Chapter-4 Work of International Institutional Institutions/Organization in The Field of E-Commerc

CHAPTER-4
Work of International Institutional Institutions/Organization in the

Field of E-Commerce
Majority of the companies have implemented their presence on the web. Many of the companies
also decided use the web for its capability to go worldwide with their message and product. The
global nature of the web may prohibit them from making the big move in the international e-
commerce.1Although policymakers in general have not been quick to recognize the potential and
inevitability of electronic commerce, certain legislators, regulatory agencies and domestic and
international trade and legal organizations have increasingly focused attention on electronic
commerce law. Much of their efforts in the proposal or draft stage, but the trend is encouraging.
On a global scale, the most significant effort to address legal issues relevant to electronic
commerce has been the UN Model Law on Electronic Commerce.2
United Nations Level
The United Nations Commission on International Trade Law (UNCITRAL) has completed work
on a model law that supports the commercial use of international contracts in electronic
commerce. This model law establishes rules and norms that validate and recognize contracts
formed through electronic means, sets default rules for contract formation and governance of
electronic contract performance, defines the characteristics of a valid electronic writing and an
original document, provides for the acceptability of electronic signatures for legal and
commercial purposes, and supports the admission of computer evidence. The following
principles should, to the extent possible, guide the drafting of rules governing global electronic
commerce:
(i) Parties should be free to order the contractual relationship between themselves as they
see fit,
1C.S.V. Murthy, E-COMMERCE, Concept, Models, Strategies 62 (Himalaya Publishing House,

Mumbai, 2007).
2ParagDiwan and Sunil Sharma, Electronic Commerce 236 (Vanity Books International, New
Delhi, 2000).
(ii) Rules should be technology-neutral and forward looking,
(iii) Existing rules should be modified and new rules should be adopted only as necessary
or substantially desirable to support the use of electronic technologies, and
(iv) The process should involve the high-tech commercial sector as well as business that
have not yet moved online.3
UNCITRAL and the International Chamber of Commerce (ICC), and others should
develop additional model provisions and uniform fundamental principles designed to eliminate
administrative and regulatory barriers and to facilitate electronic commerce by:
(i) Encouraging government recognition, acceptance and facilitation of electronic

communications,
(ii) Encouraging consistent international rules to support the acceptance of electronic

signatures and other authentication procedures, and
(iii) Promoting the development of adequate, efficient, and effective alternate dispute
resolution mechanism for global commercial transaction. Finally the development of
global electronic commerce provides an opportunity to create legal rules that allow
business and consumers to take advantage of new technology to streamline and
automate functions.4
At the international level, the UN has adopted the Model Interchange Agreement for the
International Commercial Use of Electronic Data Interchange, which applies to the
interchange of data and not to the underlying commercial contracts between the parties. It
addresses the need for uniformity of agreements so that there are not barriers to international
trade on account of different solutions for various problems being adopted by countries. The
UN has recommended that the member countries should take into account the terms and
3 V.K. Jain and Hemlata, Enterprise Electronic and Mobile Commerce605 (Cyber-Tech
Publications, New Delhi. 1stedn., 2001).
4 Ibid.
provisions of the Model Interchange Agreement when framing their own laws on e-
commerce.5
The UNCITRAL Model E-Commerce Act that was developed by the United Nations with the
aim of encouraging nation to adopt a similar law for providing recognition to e-transactions. The
UN Model Law has defined the basic concepts of electronic message, electronic signatures,
originator and recipient of electronic messages so as to ensure the acceptance of signed
electronic messages.6 UNCITRAL has proposed a model law for e-commerce covering the major
concerns: legal recognition of data messages, writing, original signatures, admissibility and
evidential weight of data messages, retention of data messages, formulation and validity of
contracts, recognition of parties by data messages, attribution of data messages,
acknowledgement of receipt, time and place of dispatch and receipt of data messages.7
4.1.1 UNCITRAL Model Law on Electronic Commerce 1996
The United Nations Commissions on International Trade Law (UNCITRAL) created a model law
that supports the commercial use of international contracts in electronic commerce. This model
law establishes rules and norms that validate and recognize contracts formed through electronic
means. It also sets default rules for contract formation and governance of electronic contract
commerce and defines the characteristics of valid electronic document and original document.
Because electronic signatures are key to the completion of e-commerce-based business
transactions, the law provides for the acceptability of electronic signatures for legal and
commercial purposes and supports the admission of computer evidence in courts and arbitration
proceedings.8
The development of e-commerce and internationally acceptable of legal uniformity, the United
Nations Commission on International Trade Law (UNCITRAL) established by the General
Assembly adopted the model law of Electronic Commerce in 1996. It sought to facilitate the use
5Kamlesh K. Bajaj and Debjani Nag, E-Commerce The Cutting Edge of Business 240 (Tata
McGraw-Hill Publishing Company Limited, New Delhi, 2ndedn., 2006).
6Id at 302.
7Id at 303.
8Charles Trepper, E-Commerce Strategies65 (Prentice-Hall of India, New Delhi, 2001).
of electronic data interchange, e-mail, or controlled by the appropriate government in the
electronic form as may be prescribed by the government.9
It is worth observing here that UNCITRAL is still grappling with the issue of creation of a model
online contract law. A working group has held a number of meetings in an effort to finalize the
UNCITRAL E-Contracting Law. The draft convention which has been on the agenda of the E-
Commerce Working Group essentially includes the following provisions:
(i) Dealing with the sphere of application of the instrument concerning the formation of
contracts,
(ii) Dealing with specific rights and obligations of the parties in the context of contract
formation by electronic means. Legal issues are manifold. Whether the issue is EDI over
networks, or e-commerce over the Internet, the primary concern of users is the existence
and enforceability of appropriate laws for e-commerce.10
The objective of the Model Law is to enable the legislation that would provide equal treatment to
those using paper-based documentation and computer-based information that would eliminate a
major barrier to use the of electronic means in doing business. The Model Law provides for legal
recognition of data messages, signature in relation to data messages, admissibility and evidential
weight of data messages, retention of data messages, communication of data messages, which
includes formation and validity of contracts.11
The Model Law Electronic Commerce was the first legislative text to adopt the fundamental
principles of non-discrimination, technological neutrality and functional equivalence that are
widely regarded as the founding elements of modern electronic commerce law. The principle of
non-discrimination ensures that a document would not be denied legal effect, validity or
enforceability solely on the grounds that it is in electronic form. The principle of technological
neutrality mandates the adoption of provisions that are neutral with respect to technology used.
In light of the rapid technological advances, neutral rules aim at accommodating any future
9S.B. Verma, R.K. Shrivastava, al., ed., Dynamics of Electronic Commerce(M.Sarngadharan and LeebaBabu, E-
Commerce in India-Legal Framework and Problems) 31 (Deep & Deep Publications Pvt. Ltd., New Delhi. 2007).
10Supra note 5 at 248.

11T. Ramappa, Legal Issues in Electronic Commerce 103 (Macmillan India ltd., New Delhi,
2003)
development without further legislative work.12The use of modern technology means of
communication such as electronic mail and electronic data interchange for the conduct of
international trade transactions has been increasing rapidly and is expected to develop further as
technical supports such as information highways and the INTERNET become more widely
accessible. However, the communication of legally significant information in the form of
paperless messages may be hindered by legal obstacles to the use of such messages, or by
uncertainty as to their legal effect or validity. The purpose of the Model Law is to offer national
legislators a set of internationally acceptable rules as to how a number of such legal obstacles
may be removed, and how a more secure legal environment may be removed, and how a more
secure legal environment may be created for what has become known as electronic
commerce.13
The decision by UNCITRAL to formulate model legislation on electronic commerce was taken
in response in response to the fact that in a number of countries the existing legislation governing
communication and storage of information is inadequate or outdated because it does not
contemplate the use of electronic commerce. In certain cases, existing legislation imposes or
implies restrictions on the use of written signed or original documents. While a few
countries have adopted specific provisions to deal with certain aspects of electronic commerce,
there exists no legislation dealing with electronic commerce as whole.14
The Guide of the Model Law clarifies that it is only a framework law and is not intended to
cover every aspect of the use of electronic commerce. An understanding of paragraph 14 of the
guide would show what further work through international conventions and domestic legislation
is necessary. It should be noted that the techniques for recording and communicating information
considered in the Model Law, beyond raising the matters of procedure that may need to be
addressed in the implementing technical regulations, may raise certain legal questions the
answers to which will not necessarily be found in the Model Law, but rather in other bodies of
12Ibid.
13UNCITRAL Model Law on Electronic Commerce with Guide to Enactment (1996) 16
(UNITED NATIONS New York, 1999).
14Ibid.
law. Such other bodies of law may include, for example, the applicable administrative, contract,
criminal and judicial-procedure law, which the Model Law is not intended to deal with.15
Article 1(b)Electronic data interchange EDI means the electronic transfer from computer to
computer information using an agreed standard to structure the information.16
Article 5 of the Model Law17 states the position on the legal recognition of data messages.
Information shall not be denied legal effect, validity or enforceability solely on the grounds that
it is in the form of a data message.18
The Model Law recognizes various reasons for which national law require the use of writing.
However, it states that the Model Law has proceeded on the premise that for the limited purpose
of recognizing electronic records in commerce it would enough that the focus is upon the basic
notion information being capable of being reproduced and read without emphasizing the specific
functions of writing, for example the evidentiary function. This would mean that any electronic
record that can be retrieved for subsequent reference would be recognized, which would amount
to stating that it would be treated in the same way as a document in writing.19
Article 7 of the Model Law20relating to signature in electronic environment is drafted so as to
confine it only to basic functions of a signature, viz., identification of the author of a document
and confirmation of the authors approval of the content of that document.21
Article 8 of the Model Law22 provides that where it is legal requirement information is presented
or retained in its original form, a data message satisfying the conditions set out in (1) (a) and (1)
(b) meets that requirement, viz., being the original. However, contracting parties in business
ought to note that it is in their own commercial interests to ensure, whether integrity of
information in an electronic record is a matter of legal compulsion or not, that they use such
15Supra note 11.
16Article 1 (b) of UNCITRAL Model Law on Electronic Commerce 1996.
17Article 5 of UNCITRAL Model Law on Electronic Commerce 1996.
19Supra note 11 at 105-106.
systems of transmission ensure that the electronic records exchanged between them remain
unaltered from dispatch to receipt.23
Article 11 of the Model Law24 provides that an offer and an acceptance of an offer may be made
through means of data messages and that a data message used in the formation of a contract shall
not be denied validity or enforceability on the sole ground that a data message was used for that
purpose. In the first place, it should be noted that this would be the position, unless otherwise
agreed by the parties. Even if they agree to make use of this provision, the legal incidents of a
contract, viz., the rights and obligations of the parties, are determined by some other law and
where the parties do not specify which law would govern their contract, the nature of the
transaction or the rules of private international law would determine the applicable law, which
would determine these rights and obligations. 25Existing rules on the formation of contracts with
provisions contained in Article 15 is designed to dispel uncertainly as to the time and place of
information of contracts in cases where the offer or the acceptance are exchanged
electronically.The adoption of a specific set of rules dealing with specific uses of electronic
commerce, such as the use of EDI messages as substitutes for transport documents does not
imply that other provisions of the Model Law are not applicable to such documents. In
particular, the provisions of part two, such as Article 16 and 17 concerning transfer of rights in
goods, purpose that guarantees of reliability and authenticity contained in articles 6 to 8 of the
Model Law are also applicable to electronic equivalents to transport documents.26
In preparing the Model Law, the Commission noted that the carriage of goods was the context in
which electronic in which electronic communications were most likely to be used and in which a
legal framework facilitating the use of such communications was most urgently needed. Articles
16 and 17 contain provisions that apply equally to non-negotiable transport documents and to
transfer of rights in goods by way of transferable bills of lading. The principles embodied in

Articles 16 and 17 are applicable not only to maritime transport but also to transport of goods by
other means, such as road, railroad and air transport.27
Article 1628is of an illustrative nature and, although the actions mentioned therein are more
common in maritime trade, they are not exclusive to such type of trade and could be performed
in connection with air transport or multimodal carriage of goods.29
Article 17 of the Model Law30 merely reflect the fact that, in the context of transfer of rights
through data messages, some of the functions traditionally performed through the single
transmission of a paper bill of lading would necessarily imply the transmission of more than one
data message and that such a fact, in itself, should entail no negative consequence as to the
acceptability of electronic commerce in that area.31
The Model Law resolution recommended that all the member states should favorably consider
the Model Law, while enacting their own laws-to promote uniformity in laws-that are applicable
to alternatives of the paper based method of communication and in the storage of business
transaction information.32 A product of the UN Commission on International Trade Law
(UNCITRAL), the Model Law is intended to advance the legal standing of electronic commerce
by removing barriers to computer-based trade. Because no jurisdiction to date has adopted the
Model Law as its own law, the Model Law is not binding upon any party to electronic commerce
(unless its terms are specifically incorporated by reference in a trading partner agreement or
other contract).33
4.1.2 UNICITRAL MODEL Law on Electronic Signatures 2001
In order to make electronic transactions and contracts more convenient and secure, countries
around the world are adopting and legalizing digital signatures or e-signatures. The legalization
27Ibid.
32Bharat Bhaskar, Electronic Commerce, Frame Work, Technologies and Application 84 (Tata McGraw-Hill
Publishing Company Limited, New Delhi, 2003)

of digital signatures involves providing a digitally signed electronic document the same status as
a signed paper document in the eyes of the law. The United Nations Commission on International
Trade Law (UNCITRAL) is trying to build uniform legislation regarding the acceptance of
electronic signatures in the member countries. Other international organization like the OECD
and the WTO are also working towards achieving international uniformity in legal standards
concerning electronic signatures.34
UNCITRAL, as its thirty-fourth session (25 June to July 2001 at Vienna) adopted the
UNCITRAL Model Law on Electronic Signatures with Guide to enactment 2001. The guide is
intended to assist those engaged in enacting a law on electronic signatures. 35The Modern Law
Electronic Signature is based on the fundamental principles common to all UNCITRAL texts
relating to electronic commerce, namely non-discrimination, technological neutrality and
functional equivalence. The Model Law Electronic Signature establishes criteria of technical
reliability for the equivalence between electronic and hand-written signatures as well as basic
rules of conduct that may serve as guidelines for assessing duties and liabilities for the signatory,
the relying party and trusted third parties intervening in the signature process. Finally, the Model
Law Electronic Signature contains provisions favoring the recognition of foreign certificates and
electronic signatures based on a principle of substantive equivalence that disregards the place of
origin of the foreign signature.36
The Modern Law on Electronic Signatures 2001 states that uniform rules relating to electronic
signatures across countries would conduce to international commerce through the electronic
medium where legal harmony as well as technical interoperability is a desirable objective. Of
equal importance as the need to keep legislation covering electronic commerce media-neutral, a
principle recognized in the UNCITRAL Model Law on Electronic Commerce, and in this Law, is
technology-neutrality in the law relating to electronic signatures. States that would be enacting
a law on electronic signatures are advised to provide for this. This means that there would be no
discrimination, in the matter of recognition in law, among various methods of creating electronic
signatures. Those enacting the new law on electronic signatures are also advised:
34Rajesh Chakrabarti and VikasKardile, The Asian Managers Handbook of E-Commerce 201
(Tata Mcgraw-Hill Publishing Company Limited, New Delhi, 2002).
36Ibid.
(i) To ensure non-discrimination between domestic and foreign electronic signatures and
certificates;
(ii) Provide for party autonomy in deciding on acceptable modes of creating electronic
signatures in transactions between them, subject to its not violating any law; and
(iii) Recognize the international origin of the Model Law. To achieve the desired level of
harmonization of the law relating to electronic signatures, the recommendation is, to
adhere as much as possible to the uniform text in order to make the national law as
transparent and familiar as possible to the uniform text in order to make the national
law as transparent and familiar as possible for foreign users of the national law.37
Article 2 of the UNCITRAL Model Law on Electronic (2001) defined the Electronic Signature 38,
Certificate39, and Data message40, Signatory41, Certification Service Provider42 and Relying
Party43.
Article 3 of the UNCITRAL Model Law on Electronic (2001)44 the material provisions of this
Model Law deal with equal treatment of electronic signature technology.45

38 Article 2(a) Electronic Signature means data in electronic from in, affixed to or logically
associated with, a data message, which may be used to identify the signatory in relation to the
data message and to indicate the signatorys approval of the information contained in the data
message.
39Article 2(b) Certificate means a data message or other record confirming the link between a
signatory and signature creation data.
40 Article 2(c) Data message means information generated, sent, received or stored by
electronic, optical or similar means including, but not limited to, electronic data interchange
(EDI),electronic mail, telegram, telex or telecopy.
41 Article 2 (d) Signatory means a person that holds signature creation data and acts either on
its own behalf or on behalf of the person it represents.
42 Article 2 (e) Certification service provider means a person that issues certificates and may
provide other service related to electronic signature.
43 Article 2(f) Relying party means a person that may act on the basis of a certificate or an
electronic signature.
44Article 3of the UNCITRAL Model Law on Electronic Signature (2001).
Article 646 places emphasis on the technical reliability of an electronic signature for the purpose
of affording legal recognition to it and would be necessary to establish that technical reliability. It
should be noted that the article does not make any reference to any particular technology in the
creation of an electronic signature. As long as the electronic signatures meets the requirements of
Article 6(1) and conforms to the tests of reliability set out in Article 6(3), whatever the
technology used in the creation of an electronic signature, it should be the end of the matter as
far the issue of recognition of that electronic signature as a signature for legal requirements is
concerned.47
Article 748 may be statements of accepted technical, legal or commercial practices, whether
developed by the public or private sector (or both), of a normative or interpretative nature, which
are generally accepted as applicable internationally.49
Article 850 the extent of care to be exercised by a signatory using an electronic signature before
he may be able to avail of the recognition of electronic signatures is set out in these paragraphs.51
Article 952 the certification service provider is expected to exercise reasonable care to ensure the
accuracy and completeness of all material representations it makes in connection with a
certificate. In the certificate, the supplier should provide essential information allowing the
relying party to identify the supplier.53
Article 1054 defines the trustworthiness includes financial, human resources, assets, quality
hardware, software systems, processing of certificates, retention of records, regularity and extent
of audit by an independent body etc.

Article 1155 defines the reliability of an electronic signature, supported certificate, verify the
validity, suspension, revocation certification and observe any limitation with respect to the
certificate.
Article 1256 the promotion of electronic commerce across continents may be impeded if
countries refuse to recognize certificates issued abroad or electronic signatures created overseas.
That such certificates and signatures meeting accepted technical standards, offering a
substantially equivalent level of reliability as that of the enacting country would have the same
legal effect as those created in the enacting State.57
Purpose and Origin of the Model
The increased use of electronic authentication techniques as substitutes for handwritten
signatures and other traditional authentication procedures has suggested the need for a specific
legal framework to reduce uncertainty as to the legal effect that may result from the use of such
modern techniques (which may be referred to generally as electronic signatures). The risk that
diverging legislative approach be taken in various countries with respect to electronic signatures
calls for uniform legislative provisions to establish the basic rules of what is inherently an
international phenomenon, where legal harmony as well as technical interoperability is a
desirable objective.58
The objectives of the Model Law, which include enabling or facilitating the use of electronic
signatures and providing equal treatment to users of paper-based documentation and users of
computer-based information, are essential for fostering economy and efficiency in international
trade. By incorporating the procedures prescribed in the Model Law (and also the provisions of
the UNCITRAL Model Law on Electronic Commerce) in its national legislation for those
situations where parties opt to use electronic means of communication, an enacting State would
appropriately create a media-neutral environment. The media-neutral approach also used in the
UNCITRAL Model Law on Electronic Commerce is intended to provide in principle for the
coverage of all factual situations where information is generated, stored or communicated,
55Article 11 of the UNCITRAL Model Law on Electronic Signature (2001).
56Ibid.
58UNCITRAL Model Law on Electronic Signatures with Guide to Enactment (2001) 8
(UNITED NATIONS New York).
irrespective of the medium on which such information may be affixed. The words a media-
neutral environment, as used in the UNCITRAL Model Law on Electronic Commerce, reflect
the principle of non-discrimination communicated or stored electronically. The new Model Law
equally reflects the principle that no discrimination should be made among the various
techniques that may be used to communicate or store information electronically, a principle that
is often referred to as technology neutrality.59
Various States and other jurisdiction have moved to give legal effect to electronic documents
through digital signature legislation. Some States have enacted bills granting electronic
signatures and electronic communications legal validity as signatures and writings, although it is
unclear how effective such measures will be unless such electronic signatures provide at 60 least
similar levels of assurances regarding security, authentication, non-repudiation and other issues
as those provided by digital signatures. Various other State have enacted legislation giving a
communication that employs a digital signature of the same legal validity as if it had been
written on paper, detailing provisions regarding certification authorities, public-key
infrastructure and apportionment of liability thereof.61
4.1.3 United Nations Convention on the Use of Electronic Communications in International
Contracts 2005
Increasingly, courts around the world are accepting online and e-mail communications and
promises therein at the same footing as signed paper documents with equally binding obligations.
E-mail communication is regularly being produced in courts (mostly in the USA) as admissible
evidence and consequently, their legal validity is increasing every day. However, what kind of
electronic communication, particularly in the public forum (as opposed to one-one e-private, e-
mail, communication), constitutes a valid contractual obligation would differ significantly from
country to country and even from court to court.62
The United Nations Conventions on the Use of Electronic Communications in
International Contracts was prepared by the United Nations Commission on International Trade
59Id 9.
61Id at 239.
62Rajesh Chakrabarti and VikasKardile, The Asian Managers Handbook of E-Commerce 200
(Tata Mcgraw-Hill Publishing Company Limited, New Delhi, 2002).
Law (UNCITRAL) between 2002 and 2005. The General Assembly adopted the Convention on
23 November 2005 by its resolution 60/21 and the Secretary General opened it for signature on
16 January 2016.63 The purpose of the Electronic Communications Convention is to offer
practical solution for issues related to the use of electronic means communication in connect with
international contracts. The Convention is not intended to establish uniform rules for substantive
contractual issues that are not specifically related to the use of electronic communications.
However, a strict separation between technology-related and substantive issues, in the context of
electronic commerce is not always feasible or desirable. Therefore, the Convention contains a
few substantive rules that extend beyond merely reaffirming the principle of functional
equivalence where substantive rules are needed in order to ensure the effectiveness of electronic
communications.64
(Article 1and 2)The Electronic Communications Convention applies to the use of electronic
communications in connection with the formation or performance of a contract between parties
whose place of business are in different States. Electronic communication includes any
statement, declaration, demand, notice or request, including an offer and the acceptance of an
offer, made by electronic, magnetic, optical or similar means in connection with the formation or
performance of a contract. The word contract in the convention is used in a broad way and
includes, for example, arbitration agreements and other legally binding agreements whether or
not they are usually called contracts.65
The conventional applies to international contracts, that is, contracts between parties located in
two different States, but it is not necessary for both of those States to be contracting States of the
Convention. However, the Convention only applies when the law of a contacting State is the law
applicable to the dealing between the parties, which is to be determined by the rules on private
international law of the Forum State, if the parties have not validity chosen the applicable law.66
Article 6 and 7 (Location of the parties and information requirements)
63United Nations Convention on the Use of Electronic Communications in International

Contracts (2005)13.
64Ibid.
65Idat 14.
66Ibid.
The Electronic Communications Convention contains a set of rules dealing with the location of
the parties. The Convention does not contemplate a duty for the parties to disclose their places of
business, but establishes a certain number of presumptions and default rules aimed at facilitating
a determination of a partys location. It attributes primary-albeit not absolute-importance to
partys indication of its relevant place of business.67
The convention takes a cautious approach to peripheral information related to electronic
messages, such as Internet Protocol addresses, domain names or the geographic location of
information systems which despite their apparent objectivity have little, if any, conclusive value
for determining the physical location of the parties.68
Treatment of contracts (Articles 8, 11, 12 and 13)

The Electronic Communications Convention affirms in Article 8 the principle contained in
article 11 of the UNCITRAL Model Law on Electronic Commerce that contracts should not be
denied validity or enforceability solely because they result from the exchange of electronic
communications. The Convention does not venture into determining when offers acceptances of
offers become effective for purpose of contract formation.69Article 12 of the Convention
Recognizes that contracts may be formed as a result of actions by automated message systems,
even if no natural person reviewed each of the individual action carried out by the systems or the
resulting contract. However, Article 11 clarifies that mere fact that a party offers interactive
applications for the placement of orders-whether or not its system is fully automated-does not
create a presumption that the party intended to be bound by the orders placed through the
system.70
Consistently with the decision to avoid establishing a duality of regimes for electronic and paper-
based transactions, and consistent with the facilitative-rather than regulatory-approach of the
Convention, Article 13 defers to domestic law on matters such as any obligations that the parties
67Ibid.
68Idat 15.
69 Ibid.
70Ibid.
might have to make contractual terms available in a particular manner. However, the Convention
deals with the substantive issue of input errors in electronic communications in view of the
potentially higher risk of mistakes being made in real-time or nearly instantaneous transactions
entered into by natural person communicating with an automated message system. Article 14
provides that a party who makes an input error may withdraw the part of the communication in
question under circumstances.71
Form Requirements Article 9
It should be noted that Article 9 establishes minimum standards to meet form requirements that
may exist under the applicable law. Generally, it was understood that party autonomy did not
mean that Electronic Communications Convention empowered that parties to set aside statutory
requirements on form or authentication of contracts and transactions.72
Time and place of dispatch and receipt of electronic communications (Article 10)
As is the case under Article 15 of the UNCITRAL Model Law on Electronic Commerce, the
Electronic Communications Convention contains a set of default rules on time and place of
dispatch and receipt of electronic communications, which are intended to supplement national
rules on dispatch and receipt by transposing them to an electronic environment. The differences
in wording between Article 10 of the Convention and Article 15 of the Model Law are not
intended to produce a different practical result, but rather are aimed at facilitating the operation
of the Convention in various legal systems, by aligning the formulation of the relevant rules with
general elements commonly used to define dispatch and receipt under domestic law.73
Under the Convention, dispatch occurs when an electronic communication leaves an
information system under the control of the originator, whereas receipt occurs when an
electronic communication becomes capable of being retrieved by the addressee, which is
presumed to happen when the electronic communication reaches the addressees electronic
address. The Convention distinguishes between deliveries of communications to specifically
71Ibid.
72Idat 16.
73Ibid.
designate. In the first case, a communication to specifically designated electronic addresses and
delivery of communication is received when it reaches the addressees electronic address. For all
cases where the communication is not delivered to designate electronic address, receipt under the
Convention only occurs when (a) the electronic communication becomes capable of being
retrieved by the addressee, and (b) the addressee actually becomes aware that the communication
was sent to that particular address.74
Relationship to other international instruments (Article 20)
UNCITRAL hopes that States may find the Electronic Communications Convention useful to
facilitate the operation of other international instruments particularly trade-related ones. Articles
20 intends to offer a possible common solution for some of the legal obstacles to electronic
commerce under existing international instruments in a manner that obviates the need for
amending individual international conventions. In addition to those instruments which, for the
avoidance of doubt, are listed in paragraph 1 of article 20, the provisions of the Convention may
also apply, pursuant to paragraph 2 of article 20, to electronic communications exchanged in
connection with contracts covered by other international Convention has been added to take into
account possible concerns of States that may wish to ascertain first whether the Convention
would be compatible with their existing international obligations.75
Paragraph 3 and 4 of article 20 offer further flexibility by allowing States to add specific
conventions to the list of international instruments to which they would apply the provisions of
the Convention-even if the State has submitted a general declaration under paragraph 2-or to
exclude certain specific conventions identified in their declarations. It should be noted that
declarations under paragraph 4 of this article would exclude the application of the Convention to
use of electronic communications in respect of all contracts to which another international
convention applies.76
Essential objective of the Convention
The essential objective of the Convention is reflected in the fourth paragraph of the Preamble
that is, to establish uniform rules intended to remove obstacles to use of electronic
74Ibid.
75Idat 17.
76Ibid.
communications in international contracts, including obstacles that might result from the
operation of existing international trade law instruments, with a view to enhancing legal certainty
and commercial predictability.77
Scope of Application
The primary purpose of Electronic Communications Convention is to facilitate international
trade by removing possible legal obstacles or uncertainties concerning the use of electronic
communications in connection with the formation or performance of contracts conclude between
parties located in different countries. However, the Convention does not deal with substantive
law issues related to the formation of contracts or with the rights and obligations of the parties to
a contract concluded by electronic means. By and large, international contracts are subject to
domestic law, except for the very few types of contract to which a uniform law applies, such as
sales contracts falling under the United Nations Sales Convention. In preparing the Electronic
Communication Convention, UNCITRAL therefore was mindful of the need to avoid creating a
duality of regimes for contract formation: a uniform regime for electronic contracts under the
new Convention and a different, not harmonizes regime, for contract formation by any other
means.78
4.1.4 Promoting Confidence in Electronic Commerce: Legal Issue in International Use of

Electronic Authentication and Signature Methods 2007
Information and computer technology have developed various means for linking information
in electronic form to particular persons or entities, for ensuring the integrity of such information
or for enabling persons or demonstrate their entitlement or authorization to obtain access to a
certain service or repository of information. These functions are sometimes referred to
generically either as electronic authentication or electronic signature methods. Sometimes,
however, distinctions are made between electronic authentication and electronic signature.
The use of terminology is not only inconsistent, but is to some extent misleading. In paper-based
environment the words authentication and signature and the related actions of
authenticating and signing do not have exactly the same connotation in different legal
77Idat 26.
78Idat 28.
systems and have functionalities that may not necessarily correspond to the purpose and function
of the so-called electronic authentication and signature methods.79
The term electronic authentication and electronic signature are used to refer to various
techniques currently available on the market or still under development for the purpose of
replicating in an electronic environment some or all of the functions identified as characteristic
of handwritten signatures or other traditional authentication methods. Electronic authentication
and signature methods may be classified in three categories: those based on the knowledge of the
user or the recipient (e.g. password, personal identification numbers, PINs), those based on the
physical features of the user (e.g. biometrics) and those based on the possession of an object by
the user (e.g. codes or other information stored on a magnetic card). Technology currently in use
includes digital signatures within a public key infrastructure, biometric devices, PINs, user-
defined or assigned passwords, scanned handwritten signatures, signature by means of a digital
pen, and clickable OK or I accept boxes.80 Main methods of electronic signature and
authentication will be discussed: digital signature; biometric methods; passwords and hybrid
methods and scanned or typed signatures.
Digital Signature is a name for technological application using asymmetric cryptography,
also referred to as public key encryption systems, to ensure the authenticity of electronic
messages and guarantee the integrity of the contents of these messages. The digital signature has
many different appearances, such as fail stop digital signatures, blind signatures and undeniable
digital signatures.81
Biometrics is a measurement used to identify an individual through his or her intrinsic
physical or behavioral traits, traits that may be used for recognition in biometrics include DNA;
fingerprints; iris, retina, hand or facial geometry; facial thermo gram; ear shape; voice; body
odor; blood vessel patterns; handwriting; gait; and typing patterns.82
Passwords and Hybrid Methods passwords and codes are used both for controlling access to
information or services and for signing electronic communications. In practice, the latter use is
79Promoting Confidence in Electronic Commerce: Legal Issue on International Use of
Electronic Authentication and Signature Methods 1(UNITED NATIONS Vienna, 2009).
80Idat 13.
81Id at 17.
82Idat 27.
less frequent than the former, because of the risk of compromising the code if it is transmitted in
non-encrypted messages. Passwords and codes are however the most widely used method of
authentication for purposes of access control and identity verification a broad range of
transactions, including most Internet banking transactions, cash withdrawals at automated teller
machines and consumer credit card transactions.83
Scanned Signatures and Typed Names the main reasons for legislative interest in electronic
commerce in the private law area has been concern about how new technologies may affect the
application of rules of law that were conceived for other media. This attention to technology has
often led, deliberately or not, to a focus on sophisticated technologies that offer a higher level of
security for electronic authentication and signature methods.84
Electronic Identity Management in the electronic world, natural or legal persons may
access the services of a number of providers. Every time a person registers with a service
provider to access its services, an electronic identity is crated. Moreover, a single identity may
be linked to a number of accounts for each application or platform. The multiplication of
identities and of their accounts may hinder their management both for the user and for the service
provider.85
Legal treatment of electronic authentication and signatures: A significant volume of
electronic commercial transactions is performed in closed networks, that is, group with a limited
number of participants accessible only to previously authorized persons or companies. Closed
networks support the operation of a single entity or an existing closed user group, such as
financial institutions participating in the interbank payment system, securities and commodities
exchanges, or an association of airlines and travel agents, in these cases, participation in the
network is typically restricted to institutions and companies previously admitted to the group.
Most of these networks have been in place for several decades, use sophisticated technology and
acquired a high level of expertise in the functioning of the system.86
83Idat 29.
84Id at 30.
85Ibid.
86Idat 35.
One of the main objectives of the UNCITRAL Model Law on Electronic Signatures was to
pre-empt disharmony and possible over-regulation by offering general criteria to establish the
functional equivalence between electronic and paper-based signature and authentication
methods. Although the UNCITRAL Model Law on Electronic Commerce has found widespread
acceptance, and an increasing number of States have used it as a basis for their e-commerce
legislation, it cannot yet be assumed that the principles of the Model Law have achieved
universal application. The attitude taken by various jurisdictions in relation to electronic
signatures and authentication typically reflects the general approach of the jurisdiction to writing
requirements and the evidentiary value of electronic records.87
The main focus of discussions concerning liability in connection with the use of electronic
signature and authentication methods has been the basis and characteristics of the liability of
certification service providers. It is generally accepted that the basic duty of certification services
provider is to utilize trustworthy systems, procedures and human resources and to act in
accordance with representations that the certification services provider is expected to exercise
reasonable care to ensure the accuracy and completeness of all material representations it makes
in connection with a certificate. All these activities may expose a certification services provider
to a varying degree of liability, depending on the applicable law. The following paragraphs
identify the instance that carry a greater risk for a certification services provider of being
exposed to liability and summarize the way in which domestic laws deal with such liability.88
International use of electronic authentication and signature methods may also benefit from
the adoption of those UNCITRAL standards. In particular, the flexible criteria for functional
equivalence between electronic and paper-based signatures contained in the United Nations
Convention on the Use of Electronic Communications in International Contracts may provide in
an international common framework for allowing electronic authentication and signature
methods that require the involvement of a trusted third party in the authentication or signature
process.89
87Idat 43.
88Idat 95.
89Idat 103.
The modern era is of electronic trading between modern electronic digital economies across the
world under the existing global electronic digital trade environment. Most of the worlds
traditional economies have been transformed into the modern electronic digital economies and
the substance of traditional economies is likely to be at stake in the near future. The major
business organizations, industries and individual firms of the developed modern, electronic
digital economies have already imbibed the modern electronic digital communication system i.e.,
global internet/world-wide website system (www) of electronic digital communication system on
a large scale and are carrying out global trading transactions through this modern electronic
digital communication system across the world. This system is based upon the application of
developed latest information communication technology which is based on the applied electronic
digital science of communication. This system has enabled the developed modern electronic
digital economies in promoting their large number of global trade transaction very fastly and
safely with prompt maximum efficiency at the optimal trading cost within possible shortest
duration irrespective of their distances and locations in the world.90
Criteria for Recognition of Foreign Electronic Authentication and Signature Methods
One of the main obstacles to the cross-border use of electronic signatures and authentication
has been a lack of interoperability, due to conflict or divergent standards or their inconsistent
implementation. Various forums have been established to promote standards-based, interoperable
PKI as a foundation for secure transactions in electronic commerce applications. They include
both intergovernmental and mixed public sector and private sector organizations at a global or
regional level.91
Place of origin
Place of origin has been a classic factor in affording legal recognition to foreign documents or
acts. This is typically done on the basis of reciprocity, so that signatures and certificates of a
given country will be given domestic effect to the extent that domestic signatures and certificates
are given legal effect in the other country. Another possibility is to subject the domestic effect of
90S.B. Verma, R.K. Shrivastava, al., ed., Dynamics of Electronic Commerce (AlokSrivastava,
Electronic Trading Analysis: Trade Index Approach) 224 (Deep & Deep Publications Pvt. Ltd.,
New Delhi. 2007).
the foreign signature and certificate to some form of validation or acknowledgement by a
domestic certification services provider, certification authority or regulator.92
A few countries, typically enacting States of the UNCITRAL Model Law on Electronic
Commerce, have adopted the general standard of reasonable care for the conduct of the
certification services provider. In some countries, it appears that a certification services provide
will most likely be held to a general standard of reasonable care, although the fact certification
services providers, by their nature, will be parties with specialized skill in whom laypersons
place trust beyond that extended to normal market place participating may eventually give rise
to professional status, or otherwise subject them to a higher duty of care to do what is reasonable
given their specialized skills.93
Failure to Suspend or Revoke a Certificate
The certification services provider could also incur liability for failing to suspend or revoke a
compromised certificate. For a digital signature infrastructure to function properly and enjoy
trust, it is critical that a mechanism be in place to determine in real time whether a particular
certificate is valid, or whether it has been suspend or revoked. Whenever a private key is
compromised, for example, revocation of the certificate is the primary mechanism by which a
signatory can protect it from fraudulent transactions initiated by impostors who may obtained a
copy of their private key.94
4.2 OECD (Organization of Economic Co-operation and Development)
The Organizations of Economic Co-operation and Development (OECD) have been putting
together several initiatives and policy guidelines to address communication infrastructure
development throughout the world.95OECD guidelines are intended:
(i) to promote the use of cryptography,
(ii) to foster confidence information and communications infrastructures, networks and
systems and the manner in which they are used,
(iii) to help ensure the security of data, and to protect privacy, in national and global
information and communications infrastructures, networks and systems,
92Id at 74.
93Id at 84.
94Idat 100.
(iv) to promote this use of cryptography without unduly jeopardizing public safety, law
enforcement, and national security,
(v) To raise awareness of the need for compatible cryptography policies and laws, as well
as the need for interoperable, portable and mobile cryptographic methods in national
and global information and communications networks.96
The finding of OECD is:Although a broad range of products and services are currently available
for sale in the electronic marketplace, consumers have not fully embraced the idea of buying
online. The most common online shopping experiences consist of consumers using technologies
to research products and services and then turning to more traditional methods, such as phone,
fax or local retail outlets to make their actual purchases. Faced with 97 questions about the
accuracy for information, contract formation, the availability of redress and dispute resolution
mechanisms, the potential for fraud and privacy issues, consumers are concerned about the
practicalities and the safety of the electronic environment and are reluctant to fully participate in
electronic commerce. Direct business-to-consumer electronic commerce will only be embraced
when its value is greater than the perceived risks. Consumers need assurances that the electronic
marketplace provides a safe and predictable place for them to do business.
The problems that may be devil a consumer buying on the Internet are such that not all of them
may be solved by him, even though he may, with guidance, be able to deal more effectively in
pursuing the transaction and minimizing the potential for losing out in the purchase. The
disparate nature of the legal obligations of buyers and sellers in different jurisdictions, the nature
of the product or service, the means of examining a product intended to be bought raise complex
issues of applicable law and jurisdiction, effective means of enforcement of the rights, etc., and
these are matters for international agreement and a common set of rules of trade in the electronic
market place will have to evolve and that will have to be accepted as a standard, reducing
uncertainty, contention and litigation, all of which will follow in the motions are slow to bring
about the necessary consistency in legal rules.98
The OECD, recognizing that differences in the legal requirements of domestic legislation of
countries regarding labeling or other disclosure requirements, warranties, guarantees, product

98Id at 87.
standards and specifications, product liability, and rules for offering or accepting orders pose
problems for consumers buying on the Internet, suggested that towards the international
harmonization of rules of trade among countries they could agree on standards of consumer
protection for cross-border trade or create model contracts that include procedures for consumer
protection.99
In its Guidelines forConsumer Protection in the Context of Electronic Commerce, OECD has
focused on the need for global cooperation in enabling the consumer to truly exercise his rights
in the electronic market place. In addition to modifying their existing legal framework and
fostering self-regulatory practices to achieve these objectives, member countries are invited
through their judicial, regulatory and law enforcement authorities to cooperate at the
international level as appropriate through information exchange, coordination, communication
and joint action to combat cross-border fraudulent, misleading and unfair commercial conduct
and also to make use of existing international networks and enter into bilateral and multilateral
agreements or other arrangements as necessary and appropriate, to accomplish such cooperation.
However, the significant recommendation is one100 that requires them to work toward developing
agreements or other arrangements for the mutual recognition and enforcement of judgments
resulting from disputes between consumers and businesses, and judgments resulting from law
enforcement actions taken to combat fraudulent, misleading or unfair commercial conduct.101
And, increasing the confidence of a buyer in dealing on the Internet cannot be done by
governmental fiat alone. In the West, voluntary associations have played a tremendous part in
educating the consumer of the hazards of unguided electronic purchasing, and his rights and the
bodies to which he may turn for relief in the event of a supplier failing or refusing to honor his
contractual obligations. Most important, this education of the consumer is done online also and at
no cost to the consumer. Unfortunately, the consumer movement has not taken roots in India and
this is due to a number of reasons. All activity is confined only to the big cities. The major
handicap in the development of a vibrant consumer movement with wide reach covering people
99Id at 71.
100Id at 86.
101Idat 87.
speaking different languages and who live in villages is the lack of resources, financial and
manpower.102
Needless to add, the prime initiative ought to come from the consumer himself or herself. One
should learn to educate himself on the nature of the online market, special hazards, and he very
limited scope for enforcing rights across the border and most important on making informed
decisions before paring with his money.103 The taxation situation in Europe, and trade between
Europe and the United States, is similarly complex. The Organization for Economic Cooperation
and Development (OECD), the economic policy coordinating body of European, American, and
Japanese governments, is currently investigating different schemes for applying consumption and
business profit taxes for e-commerce digitally downloaded goods. The EU began collecting a
VAT on digital goods such as music and software delivered to consumers by foreign companies
in 2003.104
The development of electronic commerce also has the potential to create a parallel banking and
payment system outside conventional banking channels. A key issue for organizations and
governments is how the development of electronic commerce relates to the current tax system.
This issue includes principles of direct and indirect taxation, as well as increased opportunities
for tax avoidance and evasion and issues of tax administration. Consistent approaches at the
international level are urgently required to ensure the effectiveness of taxation laws in this new
environment. The OECD identified the following issues and is working with governments to
reach an international consensus on general principles:
(i) Issues relating to the OECD Model Treaty on Income and Capital,
(ii) Issues relating to transfer pricing, (iii) issues relating to consumption taxes, and (iii)
Implication of tax administration and tax compliance.105
Where substantive actions have already been initiated in the OECD and elsewhere to ensure
that the information infrastructure is responsive to the needs of a wide range of commercial and
102Ibid.
103Ibid.
104Kenneth C. Laudon and Carol GuercioTraver, E-commerce 529 (Dorling Kindersley India
Pvt. Ltd., New Delhi 4thedn., 2009).
105Supra note 11 at66.
non-commercial users, broadly support these actions.106 Where substantive actions are still
required, governments to formulate practical initiatives in consultation with users and producers
of Electronic Commerce applications and to pursue these initiatives vigorously, particularly to
address legal issues arising in electronic commerce and to provide means of redress for those
suffering from dishonest acts perpetrated in this environment.107
The OECD has also recognized the vagueness in the legal position of the rights of a consumer
purchasing across national borders over the Internet. Business-to-Consumer Electronic
Commerce-Survey of Status and Issues OCDE/GD (97) states:
For cyberspace transactions, consumer protection policy is not yet established. When a
consumer is dissatisfied with the products delivered, it is questionable whether in all cases
money can be returned in exchange for the products. It is not clear whether the policy that
applies for physical market transactions also applies for electronic transactions. Individual firms
have the incentive and the ability to offer money-back guarantees, but it may be necessary for
industry self-regulation and/or government regulation providing for rules on nullification,
cancellation and cooling off applicable even to cross-border transactions may be necessary to
ensure108 consumer confidence and realize healthy market growth. In this respect, it is also
necessary to clarify the liability of the bodies involved in transactions. Merchants, network
service providers, payment system operators and consumers may have to have rules for sharing
responsibility in the case of damages due to transactions.109
4.3 WIPO (World Intellectual Property Organization)
The World Intellectual Property Organization (WIPO) was created by the convention
establishing the World Intellectual Property Organization popularly known as WIPO
Convention. WIPO Convention was formally signed at Stockholm on July 14, 1967 and came
into force in 1970. WIPO was created with the objective to encourage creative activity, and to

107Idat 327.
109Id at 57.
promote the protection of intellectual property throughout the world through cooperation among
States. WIPO became the specialized agency of United Nations in 1974.110
WTO and WIPO both also involved in discussions of IPR issues in respect of global e-
commerce. WTO has brought out a specific study on TRIPs provisions and electronic commerce
and WIPO initiatives resulting in new obligations in relation to issues arising out of electronic
commerce on copyright and related rights and may result in further disciplines in the area of
trademarks. The World Intellectual Property Organization (WIPO) has also prepared a Digital
Agenda, setting out guidelines and screening solutions to problems raised by the impact on
electronic commerce and intellectual property. The 10 points of the WIPO Digital Agenda are as
follows:
1. Broaden the participation of developing countries through the use of WIPO NET and
other means for:
(i) Access to intellectual property information;
(ii) Participation in global policy formulation; and
(iii) Opportunities to use their intellectual property assets in electronic commerce.
2. Entry into force of the WIPO Copy Right Treaty (WCT) and the WIPO Performances and
Phonograms Treaty (WPPT) before December 2001.111
3. Promote the adjustment of the international legislative framework to facilitate electronic
commerce through:
(i) the extension of the principles of the WPPT to audio-visual performances;
(ii) the adaptation of broadcasters rights to the digital are; and
(iii) (iii) Progress towards a possible international instrument on the protection of
database.
4. Implement recommendations of the Report of the Domain Name Process and pursue the
achievement of compatibility between identifies in the real and virtual worlds through the
establishment of rules for mutual respect and the elimination of contradictions between
the domain name system and intellectual rights.
5. Develop appropriate principles with the aim of establishing, at the appropriate time at the
international level, rules for determining the circumstances of intellectual property
110Meenu Paul, Intellectual Property Laws 6 (Allahabad Law Agency, Faridabad (Haryana)
3rdedn., 2009).
111S.B. Verma, R.K. Shrivastava, al., ed., Dynamics of Electronic Commerce (V.K. Agarwal,
Legal Dimensions in Cyber Transactions) 267 (Deep & Deep Publications Pvt. Ltd., New Delhi.
2007).
liability of Online Service Providers (OSPs) which are compatible and workable within a
framework of general liability rules for OSPs.
6. Promote adjustment of the institutional framework for facilitating the exploitation of
intellectual property in the public interest in a global economy and on a global medium
through co-ordination and, where desired by users, the implementation of systems in
respect of:
(i) the inter-operability and interconnection of electronic copy right management
systems and metadata of such systems;
(ii) the online licensing of the digital expression of cultural heritage; and
(iii) The online administration of intellectual property disputes.
7. Introduce and develop online procedures for the filing and administration of international
application for the Patent Co-operation Treaty (PCT), the Madrid System and the Hague
Agreement at the earliest possible date.
8. Study and, where appropriate, respond to a timely and effective manner to the need for
measures designed to improve the management of cultural and other digital assets at the
international level by, for example, investigating the desirability and efficacy of:112
(i) Model procedures and forms for global licensing of digital assets;
(ii) The notarization of electronic documents; and
(iii) The introduction of a procedure for the certification of websites for compliance
with appropriate intellectual property standards and procedures.
9. Study any other emerging intellectual property issues related to electronic commerce and,
where appropriate, develop norms in relation to such issues.
10. . Co-ordinate with other international organizations in the formulation of appropriate
international positions on horizontal issues affecting intellectual property, in particular: (i)
The validity of electronic contracts, and
(ii) Jurisdiction.113
In December 1996, the WIPO updated the Berne Convention and new protection for performers
and producers of sound recordings by adopting new treaties, namely, the WIPO Copyright Treaty
and the WIPO Performances and Phonograms Treaty. Both treaties include provisions relating to
technological protection, copyright management information and the right of communication to
the public, all of which are indispensable for an efficient exercise of rights in the digital
environment. These treaties also contain provisions that permit nations to provide for exceptions
112Id at 268.
113Id at 269.
to rights in certain cases that do not unreasonably prejudice the legitimate interests of the author
(for example, fair use). These provisions permit members to carry forward and appropriately
extend into the digital environment limitations and exceptions in their national laws, which have
been considered acceptable under the Berne Convention. These provisions permit members to
devise new exceptions and limitations that are appropriate in the digital network 114 environment,
but neither reduce nor extended the scope of applicability of the limitations and exceptions
permitted by the Berne Convention. Government should work appropriate copyright protection
for works disseminated electronically.115
One of the objectives of The WIPO Copyright Treaty 1996, as its Preamble states, was
introduce among other matters new international rules and clarifications to existing rules which
would provide adequate solutions to the questions raised by new economic, social, cultural and
technological developments, affecting protection of the rights of authors in their literary and
artistic works. In the main, this Treaty covers:
(i) Protection to computer programs as literary works,
(ii) Compilations of database constituting intellectual creations,
(iii) Right of distribution to authors of literary and artistic works,
(iv) Right of rental of computer programs, cinematographic works and works embodied in
phonograms,
(v) Limitations and exceptions that domestic legislation may impose on the rights of authors
of literary and artistic work.116
The best way of getting the desired domain names is to move early, it is now becoming standard
practice with most registrars as well as in courts of law that a name that is already registered as a
trademark is unlikely to be granted as a domain name. This is clearly the recommendation of the
World Intellectual Property Organization (WIPO), the United Nations agency for protecting
intellectual property around the world.117
114S.B. Verma, R.K. Shrivastava, al., ed., Dynamics of Electronic Commerce

(SawaliaBihariVerma, Emergence of Global E-Commerce-Strategies and Prospects)) 89 (Deep &
Deep Publications Pvt. Ltd., New Delhi. 2007).
115Idat 90.
Both the TRIPs Agreement and Copyright Treaties of the WIPO recognize the copy right
protection covers compilations of data or other material the contents of which constitute
intellectual creations. It has been informally agreed that the impact of digital technology on
copyright and related rights has to a large extent, been to enable production and distribution of
pirated sound recordings, films, software,118 CD-ROMs etc. Despite the legal protection offered
by these international agreements, the use of trademarks on the Internet continues to raise
important questions, as for example, with regard to jurisdictional authority.119
Intellectual Property Rights-Jurisdiction in Electronic Commerce
The WIPO in its Primer on Electronic Commerce and Intellectual Property Issues offers a very
exhaustive analysis of issues, basically those affecting intellectual property rights, in determining
jurisdiction in medium as the Internet which has no physical boundaries, a position complicated
by attempts to use inappropriate legal provisions affording protection to intellectual property
rights in a fixed geographical area to a method of dissemination which cannot always be shown
to be fixed to a specific location, and of sufficient permanency to make the pursuit of the
offender worthwhile. On an alleged infringement of a trademark on the Internet, the WIPO
Primer highlights the difficulty in determining jurisdiction. It states: If a company in one country
operates a website using that has not been registered there by any third party, but nonetheless
offers commercial services in connection with the use of the sign in allegedly infringing manner
in other countries where a corresponding trademark is registered, where has the infringement
occurred, and where does jurisdiction lie? Without an appropriate regulatory framework,
someone using a trademark on the Internet may potentially be sued in court in any country of the
world, and courts will have to determine whether a sufficient nexus exists to justify the exercise
of jurisdiction.120
4.4ICANN (Internet Corporation for Assigned Names and Numbers)
ICANN was formed in 1998 as a private sector initiative to assume responsibility for overseeing
the technical coordination of Domain Name System. There was a sense at that time that the
118S.B. Verma, R.K. Shrivastava, al., ed., Dynamics of Electronic Commerce (ArchanaKaul, E-
Commerce- Perspective and Issues) 70 (Deep & Deep Publications Pvt. Ltd., New Delhi. 2007).
119Idat 71.
growing international and commercial importance of the Internet necessitated the creation of
technical management and policy development body that was more formalized in structure, more
transparent and accountable, and more reflective of the diversity of the worlds Internet
communities; this contrasted with the early ad hoc and voluntary efforts to coordinate the
functions of the DNS. ICANN states that it has the objective to operate as an open, transparent,
and consensus-based body that is broadly representative of the diverse stakeholder communities
of the global Internet.121
President Clinton, using funds from the Department of commerce, encouraged the establishment
of an international body called the Internet Corporation for Assigned Names and Numbers
(ICANN) that hopefully could better represent a wider range of countries and a broad range of
interests, and begin to address emerging public policy issues. ICANN was intended to be an
Internet/e-commerce industry self-governing body, not another government agency. The
explosive growth of the Web and e-commerce created a number of issues over which ICANN
had no authority. Content issues such as gambling. And offensive written expressions and
graphics, along with commercial issue of intellectual property protection, ushered in the current
era of growing governmental regulation of the Internet and e-commerce throughout the world.
Today, ICANN remains in charge of the domain names (such as www.company.com) into IP
addresses. It has subcontracted the work of maintaining the databases of the domain registries to
several private corporations.122
A coalition of the technical, business, academic and user communities got together as ICANN for
technical functions which earlier being handled123 by the Internet Assigned Number Authority
under to the Government of the United States. These functions include the assignment of:
Internet domain names, IP address numbers, and Protocol parameter and port numbers. The
operation of the Root Server system is also co-ordinated by ICANN.124
121E-Commerce and Development Report 2002, 38 (United Nations, New York and Geneva,
2002).
122Kenneth C. Laudon and Carol GuercioTraver, E-commerce 525 (Dorling Kindersley India
Pvt. Ltd., New Delhi 4thedn., 2009).
124Id at 106.
The remaining Internet ruling body, ICANN, has no choice but to become more than a club of
citizen engineers. It task sound boringly technical: keeping track of the Internets names and
numbers. The organization oversees the domain-name system, which links the 12-digit numbers
that identify servers connected to the Internet to addresses such as www.economist.com. But
ICANN, s challenges are now are political and economic than technical. It represents all Internet
users. Although the net is highly decentralized, its naming system is hierarchical, as it must be if
every computer is to be easy find.125
Domain names can now be registered for a fee from any one of a large number of registrars
accredited by an apex body-a non-profit international organization called ICANN (Internet
Corporation for Assigned Names and Numbers). Recently, in an effort to reduce the over-
crowding of the .com domain as well as to provide more meaningful gTLD (The Generic Top
Level Domains) names, the ICANN has decided to introduce a set of seven new gTLDs
-.areo, .biz, .coop, .info, .museum, .name, .pro- in addition to the existing ones.126
The Internet Corporation for Assigned Names and Numbers (ICANN) will also cancel a domain
name registration under the following circumstances:
(i) The transfer of the domain name or registration during proceedings relating to
abusive registration, on receipt by ICANN of written or appropriate electronic
instructions from the domain name holder or his authorized agent to take such action;
(ii) On receipt by ICANN of an order from a court or arbitral tribunal in each case of
competent jurisdiction requiring such action; and
(iii) On receipt by ICANN of a decision of an administrative panel requiring such action

in any administrative proceeding to which the domain name holder was a party and
125Lindsay Percival-Straunik, the Economics Books E-Commerce 144 (Profile Book Ltd,
London 2002).
was conducted under ICANNs Uniform Domain Name Dispute Resolution Policy or
a later version of this policy adopted by ICANN.127
ICANNs Dispute Resolution Policy also provides for the representations deemed to be
made by an applicant for registration or renewal or maintenance of a domain name. They are:
(a) The statements made in the Registration Agreement are complete and accurate;
(b) To the applicants knowledge, the registration of the domain will not infringe upon or
otherwise violate the rights of any third party;
(c) The applicant is not registering the domain name for an unlawful purpose; and
(d) The applicant will not knowingly use the domain name in violation of any applicable
laws or regulations. It is the applicants responsibility to determine whether his domain
name registration infringes or violates someone elses rights.128
ICANNs policy recognizes that any of the following circumstances, in particular but
without limitation, if found by the Panel to be proved based on its evaluation of all evidence
presented, shall demonstrate the respondents rights or legitimate interests to the domain name
for purposes of Paragraph 4[a] [ii] of the Policy (the respondent has no rights or legitimate
interests in respect of the domain name):
(i) Before any notice to him of the dispute, his use of or demonstrable preparations to
use, the domain name or a name corresponding to the domain name in connection
with a bona fide offering of goods or services; or
(ii) The respondent (as an individual, business, or other organization) has been commonly
known by the domain name, even if he had acquired no trademark or service mark
rights; or

128Id at11.
(iii) The respondent is making a legitimate noncommercial or fair use of the domain
name, without intent for commercial gain to misleadingly divert consumers or to
tarnish the trademark or service mark at issue.129
The requirements of mandatory administrative proceeding do not affect the right of either party
to the dispute to submit the dispute to a court of competent jurisdiction for independent decision,
either before commencing the mandatory administrative proceeding or after that proceeding has
ended. When Administrative Panel decides that a domain name registration be cancelled or
transferred, ICANN will wait for ten days to implement that decision. If within that time the
respondent initiates action in a court to enforce his rights and advises ICANN to that effect,
ICANN will not implement the Administrative Panels decision and would take no further action
until receives: (i) satisfactory evidence of a resolution between the parties; (ii) satisfactory
evidence that the legal action in court has been dismissed or withdrawn; or (iii) a copy of an
order from such court dismissing the action or ordering that the respondent does not have the
right to continue using his domain name.130
4.5 WTO (World Trade Organization)
WTO is an international body that promotes and enforces the provisions of trade laws and
regulations. The World Trade Organization has the authority to administer and policy new and
existing free trade agreements, to oversee world trade practices, and to settle trade disputes
among member states. The WTO was created to replace GATT. The WTO began operation on
January 1, 1995. The WTO expanded the GATT agreement to include trade in services, such as
international telephone service, and protections for intellectual property-that is, creative works
that can be protected legally, such as sound recordings and computer programs. The WTO is also
a formally structured organization whose rules are legally binding on its member states.131
The WTO is based in Geneva, Switzerland, and is controlled by a general council made up of
member states, ambassadors who also serve on various subsidiary and specialist committees. The
129Idat 14.
130Idat 15.
ministerial conference, which meets every two years and appoints the WTOs Director-General,
oversees the General Council.132 These are handling the issue of:
(i) Trade and development, trade and the environment, regional trading agreements,
investment and,
(ii) Competition policy, transparency in government procurement, trade facilitation, and
budget/finance and administration.133
Since 1998, WTO members have begun to explore how the World Trade Organization should
deal with the question of electronic commerce. Given the unique nature of this emerging mode of
delivering products (goods and services), many trade-related questions remain to be answered.
For instance:
(a) Under what circumstances an electronic delivery shouldis considered goods or a service?
(b) When an electronic delivery is considered to be a service, under what circumstances
should it be considered as crossing a border and under what circumstances should it be
considered as being offered within the borders of a country?
(c) To what extent is electronic commerce covered by existing WTO trade obligations?
(d) How should electronic commerce be addressed in the context of future trade
negotiations?
The broad consensus is that products which are bought and paid for over the Internet but are
delivered physically would be subjected to existing WTO rules on trade in goods. But the
situation is more complicated for products that are delivered as digitized information over the
Internet, as a variety of issues arise relating to the appropriate policy regime. Both the supply of
Internet access services and many of the products delivered over the Internet fall within the
ambit of the General Agreement on Trade in Services, but there is a need to clarify how far
particular activities are covered by the members market-access commitments.134
The World Trade Organization (WTO) defines E-commerce: The production, distribution,
marketing, sales or delivery of goods and services by electronic means is known as E-commerce.
A commercial transaction can be divided into three main stages: the first stage is the advertising
132Ibid.
133S.N. Chary, Elements of International Business204 (Wiley India Pvt Ltd., New Delhi, 2006)
134 P.M. Bakshi and R.K. Suri, ed,.Cyber & E-Commerce Laws200 (Bharat Publishing House,
New Delhi, 2002)
and searching stage; ordering and payment is the second stage and the third stage is the delivery
stage. Any or all of these may be carried out electronically and may, therefore, be covered by the
concept of E-Commerce.135
Products which are bought and paid for over the Internet but delivered physically would be
subject to existing WTO rules on trade in goods. But the situation is more complicated for
products that are delivered as digitized information over the Internet, as a variety of issues arise
relating to the appropriate regulatory regime. Both the supply of Internet access services and
many of the products delivered over the Internet fall within the ambit of the General Agreement
Trade in Services, but there is a need to clarify how far particular activities are covered by the
members market-access commitments. WTO has started examining all trade-related issues of e-
commerce including its effect on trade and economic prospects, financial implications, treatment
of e-commerce in the GATS legal framework and intellectual property issues, etc.136
The WTO study entitled Electronic Commerce and the Role of WTO examined the
potential trade gains from the rapidly increasing use of the Internet for commercial purposes. The
report outlines the complexities as well as the potential benefits of trade via the Internet, provides
background information for the 134 WTO members who are now engaged in the process of
developing policy responses to this new form of commerce which is growing at a staggering rate.
Among the policy issues identified in the study are the legal and regulatory frameworks for
Internet transactions, security and privacy questions, taxation, access to the Internet, market
access for suppliers over the Internet, trade facilitation, public procurement, intellectual property
questions and regulation of content.137The Information Technology Agreement (ITA), a
plurilateral agreement within the WTO, aims to expand world trade in information technology
products considering the key role this trade plays in development of information based industries
and the dynamic expansion of the world economy while recognizing the goal of raising the
135S.B. Verma, R.K. Shrivastava, al., ed., Dynamics of Electronic Commerce

(SawliaBihariVerma, It and business: A Means of Rapid Development) 209 (Deep & Deep
Publications Pvt. Ltd., New Delhi. 2007).
137Id at 267.
standards of living and expanding the production of and trade in goods. The Information
Technology Agreement is solely a tariff cutting mechanism.138
The Networked World program began with the observation that current WTO provisions do
not address electronic commerce directly in any meaningful way. E-commerce is still so new that
only one free trade pact in the world-the US-Jordan Free Agreement-includes provisions for it.
And apart from the 1998 duty-free cyberspace commitment, the WTO is largely a void in this
area: although it has held extensive discussions on electronic commerce, no formal rules prevent
its members from discriminating against products traveling by wire or satellite. The WTO should
therefore find global consensus on a set of general principles for Internet trade. First, WTO
members should commit to technological neutrality, which means ensuring that current WTO
agreement and basic concepts of non-discrimination, national treatment, and most-favored-nation
status apply to e-commerce as well as to conventional trade. Next, the treatment of digital
products must embody a similar principle. The WTO has correctly avoided making a decision on
whether to classify products delivered in digital form as services or goods or to create a new
category for them. Whatever the ultimate decision, it should not disadvantage digital products in
favor of identical, physically delivered goods.139
The new area of trade involves goods crossing borders electronically. Broadly speaking, this is
the production, advertising, sale and distribution of products via telecommunications networks.
The most obvious examples of products distributed electronically are books, music and videos
transmitted down telephone lines or through the Internet. The growing importance of electronic
commerce in global trade led WTO members to adopt a declaration on global electronic
commerce on 20 May 1998 at their Second Ministerial Conference in Geneva, Switzerland. The
declaration directed the WTO General Council to establish a comprehensive work programmed
to examine all trade-related issue arising from electronic commerce, and to present a progress
report to the WTOs third Ministerial Conference.140 The 1998 declaration also included a so-
called moratorium stating that members will continue their current practice of not imposing
138Dr.VibhaMathur, WTO and India 217(New Century Publications, New Delhi, 2005).
139Y. Chandra Sekhar, WTO The Emerging Agenda (Arup Choudhuri by Overcoming the Digital
divide) 49(ICFAI University Press, Hyderabad, 2004).
140Dr.VibhaMathur, WTO and India 220 (New Century Publications, New Delhi, 2005).
customs duties on electronic transmission. The work programmed was adopted by the WTO
General Council on 25 September 1998.141
Doha Decision related to E-Commerce:
At the Fourth Ministerial Conference in Doha in 2001, ministers agreed to continue the work
programmed as well as to extend the moratorium on custom duties. They instructed the General
Council, in paragraph 34 of the Doha Declaration, to report on further progress to the Fifth
Ministerial in Cancun, in 2003. Under the work programmed, issues related to electronic
commerce have been examined by the Council for Trade in Goods, the Council for TRIPS and
the Committee on Trade and Development. During the course of the work programmed a number
of background notes on the issues have been produced by the WTO Secretariat and many
member governments have submitted documents outlining their own thoughts. The following is
a summary of the main points which emerge from these reports since the beginning of the work
programmed in 1998, and from several dedicated discussions on e-commerce issues held under
the auspices of the General Council:
Three types of on-line services transactions were identified:
(i) Transactions for a service which is completed entirely on the Internet from selection
to purchase and delivery,
(ii) transactions involving distribution services in which a product, whether a good or
a service, is selected and purchased on-line but delivered by conventional means,
(iii) Transactions involving the telecommunication transport function, including
provisions of internet services.142
(iv) The growing importance of electronic commerce in global trade led WTO members
to adopt a declaration on global electronic commerce on 20 May 1998 at their
Second Ministerial Conference in Geneva, Switzerland.143
Work Programmed Related to E-commerce and Deliberations in Various Bodies of WTO:
A process is underway in the General Council of WTO to discuss and deliberate on the various
multilateral trade issues raised by members. The objective of the process is to make
recommendations on these issues. While it is the generally held view that goods ordered
141Id at221.
142Ibid
143Ibid.
electronically but delivered physically would continue to attract the existing disciplines of WTO,
unresolved issues remain in cases of electronic delivery of goods and services. Some of these
issues are being discussed in the various bodies of the WTO including in the Council for Trade in
Services, Council for Trade in Goods, TRIPS Council and Committee for Trade & Development.
The deliberations have centered on the following issues:
(i) Market Access Related to E-Commerce: Whether conduct of trade by electronic
means would change the obligations laid down in the tariff bindings contained in
schedules of member countries. How should customs duties be applied to electronic
transmissions?144
(ii) Rules of Origin related to E-Commerce: To what extent would rules of origin be
applicable to an electronic commerce setting as sophisticated technology allowing for
easy duplication and unlimited routing of digitalized data made it difficult to find out
where a transmission actually originated?
(iii) Standardization Relating to E-commerce: The current expansion of electronic
commerce was based on the freedom of transactions and standards needed to be
developed to promote electronic commerce and not to prevent such a development.
Should WTO aim at developing general disciplines and principles apart from setting
specific standards for electronic commerce?
(iv) Copyright and Related Rights of E-Commerce:A number of issues arise out of
electronic commerce in connection with copy right and related rights, in the light of
changes the digital networks have brought to the way that works and other protected
materials are created, produced, distributed and used. These include implications for
definition of publication, right of re-production, right of communication, moral rights,
right holder, protected subject matter, limitations and collective management.
(v) Scope of GATS with Respect to Electronic Delivery of Services: Would electronic
delivery of services fall within the scope of General Agreement on Trade in Services
(GATS) since the agreement applies to all services regardless of the means by which
they are delivered? If GATS discipline is applied to electronic delivery of services
what implications does it have on the previous commitments undertaken in respect of
the different services sectors?
144Id at 223.
(vi) Development Dimension of E-commerce: The importance of talking into account
revenue and fiscal implications of electronic commerce for developing countries and
the importance of developing human resources and critical infrastructure in this
regard.145
The issues of government involvement in these areas are far from resolved and the much desired
global consensus is still at the stage of discussion among developed countries at international for
a like the WTO and the United Nations. For all practical purposes, the increasing numbers of
disputes emanating from the Internet are being resolved in the traditional courtrooms around the
world with the decisions on the applicability of the old economy rules to new economy situations
being left mostly to the judiciary on a case-to-case basis. Internet-specific legislation is however
becoming more common in the developed countries and governments around the world,
particularly in developing countries, are following clearly enunciated policies towards the
Internet with express desire to promote its use and spread in their respective countries. In spite of
the evolving nature of the Internet laws and regulations, however, there are already a few well-
established procedures and codes of conduct that one needs to be aware of in conducting
business online.146
Other International Institutional Work for E-Commerce:
(i) Microsoft: Microsofts e-commerce platform is the set of software technologies and
products that implement and support e-commerce. Microsoft strives to offer the best
technology platform for e-commerce solutions. The platform starts with Microsoft
Windows 2000 serving as a universal access point to provide consumer and business
user with secure access to online e-commerce services. Windows 2000 has built-in
support for standard Internet security protocols to enable secure convenient online
payment.147
(ii) United Nations Electronic Data Interchange for Administration, Commerce, and
Transport (UN/EDIFACT): The technical standards for e-commerce data exchange
are set by several agencies, but the two key organizations and their standards are the
United Nations Electronic Data Interchange for Administration, Commerce, and
145Id at 224.
Transport (UN/EDIFACT) standard and the American National Standards Institute
(ANSI) rules, known as ANSI/X12. The functional capabilities of these standard e-
commerce technologies enable organizations to compress product-to-market time by
stream ling the production process and by eliminating intermediaries. Customers can
interact directly with the company, efficiency increases, and costs go down.148
(iii) EDI(Electronic Data Interchange): Computer-to-computer exchange of business
information has become an increasingly popular form of electronic commerce. EDI is
important because it enables firms to exchange business information faster, more
cheaply, and more accurately than is possible using paper-based systems. EDI
consists of standardized electronic-message formals (transaction sets) for business
documents such as request for quotations, purchase orders, purchase change orders,
bills of lading, receiving advices, and invoices. These six types of documents
constitute 85 percent of the official communications associated with commercial
transactions in the United States.149
(iv) The UN/CEFACT Modeling Methodology: the United Nations Centre for Trade
Facilitation and information modeling. The business scenarios cover much of the
interaction between companies, and as a result the extended period and lengthy
development cycle needed to establish an e-business relationship can be reduced
significantly.150
(v) UDDI (Universal Description, Discovery, and Integration): one of the main
reasons for enterprises engaging in electronic business is to open new markets and
find new sources of supply more easily than with conventional means, UDDI
provides a global, platform-independent, open framework to enable service clients to:
discover information about enterprise offering Web services, find descriptions of the
Web services these enterprises provide, and find technical information about Web
148Id at5.
149Ravi Kalkota and Andrew B. Whinston, Electronic Commerce376 (Pearson Education
(Singapore) Pte. Ltd., New Delhi, 2005)
150Michael P. Papazoglou and Pieter M.A. Ribbers, E-Business Organizational and Technical
Foundations325 (Wiley & Sons Ltd., England, 2006).
service interfaces and definitions of how the enterprises may interact over the
Internet.151
(vi) European Model EDI Agreement:the parties undertake to implement and maintain
control and security procedures and measures necessary to ensure the protection of
messages against the risk of unauthorized access, alteration, loss or destruction.
Therefore, a new model agreement is clearly needed, particularly as business
communication infrastructure migrates towards open systems, where trading
relationships are increasingly new, parties do not necessarily trust one another and the
use of digital signature is advancing.152
(vii) UNCID: The Uniform Rules of Conduct for Interchange of Trade Data by
Teletransmission (UNCID), published in 1988, is the product of a collaborative effort
directed by the International Chamber of Commerce (ICC). Of great historical
significance, UNCID constitutes a code of conduct or set of guidelines for EDI users,
with specific focus on security and other communication aspects of trade data such as
verification of a senders identity, acknowledgement of receipt, confirmation of
content, encryption or other methods of confidentiality and storage of data.153
(viii) UIACP:With respect of future initiatives, the ICC is currently developing a set of
Uniform International Authentication and Certification Practices (UIACP). The
UIACP seeks to integrate and harmonize the new digital signature legislation, the
rich Latin notarial tradition in all its breadth and wide-ranging law of authentication
(signatures), including certified signatures into a unified business standard for
determining what constitutes a persons authentic act in a business transaction,
whether by traditional paper means or by electronic means.154
(ix) ETERM: Additionally, the ICCs ETERM Working Party is advancing the ETERMS
project-a registry of electronic commerce trade rules and provisions to serve both as a
source for particular legal provisions and definitions which parties may specifically
refer to and incorporate into agreements and as a codification of 155 standard,
worldwide electronic commerce trade practices. ETERM leverage the concept of the
151 Idat 607.
153Id at 239.
154Idat 239.
existing Incoterms program of the ICC for traditional, paper based trade. The
ETERMS project provides for the development and publication of diverse electronic
commerce terms. In operation, ETERMS are intended to provide enhanced notice to
and to bind all contracting parties, within an international context. ETERMS include
three kinds of terms:
(i) Commercial terms submitted by trading partners and information services
providers;
(ii) Best Practice Rules for electronic commerce; and
(iii) Treaties, conventions and standards relevant to electronic commerce.156
155Ibid.
156Idat 240.

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CHAPTER-4

Work of International Institutional Institutions/Organization in the

United Nations Level

1C.S.V. Murthy, E-COMMERCE, Concept, Models, Strategies 62 (Himalaya Publishing House,

(i) Encouraging government recognition, acceptance and facilitation of electronic

(ii) Encouraging consistent international rules to support the acceptance of electronic

4.1.1 UNCITRAL Model Law on Electronic Commerce 1996

10Supra note 5 at 248.

23Supra note 11 at 110-111.

33Supra note 2 at 237.

37Supra note 11 at 113-114.

46Article 6of the UNCITRAL Model Law on Electronic Signature (2001).

63United Nations Convention on the Use of Electronic Communications in International

Treatment of contracts (Articles 8, 11, 12 and 13)

4.1.4 Promoting Confidence in Electronic Commerce: Legal Issue in International Use of

96Supra note 5 at 533.

106Supra note 2 at 326.

114S.B. Verma, R.K. Shrivastava, al., ed., Dynamics of Electronic Commerce

(iii) On receipt by ICANN of a decision of an administrative panel requiring such action

127Supra note 11 at 10.

4.5 WTO (World Trade Organization)

135S.B. Verma, R.K. Shrivastava, al., ed., Dynamics of Electronic Commerce

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