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Sunday, February 20, 2011 at Kochi

Joint Seminar organised by the UIA,
UIA India Chapter and the Inter-Pacific Bar Association (IPBA)

A Paper on Cyberspace Usages:

Challenges and Dispute Resolution

By :
Vipul Maheshwari
Managing Partner,
MAHESHWARI & CO.

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Introduction

Cyberspace- Issues at the forefront

Challenges in Cyberspace

Disputes resolution in Cyberspace

Conclusion/Suggestion

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Cyberspace

Coined in 1980s by Science friction writer William Gibson.

Cyberspace like physical space comprises of four sub

concepts i.e. place, distance, size and route.

In general Cyberspace represents the new medium of

communication, electronic communication, which is fast
outmoding, or even replacing more traditional methods of
communication. This includes computers, networks, the
internet, software, data storage devices (such as hard
disks
USB disks etc), websites, emails and even electronic
devices
such as cell phones, ATM machines etc.

Unique features- borderless space, dynamic, anonymity,

speed, cost effective, marked with rapid technological
advances.

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Cyber Laws in Cyberspace

The Information Technology, Inventions and Discoveries

widen the scientific horizons but pose new challenges for
the legal world. Therefore, solutions for the disputes
arising out of these challenges, whether statutory or
otherwise, are referred as the Cyber Laws.

European Union, USA, United Nations Commission On

International Trade Law (UNCITRAL) have already framed
important laws to regulate cyberspace. In India,
Information Technology Act (ITA) is also based on
UNCITRAL model, all cyber laws are contained in
Information Technology Act, 2000.

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With the advent of the internet, transmission of

information and transacting of business across
borders, various issues related to cyberspace have
cropped up on legal front.

Following are some major issues:i. Jurisdiction

ii. Cyber Crime
iii. Intellectual Property
iv. Cyber Forensic
v. E-commerce
vi. Electronic Evidence
vii.Privacy
viii.Contract

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Inherent Challenges

US and the West drafted their own legislations by either

adapting their existing laws in the context of cyberspace
or creating new laws in respect thereof.

Determining jurisdiction and formation of e-contracts are two key

issues on which traditional legal principles have been largely
applied by Courts worldwide. For e.g. Longarm Statutes enacted in
US and Minimum Contacts test.

General consensus that in the e-world, electronic signatures and

electronic documents are equally legally valid as the hand-written
signatures or hard copy paper documents.

India enacted its first law on IT through the IT Act, 2000 based on
the principles elucidated in the UNCITRAL Model law of ecommerce. It extends to whole of India and also applies to any
offence or contravention there under committed outside India by
any person.

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Legal Challenges

Conflicting Jurisdictional Problems

Jurisdiction is the authority of a court to hear a case and resolve a
dispute. The issue of Jurisdiction is highly conflicting and debatable
in
cyber law as to the maintainability of any suit which has been filed.

Jurisdiction in International Legal Disputes

In the cyberspace, there is no geographical boundaries. It establishes
immediate long-distance communications with anyone who can have
access to any website.
No judicial body exists to deal with legal commercial problems
arising between citizens of different countries.
There is no uniform, international jurisdictional law of universal
application, and such questions are generally a matter of conflict of
law, particularly private international law.

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Where the contents of a web site are legal in one country and
illegal in another : In the absence of a uniform jurisdictional code,
legal practitioners are generally left with a conflict of law issue.

Position in Europe- The Brussels convention is the controlling

document for
jurisdictional issue within the European Union (E.U.). Also the
fundamentals of jurisdiction within EU countries are based on statute
or regulation, instead of constitutional due process applied in case
laws, as in the U.S.

Leading International Cases-

Zippo Manufacturer v Zippo Dot com 952 F. Supp. 1119 (D.C.W.D. Pa. 1997)-The
Court observed that The developing law of jurisdiction must address itself
weather a particular event in cyberspace is controlled by the laws of the state or
country where the website is located, by the laws of the state or country where
the internet service provider is located, by the laws of the state or country
where the user is located or perhaps by all of these laws.

Calder v. Jones 465 U.S. 783 (1984)-United States Supreme Court held that a
court within astatecould assert personal jurisdictionover the author and editor
of a nationalmagazinewhich published an allegedlylibelousarticle about a
resident of that state, and where the magazine had wide circulation in that state.

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Position in India- In India, all cyber laws are governed by the

IT Act. However, IT Act does not deal with some major legal
issues including the issue of jurisdiction.

It is well-established law in India that where more than one court

has jurisdiction in a certain matter, an agreement between the
parties to confer jurisdiction only on one to the exclusion of the
other(s) is valid.

In case there is no agreement, the respective court considers the

balance of convenience and interests of justice while deciding for
the forum.

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Cyber Crime

Cyber crime is a crime committed over the Internet.

It could be against the government, property and

against any person in various forms.

The law enforcement agencies are facing difficulties in

dealing with cyber crime.

In India, Information Technology Act, 2000 is the

legislation that deals with issue related to cyber crime.

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Types of Cyber Crime

Cyber Crime

Brief Description

Relevant
Punishme
Section in IT nts
Act

Cyber Stalking

Stealthily following a
person, tracking his
internet chats.

43, 65, 66

3 years, or
with
fine up to 2
lakh

Cyber Pornography
including child
pornography

Publishing Obscene in
Electronic Form involving
children

67, 67 (2)

10 years and
with fine may
extends to 10
lakh

Intellectual Property
Crimes

Source Code Tampering,

piracy, copyright
infringement etc.

65

3 years, or
with fine up
to 2 lakh

Cyber Terrorism

Protection against cyber

terrorism

69

Imprisonment
for a term,
may extend
to 7 years

Cyber Hacking

Destruction, deletion,

66

3 years, or
with fine up

te

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Increasing Cyber threats in India

Today Cyber crime is a bigger threat to India in comparison

to physical crime. In a survey conducted by National crime
records Bureau, Ministry of Home Affairs shows that cyber
crime is increasing everyday in various forms.

Cyber Crimes increased by 22.7% in 2007 as compared to previous year.

Cyber Forgery 64.0% (217 out of total 339) and Cyber Fraud 21.5% (73 out of
339) were the main cases under IPC category for Cyber Crimes.

63.05% of the offenders under IT Act were in the age group 18-30 years (97
out of 154) and 55.2% of the offenders under IPC Sections were in the age
group 30-45 years (237 out of 429).

According to analysts at the Indian Institute of Science, Tax evasion, cheating

on the Internet, identity theft, child pornography and other cyber crimes
cause a loss of $50 billion annually.

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Presently, Network vulnerabilities have been increasing at a rate of over

40% year-on-year.

According to CERT, Ministry of Information Technology survey Cyber

Crime accelerated about 50 times since 2004.

As per U.K. study, reported cases of spam, hacking and fraud in India
multiplied 50-fold since 2004 to 2007.

Symantec Global Internet Security Threat Report, 2010 says that India
moved up from 11th to 5th position on chart quantifying malicious cyber
activity in 2009

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Contractual difficulties

Recently, India has emerged as a major player in the computer software

and resources sector. Data shows that India will have the largest number
of internet-users in Asia in near future.

IT Act deals with some contractual aspects in E-commerce . However, several

practical problems arise when we form a contract.

In general contract, we see that the acceptor can revoke acceptance of the offer
before it comes to the knowledge of the offeror, but what would be the case where an
acceptance is sent via an electronic record, it may not be possible for the acceptor to
revoke it before it comes to the knowledge of the offeror. However, there may be one
possibility where revocation may still take place i.e. when the acceptance is sent by
an electronic record and the same is sent to a computer resource which is not the
designated computer resource of the offeror, but it is not clear what would prevail
when both the acceptance-revocation are retrieved by the offeror at the same time.

Indian courts following the traditions of common law have developed the doctrine of
last-shot rule. This cardinal rule states that an acceptance should be unqualified
and absolute and any acceptance even with little variation is no acceptance at all.

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Protection of Intellectual Property

Intellectual Property is a property that arises from the

human intellect. It is a product of human creation.

In broad field of IPR, there are various acts which govern

intellectual property assets. In cyberspace, the problem began
when unrelated party started using intellectual property of others
or of famous brand with the intention to use it otherwise. Section
65 of ITA provides for protection of IPR from misuse.

In the present scenario, trademark disputes pose a serious

challenge, as that is one area where the major developments have
taken place. One of the first issues to arise in relation to IPR due
to cyberspace was with respect to domain names.

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Electronic Evidence

Each time a crime is committed whether in physical form or in

cyber space, the success of prosecution largely depends on the
quality of evidence presented at the trial, but this pose a serious
challenge before the investigation agencies to collect and
preserve the evidence.

The Indian Evidence Act, 1872 (section 3) and Information Technology

Act, 2000 (section 4) grants legal recognition to electronic records and
evidence submitted in form of electronic records.

Leading case law- State vs. Mohd. Afzal and others (2003 (71) drj 178)The Delhi High Court concluded that the person who is challenges the accuracy of
computer evidence on the ground of misuse of system, then the challenger has to
establish the challenge. Mere theoretical and generic doubts cannot be cast on the
evidence.

International cooperation is required in providing electronic evidence in

order to meet out the problem of international terrorism.

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Technological Challenges

Globalization and ICT (Information and Communication

Technology) revolution in India has changed the form of
information drastically. It made information more accessible
portable and handy.

The Right of Privacy vis--vis Data Protection

The right of privacy is part of Article 21 of the Indian constitution, but it is not
absolute. Disclosure of private information is justified under certain
circumstances.

In Kharak Singh V. State of U.P. (AIR 1963 SC 1295)- Apex court read the right to
privacy to be within the ambit of Article 21 and construed it as a fundamental right.

The exclusion of privacy protection to only those who are aware of their rights,
or the formal recognition of privacy in a legal system is not a challenge faced
only by India. Globally, protection of privacy has been a challenge in many
countries, and even now it has an uncertain status in many parts of the world.

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The right of privacy may be infringed by:

Utilizing private data already collected for a purpose other than
for which it was collected.
Sending of unsolicited e-mails of spamming.
Unauthorized reading of e-mails of others.

The relevant sections of the Information Technology Act

(ITA) relating to privacy:Section 43 provides protection against unauthorised access to
the computer system including unauthorised downloading,
extraction and copying of data.
Section 66 provides protection against hacking.
Section 67 gives protection against unauthorised access to data.
Section 69 protects against cyber terrorism.
Section 72 protects an individuals privacy and confidentiality.

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Data protection laws

Though the ITA does enforce a level of data protection, it is far

from flawless. The ITA in many ways falls short of International
standards and data protections enacted in other countries in the
world. It lacks the following:The definition and classification of data types.
The nature and protection of the categories of data.
Data controllers and data processors have distinct roles.
Clear restrictions on the manner of data collection.
Clear guidelines on the purposes for which the data can be put
and to whom it can be sent.
Standards and technical measures governing the collection,
storage, access to, protection, retention and destruction of data.
It does not provide strong safeguard and penalties against the
aforesaid breaches.

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Political and social challenges

Nowadays, we find that Media plays an important role in

democracy to make people aware about information related to
government policy and the grievances which people have. But at
the same time it also encroaches on privacy.

Recently, India has adopted new technologies by way of social

networking sites like orkut, facebook, twitter etc., where people of
same interest groups come together as a community. In such
communities lots of people share information of the latest happenings,
express their views, criticize on certain issues etc. All these activities
can elevate sensitive issues, which may lead to communicable
imbalance in the society.

Blogs are increasingly popular in todays world. Through blogs,

people can express their thoughts and views on public and
government sectors, so there is possibility that sensitive information
may be forged and its original intension may be lost.

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Practical Challenges

Regulating Cyber Cafes:

In India, Cyber cafes have emerged as base for cyber crime including
cyber terrorism. Various offences relating to cyber crime suggest that
local cyber cafes have been used for sending threatening mails to any
individual or to any high officials.
Earlier, cyber cafes were required to create detailed records about their
customers browsing habits, but the same is not being abided by the
Cafes.
Dispute settlement:
The IT Act provides various modes of dispute settlements. However,
citizens are not aware of various kinds of commonly committed cyber
offences, procedure for filing a case, resolving a dispute. There is also a
lacuna of trained judges and skilled investigators.
Contractual Aspect:
This unprecedented growth of internet calls for a legal framework for ecommerce in India. IT act deals with some contractual aspect in Ecommerce. However, several practical problems still exist when we form
a contract.

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Indian Laws

i.
ii.
iii.
iv.
v.
i.
ii.

Information Technology Act, 2000

Information Technology (Amendment) Act, 2008
Cyber crime investigation cell
Communications convergence Bill, 2001
Cyber security forum-Joint collaboration between
India and U.S.
E-Governance and E-Policy
Punishments

International initiatives

i.
ii.
iii.
iv.

Arbitration and Mediation- Conventions

World Intellectual Property Organisation (WIPO)
Council of Europe Convention on cyber crime
Cyber Tribunals

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Some Important Provisions with regard to Dispute

Resolution

Conferred legal validity and recognition to Electronic Documents &

Digital Signatures.

Legal recognition to e-contracts.

Set up Regulatory regime to supervise Certifying Authorities.

Laid down Civil and Criminal liabilities for contravention of provisions

of IT Act, 2000.

Created the office of Adjudicating Authority to adjudge contraventions.

Chapter X of IT Act creates a Cyber Appellate Tribunal to oversee

adjudication of cyber crimes. However, in a case where there exists an
arbitration agreement, the court is under obligation to refer the parties
to arbitration in terms of the arbitration agreement.

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Salient features of the Information Technology Act, 2000

Extends to the whole of India (Section 1).

Authentication of electronic records (Section 3)
Legal Framework for affixing Digital signature by use of
asymmetric crypto system and hash function (Section 3)
Legal recognition of electronic records (Section 4)
Legal recognition of digital signatures (Section 5)
Retention of electronic record (Section 7)
Publication of Official Gazette in electronic form (Section 8)
Security procedure for electronic records and digital
signature (Sections 14, 15, 16)
Licensing and Regulation of Certifying authorities for issuing
digital signature certificates (Sections 17-42)
Functions of Controller (Section 18)

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Data Protection (Sections 43 & 66).

Various types of computer crimes defined and stringent penalties provided

under the Act (Section 43 and Sections 66, 67, 72)

Establishment of Cyber Appellate Tribunal under the Act (Sections 4856)

Appeal from order of Adjudicating Officer to Cyber Appellate Tribunal and

not to any Civil Court (Section 57)

Appeal from order of Cyber Appellate Tribunal to High Court (Section 62)

Interception of information from computer to computer (Section 69)

Act to apply for offences or contraventions committed outside India

(Section 75)

Investigation of computer crimes to be investigated by officer at the

DSP (Deputy Superintendent of Police) level.

Power of police officers and other officers to enter into any public place
and search and arrest without warrant (Section 80)

Offences by the Companies (Section 85)

Constitution of Cyber Regulations Advisory Committee who will advice the
Central Government and Controller (Section 88)

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New provisions added through

(Amendment) Act, 2008

Amendments-

IT

New Section to address technology neutrality from its present technology

specific form (i.e. Digital Signature to Electronic Signature)- Section 3A
New Section to address promotion of e-Governance & other IT application
a) Delivery of Service
b) Outsourcing Public Private Partnership- Section 6A

New Section to address electronic contract-Section 10A

New Section to address data protection and privacy -Section 43

Body corporate to implement best security practices-Sections 43A &72A

Multimember Appellate Tribunal-Sections 49-52

Offensive messages and Spam-Section 66A

Pornography-Section 67A

Preservation and Retention of Data/Information-Section 67C

Blocking of Information for public access-Section 69A

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Monitoring of Traffic Data and Information for Cyber SecuritySection 69B

New section for designating agency for protection of Critical

Information Infrastructure-Section 70A

New Section for power to CERT-In to call and analyse information

relating to breach in cyber space and cyber security-Section 70 B

Revision of existing Section 79 for prescribing liabilities of service

providers in certain cases and to Empower Central Government to
prescribe guidelines to be observed by the service providers for
providing services. It also regulate cyber cafes.-Section 79

New Section for Examiner of Digital Evidence-Section 79A

New Section for power to prescribe modes of Encryption-Section

84A

Punishment for most of offences were reduced from three years to

two years
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Mumbai Cyber lab is a joint initiative of Mumbai police and NASSCOM. There
should be a definite forum to redress the grievances under the Cyber Space.

More Public awareness campaigns

Training of police officers to effectively combat cyber crimes

More Cyber crime police cells set up across the country

Effective E-surveillance

Websites aid in creating awareness and encouraging reporting of cyber crime

cases.

Specialised Training of forensic investigators and experts

Active coordination between police and other law enforcement agencies is

required.

Cyber security forum-Joint collaboration between India and U.S.

Regulation of Cyber cafes

Proposed communication Bill, 2001 could be a milestone in resolving disputes

more effectively and practically in cyberspace.
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Cyberspace does not recognise geopolitical boundaries. Parties from

anywhere in the world can transact business with someone located
anywhere else. A dispute may arise at any time, specially when
different nations apply different laws to similar disputes. Therefore,
International agreements in form of convention and cooperation is
required for various dispute resolutions in International arena.

Arbitration and mediation could be a first resort for dispute resolution,

reason being it has an international treaty i.e. New York Convention on
the Recognition and Enforcement of Foreign Awards which provides for
ready enforcement of an award in the territory of virtually all trading
nations of the globe.

World Intellectual Property Organisation (WIPO), Council of Europe

convention on cyber crime, the virtual magistrate and the Cyber
Tribunals are steps towards meeting these needs. For instance recently,
India has established a Cyber Security Forum to collaborate with
United States on responding to cyber security threat.

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a.

We need to promote and facilitate the fair use of cyber space

among general masses and also there is an immediate requirement
of skilled investigators and trained judges for fair and effective
dispute resolution.

b.

India needs to address various questions, issues relating to

cyberspace and the most appropriate way to start is the creation of a
comprehensive legislation which should address broad area of
cyberspace taking into consideration sectoral, institutional and
individual requirements. The proposed Communication Convergence
Bill, 2001 could be a milestone in answering all these questions.

c.

The amendments in several laws by the IT Act are a good beginning

but several changes are still needed for the act to ensure both
functional equivalence and technological neutrality.

d.

International agreements by way of convention and cooperation is

required for various dispute resolutions in International arena.
31

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