Receiving Complaints or Reports. — Dependent on the targets of the online complaints or reports, e-commerce operators are in the different situations of accepting and handling the complaints and reports. If the complaints or reports are directly against the e-commerce operators, the accepted disputes could be settled through the negotiation between the e-commerce operators and the complainants. However, if the complaints or reports are against the third parties, the e-commerce operators cannot directly negotiate with the complainants but may take the other measures to handle the disputes. First, negotiation and settlement. Under the E-Commerce Law of China, e-commerce operators include e-commerce platform operators, on-platform business operators, and e-commerce operators that sell goods or provide services through self-owned websites, social media, video streaming or other network services. All types of operators shall enable the counterparties to directly complain and report to them regarding the issues in transactions (such as e-payment, after-sale services, delayed delivery, quality defects, etc.) and resolve the issues that are complained or reported through communications, negotiations and settlement agreements. The online complaining mechanism is especially useful to resolve the consumer disputes. The e-commerce operators may settle the disputes with the complaining consumers amicably so as to avoid deteriorating the disputes and resorting to the courts or other external dispute resolution channels. The operators shall never revenge or punish the consumers who filed the complaints or reports. The online complaining system helps the e-commerce operators improve the customer experience, accept public supervision and upgrade the operational level. Second, e-commerce platform operators. Normally, a business operator receiving the complaints and reports against a third party can hardly do anything to handle the disputes other than informing the complainants to seek the legal remedies from the courts or other authorities. E-commerce platform operators, however, create the new contexts. Since they provide virtual marketplace, deal-making and information divulgation for the parties to independently engage in transactional activities, they are capable to handle the disputes between the complainants and the on-platform operators. Under the E-Commerce Law of China, an e-commerce platform operator shall retain the authentic contact information of all the on-platform operators, specify the on-platform operators’ rights and obligations in respect of joining and quitting the platform, assurance of the quality of goods and services, protection of consumer rights and interests, and protection of personal information through the platform service agreements and transaction rules, and handle the complaints and reports against the on-platform operators. Platform operators shall, in the first place, handle the complaints or reports according to the explicit legal requirements. Under the E-Commerce Law of China, upon the complaints or reports that illegal information on goods or services (such as contrabands offered for sale) is available on the platforms, the platform operators shall take necessary measures to eliminate it and report the issues to the competent authorities. If receiving the reports on cyber-security incidents occurring in the network system, the platform operators shall initiate the contingency plans immediately, take corresponding remedial measures, and report to the competent authorities. Upon the notifications of intellectual property holders regarding infringements by on-platform operators, the platform operators shall take down the infringing contents timely and forward the notifications to the on-platform operators, or would be subject to joint-and-several liabilities with the infringing on-platform operators.Platform operators may also handle the complaints or reports based on the platform service agreements and transaction rules. If the on-platform operators are complained or reported for violations of quality guarantee of goods and services or infringement of consumer rights, personal information rights or other legal rights, the platform operators may, in accordance with the platform service agreements and transaction rules (or polices), warn the on-platform operators or even suspend or terminate the on-platform operators’ accounts. During the COVID pandemic, many on-platform operators exploited the consumers’ fear by incorrectly marketing face masks with specific keywords such as ‘Kill Coronavirus’. E-commerce platforms have taken actions against the misleading marketing activities. For example, Amazon sent out a notice to the sellers warning against mentioning the terms ‘Covid-19’ and ‘Coronavirus’ in their listings; eBay has been employing a combination of digital and manual surveillance tools to remove products marketed with the term ‘Coronavirus’ that violates its policies regarding making unsubstantiated health claims; Alibaba announced that it had intercepted and removed 570,000 questionable masks; other platforms, including Walmart and Etsy, also removed thousands of items with medical claims that violate the respective policies. Third, handling the complaints or reports. Although a platform operator enjoys the governance power on the platform, it has no capacity or authority to ‘settle’ all the complaints or reports (e.g. allegation of crimes). There are many cases in which the platform operator can only informing the complainants or informants to pursue the legal remedies from the other channels, such as reporting to the competent authorities for on-platform operators’ price gouging or mask hoarding during the COVID-19 pandemic. Therefore, e-commerce operators are merely required to accept and ‘handle’ the complaints and reports. Compared with settlement, the meaning of ‘handling’ (i.e. ‘Chuli’ in Chinese) of cases is much broader. Unfortunately, the official English translation provided by the National People’s Congress mistakes ‘handling’ for ‘settling’. According to such misinterpretation, e-commerce operators would have to reach the settlement agreements with all the complainants or make decisions upon all the reports, which is neither reasonable nor feasible. ‘Jutousu’, ‘Black Cat Complaining’ and other specialized online complaining services permit consumers to complain against business operators for product defects or other issues. Among them, ‘Jutousu’ (meaning aggregation of complaints) is a well-known online non-profit non-governmental consumer complaining media established on March 15, 2013. Up to January 2019, ‘Jutousu’ had accepted more than 500,000 consumer complaints. ‘Jutousu’ is not an e-commerce platform but functions like a bulletin board system (BBS), on which consumers may publicly post their complaints against the specific businesses. These online complaining services have neither authority nor capacity to settle any complaints. What they can do is to inform the businesses of the consumers’ complaints. The consumers’ complaints posted online may have the effect of ‘naming and shaming’ and let the pertinent businesses be defamed by the wider community. B. E-Commerce Platform ODR According to article 63 of the E-Commerce Law of China, e-commerce platform operators may establish online dispute settlement mechanisms, develop and publish dispute settlement rules, and fairly and equitably settle the disputes between parties based on the principle of voluntariness. Platform ODR is an important institutional innovation containing many important sprouts for the growth of e-commerce dispute resolution. Platform ODR may be one way for the platform operators to handle the complaints or reports in accordance with the transaction rules and service agreements. For example, the consumers’ complaints against the suspected counterfeit goods sold by the on-platform operators may be solved through the platform ODR according to the platform’s dispute resolution rules. Unlike the mandatory online complaining and reporting mechanisms, the platform ODR is voluntary. Some platform operators that have no sufficient expertise and capability may choose not to develop the ODR mechanisms at the present time, although platform ODR has the potential to become the common practice for platform governance in the long run. Platform ODR is applied either based on the parties’ explicit and informed consent or based on the platform service agreements and transaction rules that incorporate the platform ODR. In the latter, the parties that subscribe to the service agreements and transaction rules (such as the on-platform operators) are bound by the platform ODR. In the disputes of cross-border e-commerce, platform ODR offers to the parties from different countries a nimble and alternative means of dispute resolution. 1. Dispute Resolution Rules. — Platform dispute resolution rules are one type of the platform rules adopted by the platform operator to govern the ecosystem of the platform. Like any other platform rules, dispute resolution rules shall be developed in compliance with the legal requirements. The rules shall be formulated according to the principles of openness, fairness and impartiality. The rules shall be transparent by continuously displaying on the platform’s homepages and primary webpages to ensure all parties’ convenient access to and download of such information. When modifying the rules, the platform operator shall solicit public comments at prominent places on their homepages and primary webpages and take reasonable measures to ensure that the relevant parties can fully express their opinions in a timely manner. The modified contents shall be published at least seven days prior to implementation. 2. Dispute Resolution Procedures. — The E-Commerce Law of China requires the platform operators ‘fairly and equitably’ settle the dispute between the parties. The international experience may help China to build up a few critical benchmarks for assessment of the platform ODR proceedings’ fairness and equitability. For example, the United Nations Technical Notes on Online Dispute Resolution set out the principles that underpin any ODR process, including fairness, transparency, due process and accountability; under the principle of transparency, the ODR platform is advised to disclose any relationship with a particular service provider so that users of the service are informed of potential conflicts of interest; under the principle of independence, ODR platform is advised to adopt a code of ethics for its neutrals in order to guide neutrals as to conflicts of interest and other rules of conduct. The European Union Directive on Consumer Alternative Dispute Resolution (ADR) also requires the natural persons in charge of ADR be independent, impartial and having expertise. (i) Neutrality. Platform ODR is inherently applied to resolve the disputes occurred on the platform, including the disputes between the on-platform operators, between on-platform operators and consumers, and between on-platform operators and other entities (such as intellectual property owners). However, any dispute involving the platform operator that sets up the ODR mechanism shall be excluded from the scope of application. The platform operator that develops and publishes the ODR rules and maintains the proceedings is literally the ‘owner’ of the dispute resolution mechanism. No one should be a judge in his own case. If a platform operator is directly or indirectly involved in a dispute, application of the platform ODR would lose credibility as well as neutrality. Neutrality, therefore, should be one of the benchmarks of platform ODR. The disputes involving a platform operator (e.g. with the on-platform operators about the service agreements) may not be resolved through the platform ODR but through mediation, arbitration, litigation, etc. According to the E-Commerce Law of China, a platform operator shall help to protect the lawful rights and interests of the consumers disputing with on-platform operators. However, once the platform ODR is chosen to resolve the consumers’ disputes, the platform operator shall not help the consumers at the cost of the proceeding neutrality. (ii) Independence. According to the E-Commerce Law of China, the platform operators that establish the ODR mechanisms are not required to directly ‘manage’ the proceedings. A platform operator, even if not a party of a dispute, inevitably has the contractual relationship or other connection with the on-platform operators and the consumers. If the disputes are handled directly by the platform operator (e.g. its employees, affiliates, associates or others who have the direct or potential conflict of interests with it), the proceedings’ fairness and equity may be questioned. Independence is another benchmark to ensure platform ODR settle the disputes fairly and equitably. Instead of directly managing the platform ODR proceedings, the platform operator should delegate the independent organizations or individuals to provide the dispute resolution services. Platform ODR may be analogized to the Uniform Domain Name Dispute Resolution Policy (UDRP). ICANN, the global steward of domain name system, although established the ODR system, develops and publishes the dispute resolution policy and procedural rules, does not directly operate the dispute resolution mechanisms. Instead, ICANN authorizes the professional dispute-resolution organizations (such as the Arbitration and Mediation Center of World Intellectual Property Organization) to independently resolve the disputes in accordance with the policy and rules. (iii) Adjudications without finality. Since the E-Commerce Law of China does not specify the proceeding design of platform ODR, the platform operators may construct the ODR mechanisms in a variety of ways, such as blind-bidding, mediation, adjudication, etc. Many large-scale platform operators have established the experimental adjudicative ODR mechanisms. For example, Alibaba establishes the Public Reviewer Mechanism to resolve the disputes occurred on Taobao platform; Sina establishes the ‘Weibo Community Convention’, under which the Weibo Community Committee decides by majority votes the disputes occurred on Weibo. If the platform ODR adopts adjudicative model, it is questionable whether it is a new form of arbitration. The answer is No, because arbitration in China can be only conducted by the arbitration commissions that are officially set up by the competent authorities. A platform ODR mechanism, unless specially accredited as an arbitration commission, is not eligible to conduct arbitration according to the law. The adjudications of platform ODR are also different from arbitral awards with legal finality. Platform ODR is still in the primitive stage and the proceedings are still evolving. Even if a platform ODR mechanism adopts the adjudicative model, the adjudications have no finality. Any party that is not satisfied with the adjudication should be able to sue to court or pursue legal remedies through the other means. In this regard, platform ODR is similar to the domain name dispute resolution. According to the UDRP, the proceeding shall prevent neither party from submitting the dispute to a court of competent jurisdiction for independent resolution before the proceeding is commenced or after such proceeding is concluded. Unlike the arbitral awards that rely on the enforcement of the court of competent jurisdiction, the adjudications of platform ODR may be enforced through internal mechanism. The platform operators, based on the platform service agreements and transaction rules, are able to enforce the ODR adjudications against the on-platform operators in the form of warnings, suspension or termination of the platform services, etc. If the platform operator and on-platform business operators set up consumer protection deposits by agreements, the platform operator may also enforce the monetary remedies by paying compensation to the consumers with the deposits. Self-executed enforcement reinforces the credibility and effectiveness of platform ODR, although any party unsatisfied with the adjudication is still able to sue to the court. Platform ODR may learn the lessons from the UDRP under which the remedies are limited to cancellation or the transfer of the registrations of the disputed domain names and directly enforced by the registrars of the domain names. The self-executed enforcement within the domain name system proves successful. Although having no finality, very few UDRP decisions are appealed to the courts. III. OTHER ODR SYSTEMS The Supreme People’s Court supports the parties’ voluntary choice of mediation, arbitration and other non-litigation methods to resolve their e-commerce disputes and recognize the legal effects of ADR. With the support of the information and communication technology, the traditional ADR systems such as negotiation, mediation, arbitration, etc. are gradually conducted on the Internet. Online arbitration or mediation brings new challenges as well as new opportunities to ADR systems. Online mediation, arbitration and other ODR mechanisms avoid the complicated legal issues of jurisdiction and conflicts of laws and are suitable to resolve the disputes of cross-border e-commerce. With the implementation of the ‘One Belt One Road’ (OBOR) international strategy, China has concluded with the partner countries many bilateral trade or investment agreements with the ODR mechanisms for cross-border e-commerce. China has established the OBOR Arbitration Center in 2016 and actively participates in the international ODR initiatives. A. Online Arbitration Under the Arbitration Law of China (enacted on August 31, 1994 and effective from September 1, 1995), contractual disputes and other disputes arising from property rights or interests may be put to arbitration. China only acknowledges institutional arbitration conducted by the arbitration commissions established by the relevant authorities and chambers of commerce under the coordination of the municipal or provincial governments. Many arbitration commissions have issued the online arbitration rules. For example, the China International Economic and Trade Arbitration Commission (CIETAC), China Maritime Arbitration Commission and the Beijing Arbitration Commission, etc. have also issued the online arbitration rules. CIETAC, the largest arbitration organization in China and one of the major permanent arbitration institutions in the world published the Online Arbitration Rules in 2009 and had tried a number of cases through online arbitration. In online arbitration proceedings, all the submissions and all the communications are in electronic forms such as emails, electronic data interchange (EDI), facsimile, etc.; the evidence submitted by the parties is generated, sent, received or stored by electronic, optical, magnetic or other similar means; electronic evidence with a reliable electronic signature shall have the same admissibility and weight as evidence with a handwritten signature or affixed seal; arbitral tribunal may, if necessary, investigate facts and collect evidence related to the case from e-commerce service providers, logistics distribution companies and payment banks, etc. Although arbitration commissions have accumulated the valuable experience, online arbitration still has a long way to go. For example, arbitration commissions may need to deploy the advanced technologies like the OLPs of the Internet courts to ensure the smooth operation of the proceedings online. 1. Arbitration Agreements. — The parties’ agreement to engage in arbitration is the prerequisite of settling the dispute through arbitration. Without such an agreement, no arbitration commission shall accept the application for arbitration by any party. According to the Arbitration Law of China, an arbitration agreement shall be either a written agreement for arbitration reached by the parties before or after the dispute or an arbitration clause included in the parties’ prior agreement. It is legally required that arbitration agreements be in the written form. If in electronic form, the arbitration agreements that fulfill the written requirement shall be capable of expressing the contents tangibly and stable enough for subsequent use. According to the CIETAC Online Arbitration Rules, an arbitration agreement concluded through e-commerce automatic information system and contained in telegram, telex, facsimile, EDI, emails or any other electronic forms shall be deemed in writing. In recent years, many e-commerce operators incorporate the arbitration clauses in the standard terms of their contracts with the consumers. However, these operators should be mindful that the Arbitration Law of China requires that the arbitration agreements be reached by the parties upon their free will. An arbitration agreement forced upon one party by the other party by means of coercion shall be invalid. Where an arbitration clause is incorporated in the standard terms of a business-to-consumer (B2C) e-commerce contract, the business operator that supplies the standard terms shall call the consumer’s attention to the terms and shall explain upon the request of the consumer that the arbitration clause will preclude both parties from suing to court. If some operators maliciously manipulate the arbitration clauses to deter the consumers from resorting to dispute settlement, e.g. by intentionally designating the arbitration commissions located in Beijing, Shanghai or other municipalities in hoping that the consumers would not travel long distances to apply for arbitration for small-amount disputes, the consumers enjoy the right to challenge the validity of the standard arbitration clauses either in court or at the arbitration commission provided that the e-commerce operators’ coercion or bad faith can be proved. 2. Hearings. — Under the Arbitration Law of China, an arbitration tribunal shall hold the oral hearing for the trial of a case, except where the parties agree not to. According to the CIETAC Online Arbitration Rules, an oral hearing may be in the forms of video conferencing or other electronic means. At the oral hearings, the evidence shall be exhibited and examined by the parties and the witnesses may testify through video conferencing or any other appropriate means decided by the arbitral tribunal. In the current technological environment, it is important that arbitral tribunals have the power of discretion to conduct online arbitration in any manner that can ensure both parties are being treated equally and having the reasonable opportunity to present their case. Therefore, even in an online proceeding, an arbitral tribunal may decide to hold traditional face-to-face oral hearing and permit the witness to provide the testimony in person, or to try the case completely based on the written submissions of the parties. Under the CIETAC Online Arbitration Rule, an arbitral tribunal may also, upon the agreement or request of the parties, suspend the arbitration proceeding and conduct online mediation by means of video conferencing or other electronic communication methods. Unlike public court hearings, arbitral hearings are principally non-open, in which only the parties and their authorized representatives may take part. When conducting the oral hearings online, the tribunals have to make special efforts to ensure that no unauthorized persons are present and/or speak at the hearings. For example, the tribunal may request the parties to mutually verify the network settings and give consent to the participants from the other party. 3. Arbitral Awards and Enforcement.— Under the Arbitration Law of China, arbitral awards shall be signed by arbitrators and affixed with the seals of the arbitration commission. According to the CIETAC Online Arbitration Rules, an award shall be made in written form, shall state the rendering date and the place the award is made, and shall be signed by the arbitrators and affixed with the CIETAC official seal. Therefore, even though the tribunals render and sign on the arbitral awards in electronic form, the awards have to be converted into the hard copies for affixation of the arbitration commissions’ official seals (unavailable in electronic form at the present time). Under the Arbitration Law of China, arbitration awards are final; after an award being rendered, the arbitration commission or the people’s court shall not accept the refiling of the case concerning the same dispute by any party. Even if a party applies for a court of competent jurisdiction to revoke the arbitral award, the court does not re-examine the facts of the case and the reasoning of the award but only examines whether the arbitral conditions (e.g. validity of the arbitral agreements) are met or whether any suspected crime is committed in the arbitral proceeding. The parties shall execute the arbitral award. If any party refuses to execute the award, the other party may apply for enforcement to the court in accordance with the relevant provisions of the Civil Procedure Law of China, and the court should enforce the award. In order to apply for enforcement, the arbitral awards shall be in written form. The awards in electronic form may be rejected for enforcement by the courts. This is another important reason why online arbitration has to end up with the awards in hard copies. The Arbitration Law of China is being revised. Hopefully, all the barriers to online arbitration could be eliminated entirely in the near future. 4. Arbitral Awards Enforced by Foreign Courts. — If cross-border e-commerce disputes resort to online arbitration, the arbitral awards may rely on foreign courts for enforcement. Arbitration as a means of international dispute settlement needs the support of the international legal framework. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter referred to as the New York Convention) is widely considered the foundational instrument for international arbitration and provides common legislative standards for the recognition of arbitration agreements and court recognition and enforcement of foreign and non-domestic arbitral awards. The Convention makes sure that foreign and non-domestic arbitral awards will not be discriminated against and the member states shall recognize and enforce such awards in their jurisdiction in the same way as domestic awards. China is one of the member states of the New York Convention and the arbitration awards issued by the Chinese arbitration commissions may be recognized and enforced by the courts in other member states. But online arbitration may counter the extra legal barriers. According to the New York Convention, the private arbitration agreements that shall be recognized by the courts of member states shall be in writing, and the party applying for recognition and enforcement shall supply the duly authenticated original award (or a duly certified copy) and the original agreement (or a duly certified copy). It is unclear whether the foreign courts will recognize and enforce the awards of online arbitration if the parties supply the arbitration agreements and/or the awards in electronic form. Fortunately, the New York Convention has been ‘digitized’ by the United Nations Convention on the Use of Electronic Communications in International Contracts (hereinafter referred to as the Electronic Communications Convention or ECC). The ECC aims at facilitating the use of electronic communications in international trade by assuring that contracts concluded electronically are as valid and enforceable as their traditional paper-based equivalents. The ECC sets out the criteria for establishing the functional equivalence between electronic communications and paper documents.It is worth noting that the ECC provisions apply to the use of electronic communications in connection with the formation or performance of a contract to which the New York Convention applies. Through the legal design of the ECC, the legal obstacles to the wide use of electronic communications in arbitration agreements and awards can be eliminated and online arbitral awards can be fully recognized and enforced by foreign courts. The member states of the New York Convention, after acceding to the ECC, would be able to use the legal bridge between international arbitration and electronic communications. China is expected to accede to the ECC soon so as to enable online arbitral awards recognized and enforced by foreign courts. B. Online Mediation Mediation is known as an informal, flexible and efficient way of dispute resolution. The mediator’s role is not to adjudicate, but rather to facilitate discussions between disputing parties to arrive at a mutually acceptable solution. Online mediation has become an important mechanism for resolving the e-commerce disputes, especially between businesses and consumers. 1. Mediation Organizations. — Under the E-Commerce Law of China, consumer organizations, industrial associations or other mediation organizations established according to law can mediate e-commerce disputes. E-commerce mediation is commonly conducted on the Internet. With the consent of the parties, mediation process and the parties’ information may be disclosed online for transparency and enforcement. The people’s mediation is a unique mechanism that may mediate the e-commerce disputes. Under the People’s Mediation Law of China, the people’s mediation committees are approved by the local judicial authorities and based on the parties’ voluntary mediation agreements mediate the civil disputes through persuasion and guidance. The judicial system is strengthening the cooperation with the people’s mediation commissions, promoting their institutionalization and standardization, expanding the scope and scale of the people’s mediation to assist the courts to resolve disputes. In March 2014, the first Internet mediation organization, i.e. ‘Sina People’s Mediation Committee’, was approved by the authorities. It is an autonomous organization to mediate the disputes on Sina Weibo platform. During mediation, the Committee helps the parties to voluntarily reach settlement agreements through persuasion, facilitation and other reasonable methods. Since its establishment, the Committee has accepted for average 20,000 cases per week. The disputes involve defamation, copyrights or trademark infringements and other legal issues. The mediation process is entirely online and the results are published. Apart from the people’s mediation, there are many other mediation channels. Consumers disputing with e-commerce operators may request the Consumer Association or other mediation organizations to mediate. E-commerce platform operators, after receiving the complaints or reports against the on-platform operators, may handle the complaints or reports through mediation. E-commerce industrial associations may offer mediation services. Chambers of commerce and other entities can also set up commercial mediation organizations to provide the specialized mediation services online. 2. Enforcement of Settlement Agreements. — If the parties reach the settlement agreement through online mediation, they may apply to the court to confirm the validity of the agreement. Although the settlement agreements may be in electronic form, the parties normally convert the agreements into hard copies for judicial confirmation or enforcement. According to the People’s Mediation Law of China, the parties of the settlement agreement shall perform the agreement, unless they dispute the validity of the agreement and/or file a lawsuit with the court. The parties of the settlement agreement may jointly apply to the court for judicial confirmation within 30 days from the conclusion of the agreement. The court shall promptly review the settlement agreement and, if appropriate, confirm its validity in accordance with the laws. The settlement agreement that has been confirmed by court as valid may be enforced by the court upon the party’s request. If the court confirms that the settlement agreement is invalid, the parties may revise the original agreement, replace it with a new agreement, or file a lawsuit with the court. If the settlement agreements contain the contents on money or security payment, the courts may, upon the creditor’s application, issue the payment orders in accordance with the Civil Procedure Law of China. If the debtor neither file a written objection nor perform the payment order within the time limit, the creditor may apply to the court for enforcement of the payment order. After the parties reach the settlement agreement through mediation, either party may, in accordance with the Public Notary Law of China, apply to the public notary office to notarize the agreement and make it legally enforceable. The Supreme People’s Court has made efforts to enhance the efficacy of mediation. For example, even if no settlement agreement can be reached through mediation, the mediator may still, based on the consent of the parties, record in writing the facts that both parties concede during the mediation process. The parties shall sign and confirm the record. In the subsequent proceedings, the parties do not need to prove the uncontested facts confirmed through mediation, unless the confirmation contradicts to the national interests, public interests or the others’ legitimate rights and interests. If the parties cannot reach a mediation agreement but roughly concede the facts of the disputes, the mediator may, upon the consent of the parties, composes a mediation plan and serve it in writing to both parties. If no party files a written objection within seven days, the mediation plan shall be deemed a settlement agreement voluntarily reached by both parties. Any party may apply for judicial confirmation of the settlement agreement. 3. Enforcement of Settlement Agreements by Foreign Courts. — Online mediation is an effective means of resolving cross-border e-commerce disputes. However, the parties encounter considerable difficulty in enforcing and invoking the settlement agreements across borders. An international convention has been adopted by the UN to address this problem. The Convention on International Settlement Agreements Resulting from Mediation (hereinafter referred to as the Singapore Convention on Mediation) was adopted in December 2018 by the United Nations General Assembly and will be effective from September 12, 2020. By June 2020, Singapore, Fiji, Qatar and Saudi Arabic have ratified the Convention. The Singapore Convention on Mediation provides an efficient and harmonized framework for enforcement of international settlement agreements resulting from mediation and concluded by parties to resolve commercial disputes.90 A party that can prove that the matter was already resolved by the settlement agreement may invoke the settlement agreement in accordance with the Convention’s rules of procedure and under the designated conditions. The courts of member states shall not refuse the relief granted by the settlement agreement, except for the grounds laid down in the Convention. China is one of the signatories to the Singapore Convention on Mediation and is expected to ratify the Convention in the near future. The Convention will stimulate the use of online mediation for settling cross-border e-commerce disputes. IV. CONCLUSION The COVID-19 pandemic has affected more than 200 countries in the world. But life goes on. In the time of social distancing, e-commerce has become the essential social infrastructure for the operation of supply chain and the guarantee of people’s daily life. Resolving disputes in the ‘untouched’ mode has never been more necessary than at the present time. Through removing the legal barriers and creating an enabling legal environment, Chinese Internet courts, online arbitration and mediation as well as the sui generis e-commerce dispute resolution are able to keep pace with e-commerce. The pandemic will end just as the other global catastrophes in history have, but the networked, diversified and internationalized system will continue to be the trend for dispute resolution.
