Escrow-Based Arbitration For India's E- Commerce And Platform Economy
- IJLLR Journal
- 40 minutes ago
- 2 min read
Riya Mathur, LLB, Department of Law, Bharati Vidyapeeth Deemed University, New Delhi
Tarun Sharma, LLB, Department of Law, Bharati Vidyapeeth Deemed University, New Delhi
ABSTRACT
India's digital economy has grown at a pace that its dispute resolution architecture was never designed to keep up with. Millions of transactions settle through payment aggregators every day, and a meaningful portion of them give rise to disagreements about delivery, quality, refunds, and contractual performance. When such a dispute surfaces, the central and often overlooked question is not who was right, but who controlled the money while the argument was still ongoing. This paper argues that escrow, already structurally embedded in India's payment ecosystem under the Reserve Bank of India's Payment Aggregators Directions, 2025, can and should be reframed as a legally recognised mechanism of interim financial protection within online arbitration proceedings. Drawing on the Arbitration and Conciliation Act, 1996, the Information Technology Act, 2000, the Consumer Protection Act, 2019, and the NITI Aayog ODR Policy Plan for India, the paper identifies a significant legislative gap: while Indian law separately supports online arbitration, electronic contracts, escrow-based fund holding, and consumer redress, it provides no unified framework that connects these elements into a coherent dispute-linked payment security regime. The paper proposes a model framework that defines the duties of payment aggregators during disputed transactions, establishes escrow-linked interim protection as a digital analogue to Section 17 relief, and prescribes consent, neutrality, and consumer safeguard standards. The central thesis is that online arbitration in India will remain procedurally sound but practically hollow unless the financial stakes of the dispute are secured throughout the process.
Keywords: Online Arbitration, Escrow, Payment Aggregators, ODR, Interim Relief, E-Commerce Disputes, RBI Directions 2025, Consumer Protection
