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International Law

IT law – a challenge of dispute resolution

Jasna Čošabić, PhD

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IT law or cyber law or internet law, is evolving in giant steps. On its way, it has many challenges to meet and a lot of burdens to cope with. Being a part of international law, it is though specific in its nature, mode of implementation and protection. While the classic international law deals with classic state territories, state jurisdictions, with a clear distinction between national laws, the IT law is uncertain about the state jurisdiction, earthbound borders, rules and proceedings regarding any dispute arising on internet.

However, with a fast development of information technology, the number of legal contracts and businesses on internet rises, requiring the fast response by legal order in terms of regulating and protecting it.

From the time internet emerged, each entity operating on internet provided for its own rules. With the IT becoming more complex and demanding so were the rules. We therefore say that internet is self-regulated, with no visible interference by state, apart from criminal activities control.

Some authors even call the internet private legal order where stateless justice apply. Justice usually needs a state, which is a supreme authority, having the monopoly of violence, or the legitimate use of physical force. But speaking in internet terms, self-regulation has evolved, with the state interferece being mainly excluded.

The form of entering into online contracts gets simplified, mainly requiring just a mouse click by ‘I agree’ or ‘I accept’. The quantity of such legal interactions increases. It is often simpler and more convenient to purchase goods via internet, e-commerce blumishes. Parallely to Single Market, the European Commission, the Junker’s Commission, has started to boost a Digital Single Market in 2015, which would provide growth of digital economy. It’s aim is to provide the EU citizens equal online access to goods and services, making a parallel world to a conventional or a non-digital one. The Commission has just, on 25 May 2016, presented a package of measures in that regard with the objectives of advancing EU data protection rules, reform of telecoms rules, copyright, simplyfying consumer rules for online purchases, providing the same online content and services regardless of EU country, etc.

However, what happens if a dispute arises from an online legal interaction. Which court is in charge? In which state? Under what fees?

The law has always provided for a procedural protection of obligations entered into by various types of contracts. The usual protection belongs to courts. Court proceedings may sometimes be time-consuming, barry expensive fees, and are usually non-voluntary for at least one party to the proceedings. That usually brings the use of multi-level proceedings, recourse to remedies and ends in compulsory enforcement proceedings.

With the development of trade, especially of trade which crossed the state borders, there emerged a system of solving disputes before a non-judicial bodies, arbitration. Arbitration became a convenient way of solving disputes arising from contracts that involve a cross border element. The very important segment, which was not present in conventional court proceedings, is voluntarity of parties which agree even prior to any dispute that might arise, about an arbitration body which would be in charge, in case a dispute happens. The arbitration become institutionalised, like the Paris ICC Arbitration, New York International Arbitration Center, etc.. However, many forms remain non-institutionalised, which include impartial experts in the area of dispute, who with the help of parties, and implementing various forms of mediation and arbitration, aim to resolve the issue. This way of settling cases became very well accepted, as the parties voluntarily agree to arbitration rules and therefore enforcement of any such decision becomes more acceptable to parties and usually deprived of a compulsory element. So not many arbitration awards face compulsory enforcement by courts, which is otherwise provided by the New York Convention .

However, with the emergence of online trade, there also came a question of solving any such dispute that might arise from online trade, whether the subject of such trade are goods or services. It is more natural for parties who enter into their contract online, to solve the dispute online.

In February 2016 the European Commission has launched an Online Dispute Resolution Platform (ODR) in order to provide for the structured and institutionalized recourse to resolving legal disputes arising on internet. It is designed to bring together the alternative dispute resolution (ADR) entities by member states, which fulfill certain quality conditions, provided in the Directive on consumer ADR.

The European Parliament and the Council of the EU have adopted two key documents in respect of online dispute resolution (2013), i.e. the Directive on alternative dispute resolution for consumer disputes and Regulation on online dispute resolution for consumer disputes.

The parties to the proceedings are a consumer, being a natural person, acting for purposes which are outside his trade, business, craft or profession, and resident in the Union, and a trader, a natural or legal person, privately or publicly owned acting for purposes relating to his trade, business, craft or profession.

The fees of the proceedings are supposed to be minimal or none. The length of proceedings should not exceed 90 days. Comparing to court proceedings, which are often lengthy and costly, this makes a good alternative.

Each trader is obliged to make visible the link to ODR platform, informing and enabling thus the consumers to initiate the proceedings in case of dispute.

The online dispute proceedings are to be led by key principles that ADR must fulfil including expertise, independence and impartiality, transparency including listing of ADR entities, natural persons in charge of ADR, the average length of ADR procedure, the legal effect of the outcome of ADR procedure including penalties for non-compliance, the enforceability of the ADR decision, if relevant. ADR proceedings must be effective, available and accessible with duration of up to 90 days except in highly complex disputes.

But the question which arises after every dispute is solved, is the enforcement of its outcome.

While the EU has just recently put forward the ODR platform, creating common principles of procedure for alternative dispute resolution entities joining the platform, there are already some good examples of self-regulated dispute resolution bodies. Some of the most succesful models include Pay Pal, CyberSettle, and Domain dispute resolution-UDRP.

CyberSettle, the world’s first online claim settlement company which was launched in late 90’s and pattented in 2001, invented the ‘double-blind bid’ dispute resolution process, which includes two parties each making three offers and three demands in dispute resolution, in separate ‘blind’ submissions. The CyberSettle automatically choses the closest middle solution. PayPal profiled a system of chargeback, upon the complaint by the customer to his credit card issuer, in case, for example, of not receiving the ordered goods. PayPal holds the funds until the issue is resolved. UDRP (Uniform Domain-Name Resolution Policy) was designed to protect Trademarks from registering the same or similar domain names by non-owners of Trademarks, or cybersquatting.

The common ingredient of these success stories is that the above ODR bodies themselfes provided for an efficient system of enforcement, i.e. the self-enforcement. The self-enforcement is considered to be the simplest and best way of enforcing a decision arising from an online dispute. Self-enforcement is possible with the support of technology.

Another good incentive for enforcement is a trust the trader enjoys in the digital market. The impairment of the trust in the trader, would automatically scale down his position in the digital market. If a trader holds a Trustmark, as a guarantee of his quality, losing it for not complying with an online dispute resolution decision, would put him in a disadvantaged position, and would certainly make him obey the decision.

Moreover, disclosure of list of traders not complying with ADR/ODR decision might be detrimental to their reputation, which speaking of online traders, plays very important role in geting trust from the consumers in digital market. Furthermore, social networking on internet enable the information to spread fast, which as a result may lead to a drop of trader rating.

The trust is, speaking of online business, of utmost importance. Digital market is more sensitive and depending upon acceptance by the public then regular market. It responds quicker and any flaw is easily transmitted via internet. It lacks the physical assesment and therefore it is more reliable on written information. The market rules will certainly define that it is better for a trader to comply with the ODR decision, then to get an unfavourable reputation. E-commerce and e-business relies significantly on trust that it has built towards the custommers. A custommer is much more careful when entering an online shopping site then entering a real shopping mall.

It is still early to have a case-law resulting from running of the ODR platform, as it has just been released in February 2016. However the move by the European Commission to bring the self-regulation and self-enforcement under certain unified rules, shall certainly bring results. The platform is currently applicable in EU member states, except for Croatia, Luxemburg, Poland, Romania and Spain. The remaining 23 member states reported to the Commission a wide list of ADR bodies, which may operate under different names, ombudsman, mediator, arbitrator, etc. This is a huge step in moving from the conventional court system, in cases that originated in online interactions. That gives another unified form to the online legal order that has been creating spontaneously and hectically from the time the internet spread as a tool. The European Commission, representing the key governing functions of the EU, made a move towards bringing online system of running businses, especially B2C, more secure and more convenient for the consumers.

The enforcement of ADR decision should therefore not be uncertainty of online dispute resolution proceedings. In that regard, it should be stressed that a milestone judgment of the European Court of Human Rights, Hornsby v. Greece (1997), provided that it would be ‘illusory of a Contracting State’s domestic legal system allowed a final, binding judicial decision to remain inoperative to the detriment of one party’. Accordingly, all procedural guarantees would be purposeless without protecting for the implementation of the result of the proceedings.

Although the ODR proceedings are not judicial proceedings, often being left without state control, ammounting thus to stateless justice as referred to above, it would be unimaginable that the decision ending the online dispute resolution, remains with no effect in praxis. It would make the whole concept of online dispute resolution useless and deprived of its advantages, such as availability, fast resolution, small or no fees, and would eventually bring parties to the court, with all the shorcomings when online disputes are at stake, such as long proceedings, high fees, time-consuming, duty of appearing of parties in person, but with a certain enforcement. Accordingly, in order for the online dispute resolution to endure and evolve, as a breakthrough in IT law, the enforcement of its outcome, must not be compromised.

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International Law

A sea and thousands of concerns

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The name of the “Caspian Sea” has been recently heard more than any other time! In the meantime, there are rumors, ambiguities and, of course, concerns that need to be described in the Convention on the Legal Status of the Caspian Sea which was signed on August 12 in the port city of Aktau, Kazakhstan.

Accordingly, there are some important points that calls for attention and scrutiny. In general, over the past 21 years, several meetings have been held on the Caspian Sea and how the coastal countries should be benefited from its resources. In these meetings, legal, security, economic, and even cultural cooperation were discussed among the littoral countries.

After more than two decades of fraught diplomatic efforts, the five littoral Caspian nations – Russia, Iran, Kazakhstan, Azerbaijan and Turkmenistan – agreed upon a legal framework for sharing the world’s largest inland body of water. However, as long as all disputes, especially legal conflicts between the participating countries aren’t resolved, it is impossible to talk about the establishment and continuity of sustainable relations among these countries. It should be noted that over the past two decades, one of the main tasks of our country’s Ministry of Foreign Affairs has been to direct this case and determine its legal convention.

1) Prolongation of the finalizing process of a case is not undesirable if it’s the result of scrutiny in the legal and technical parts. This is the case with determining the legal dimensions of the Caspian Sea Convention. After the collapse of the Soviet Union, we witnessed a kind of transformation in the Caspian legal regime. The Soviet Union was divided into 15 countries.

Consequently, Russia, Kazakhstan, Azerbaijan and Turkmenistan each became a separate and independent variable in this equation. Undoubtedly, the transformation of a two-variable legal equation into a “legal-security” multivariable equation is not considered a simple transformation. Therefore, we should understand the complexities of the Caspian case.

The countries of Iran, Azerbaijan, Turkmenistan, Russia and Kazakhstan each have specific demands regarding their share of the Caspian Sea resources. Making a balance between these demands and subsequently realizing them is very difficult and complicated. What is important in this context is to strengthen the “principle of cooperation” among the Caspian coastal nations, and to define joint maritime projects among all neighboring countries to protect the Caspian Sea.

Another point to be taken into consideration here is about the draft of the Caspian Sea Legal Convention and the role of the Foreign Ministry in this process. As mentioned above, the Caspian Sea Case has been open for more than two decades and has not yet come to a complete conclusion. Negotiations held among the Caspian Sea littoral states should distract our attention from the realities.

It should be noted that the establishment of the Caspian Sea Legal Convention is the basis for solving the existing disagreements over the Caspian Sea and defining concrete and conclusive cooperation among the littoral countries. A remarkable part of such security and economic cooperation will be the result of this convention.
In other words, the Convention on the Legal Status of the Caspian Sea can’t and shouldn’t be taken as in the same level with “defining the security and economic cooperation” between the coastal countries. Undoubtedly, the definition of economic, security and even cultural cooperation between the coastal countries depends on the settlement of legal disputes between these countries and setting of a common legal convention.

2) Speaking of controversial issues such as Iran’s 50 percent share of the Caspian Sea, which couldn’t be fulfilled even before the collapse of the Soviet Union, and the creation of false subjectivities in the country, by those who claim to be the representatives of our people, has no result except for the weakening of national security.

his is while the Iranian president, Hassan Rouhani, had emphasized that “we should recognize there are more important issues that need to be addressed.”
This is a legal process, and one of the main tasks of our country’s diplomacy and foreign policy system is to manage and direct this complex process. Obviously, under the current circumstances, expressing biased and targeted words will only lead to the loss of focus of our country’s diplomatic apparatus on this critical case.

Finally, it should be noted that good commitments were made during the meeting among the countries involved in this case. Today, the ministers of foreign affairs of the Caspian littoral states, unanimously emphasize on the necessity of the absence of foreign forces in this region, which is a positive trend. Moreover, from the statements made by the foreign ministers of the Caspian littoral states, we understand that their cooperation on resolving existing disputes has become faster than before.

However, until all legal conflicts between the Caspian littoral countries are not totally resolved and the Convention of the Caspian Sea Law Convention is not perfectly codified, we can’t think of this legal and strategic case as closed and settled. Therefore, in this critical situation, all efforts should be made so that Iran can benefit most.
It is emphasized here that even one singled legal disagreement should not remain among the players involved in the case. Meanwhile, the mechanism for resolving disputes should be carefully decided. Therefore, while welcoming the settlement of the existing disagreements over the Caspian Sea, there shouldn’t be any haste in completing this process.

First published in our partner Tehran Times

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International Law

Iran has to be very careful in future negotiations on Caspian Sea

Payman Yazdani

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Professor of political science says although the text of the Caspian Sea Treaty signed on August 12, 2018 in Kazakhstan does not define the share of each of the littoral states, Iran has to be very careful in future negotiations.

Five Caspian Sea littoral states signed Caspian Sea Treaty on August 12, 2018 in Kazakhstan. The agreement has created many debates about the share of Iran in Iran.

To know more about the issue we reached out to Nader Entessar Professor Emeritus of Political Science in University of South Alabama.

There are many debates on the legal regime of the Caspian Sea. Some argue that according to the treaties of 1921 and 1940 between Iran and the USSR, the share of Iran equals to 50% of this sea. Is Iran’s share stipulated in those treaties?

Nader Entessar

No.  Neither the 1921 nor the 1940 treaties specify that Iran and the USSR each share 50 per cent ownership of the Caspian Sea.  Both of these treaties talk in general terms about the resources of the Caspian Sea being the used by Iran and the USSR without stipulating the exact ownership of the seabed, boundary delimitation, and other related issues.  We have to remember that these two treaties were signed well before the United Nations Convention on the Law of the Sea (UNCLOS) was drafted and came into force.  Therefore, the 1921 and 1940 treaties could not have foreseen the complex issues of maritime boundaries that were discussed in UNCLOS.

Based on the international law, what is the legal status of the Caspian Sea after the collapse of the USSR and the sharing of the Caspian Sea by the five littoral states? Some bring about the idea of 20% sharing? Is there any base for this idea in the international law? 

The answer to this question depends on if the Caspian is defined as a “sea” or a “lake.”  If one classifies the Caspian as a lake, then according to international law its resources should be divided equally among the five riparian states.  However, if the Caspian is designated as a sea, then the five littoral states should draw lines extending from their shores to the midway point with littoral neighbors.  This explains why for many years Iran had insisted on defining the Caspian as a lake.  However, it appears that the five littoral states agreed in Aktau that the Caspian is a sea.  That is why some observers have argued that in the final delimitation agreement, Iran will end up getting not only about 13 per cent of the Caspian but also the saltiest and deepest part of it.

Is the share of each of the littoral states from the Caspian Sea defined in the convention signed on August 12 in Kazakhstan?

No, the text of the Caspian Sea Treaty signed on August 12, 2018 in Kazakhstan does not define the share of each of the littoral states.  In so far as Iran is concerned, this issue will have to be determined in a future agreement with Azerbaijan and Turkmenistan.  Iran has to be very careful in future negotiations with its two neighbors because the resulting boundary agreement will determine Iran’s final Caspian share.

What is the main achievement of the Aktau Convention, signed on August 12 in Kazakhstan, in regards to the legal regime and status of the Caspian Sea?

Although some reports have referred to the Caspian Sea Convention as a “landmark agreement,” I don’t view this agreement as such.  Its main achievement was that after more than 20 years of contentious diplomatic efforts, the five littoral states of the Caspian Sea finally agreed on a legal framework for sharing the resources of this significant body of water.  There are some clear and specific agreements in the Convention.  For example, all five littoral states agreed to 15 miles of sovereign waters, plus a further 10 nautical miles of fishing area.  But the wording of the Convention remains vague in many parts of the document, thus delaying divisive decisions that have to be made in future negotiations.

First published in our partner MNA

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International Law

Fifty Years of NPT: Weaknesses over the course

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NPT is a landmark treaty that lies at the heart of non-proliferation regime (NPR). In July 2018, Fiftieth anniversary of the NPT has been celebrated. Theoretically, NPT is committed to the goal of arms control and aims to accomplish the nuclear disarmament. For this purpose, the NPT member states are devoted to pursue three key objectives of the treaty: prevent horizontal proliferation, state’s right to use nuclear energy for peaceful objectives, and nuclear disarmament. However practically due to shifting US’ alliances, major power politics, and growing arms race, the fifty years of NPT has only delivered “Distress, Conflict and discrimination”.

Loopholes and weaknesses exist in NPT which are being misused by Nuclear Weapon States (NWS) and Non-Nuclear Weapons States (NNWS) of the treaty. Despite the NPT’s presence for 50 years and an expansion in its membership, atomic weapons have not been wiped out from the world. All the NWS aim to maintain their nuclear weapon state status due to their security or strategic concerns. Despite the dialogues of arms control, all major and smaller nuclear weapon states are committed to maintaining credible deterrence and strategic balance. Such aspirations of NWS demonstrate that major powers party to the arms control and disarmament treaty are merely the silent spectators to the existing weakened structure of the so called universal treaty of 191 member states due to their own vested interests.

The fifty years of NPT have reaffirmed that the universal mechanism to fight with nuclear proliferation and achieving the objective of disarmament is not adequate for two reasons: first, the international mechanism of non-proliferation has failed to deal with the few potential proliferators; secondly, strategic and security concerns of NWS and NNWS has undermined the Articles I, II, IV, VI and X of the treaty. In spite of the fact that until the 1980s worldwide measures to counteract atomic multiplication were generally more effective, yet in the subsequent years the NPT was not much successful to counter the aspirants of nuclear capability such as North Korea, Iran, Libya and Syria. Due to inadequate mechanism and weaknesses of the treaty, now nine states possess nuclear weapon capability and approximately 30 states have the technical ability to acquire it that is viewed as serious threat to the NPT.

Despite the potentials of non-proliferation, since 1968 with participation of 191 states and various agreements and talks, an efficient and effective regime stresses on pin pointing the weaknesses and restructuring, re-evaluation and reformation of the treaty structure.  The key setback to the NPT is that the articles of the treaty are not fairly adopted by the member states due to which the regime has failed to address the significant objectives of horizontal proliferation, arms control and disarmament. For instance under Article I of the treaty, transfer of nuclear material and technology by NWS to NNWS is prohibited. But treaty has failed to address the transfer of fissile material and nuclear technology from one NWS to another NWS. Such dynamic have increased the insecurities of NNWS and resultantly forces them to take extreme measures to ensure their security .e.g. North Korea. Simultaneously, despite being the member of the treaty, the US has been providing nuclear related technology to India since 1990s under the umbrella of various bilateral treaties or agreements. India-US nuclear agreement and granting of NSG waiver to India is viewed as an intentional measure to help India increase its military buildup to carry forward strategic ambitions of the US in the Asian region.

Furthermore, the US agreement with India for joint production and development of  military related technology such as mini UAVs , distinctive kits for C130 and designing/ development of jet engine technology has played central role in speedy development of India’s nuclear program. Such development is not only the violation of NPT by the US but also compels the NNWS to acquire nuclear capability to address their security concerns.  Right of all states to use nuclear energy for peaceful objectives played key role as bargaining chip and is viewed as major loophole in the treaty due to technical similarities in peaceful use of nuclear technology and technology for military purposes. North Korea Withdrew from the NPT in 2003.Article X of the treaty provides the right to member states to withdraw from the treaty if their sovereignty is on stake. However not accepting the states’ right to withdraw from the treaty is denial of their right of self defence and violation of treaty. Therefore, discriminatory attitude, special treatment and country specific treatment pose serious question mark on the implementation and standards of NPR.It demonstrates that the regime is just an instrument of major powers to fulfill their strategic and foreign policy objectives.

The current doctrines of NWS comprise of elements warfare, which shows hegemonic mindsets of major powers and explains their reluctance to give up on their “nuclear assets”. These factors have posed negative impact on the process of non-proliferation and disarmament. Therefore it can be inferred that the above mentioned scenarios have played central role in keeping Pakistan away from joining the NPR. If NPT states want to attract non-NPT states for the membership of regime then the current member states will have to pursue non-discriminatory approach towards non-proliferation themselves.

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