This paper examines the challenges of resolving legal disputes arising from electronic commerce, with particular focus on the internet. It explains why simply referencing existing laws is often insufficient, citing issues of jurisdictional ambiguity, lack of uniform applicable law, and the reluctance of businesses to bear the costs of legal compliance across multiple jurisdictions. The paper then presents a case study involving a cross-border e-commerce transaction between a radio station in Africa and an electronics supplier in France, in which a dispute over missing and incorrect goods remained unresolved despite legal and diplomatic intervention. Together, these sections illustrate the practical limitations of current legal frameworks governing international electronic commerce.
This paper examines the resolution of legal disputes associated with electronic commerce, including disputes arising from electronic systems such as the internet. It explores the reasons why simply referring to existing laws is often insufficient to resolve such disputes, and presents a case study involving an unresolved legal conflict in the context of internet-based commerce.
Many legal disputes associated with electronic commerce cannot be resolved by simply referring to relevant laws. Jurisdiction of internet laws raises questions that remain unanswered. Jurisdiction is a function of sovereignty and requires territorial limits, yet the internet cannot be subjected to such limits. As a result, there is no uniform applicable law (Barlow, 1996). Some countries, such as the United States, have laws that govern internet use (Federal Communications Commission, 1996). However, this does not resolve the issue of jurisdiction — particularly for the internet, where it is difficult to locate the physical addresses of online organizations.
Many companies trading in the electronic domain do not subscribe to relevant laws. According to the International Chamber of Commerce (2001), many business entities are unwilling to bear the costs associated with investigating and complying with the many rules across different jurisdictions. Consequently, they avoid pursuing relevant legal remedies in order to save on cost, time, and the uncertainty of the legal process.
Subscribing to relevant laws can also have a negative impact on businesses. Many companies conduct business based on non-legal agreements because of the jurisdictional ambiguity inherent in electronic commerce. Compliance with the law also means adhering to terms and conditions that may subject companies to regulations they consider unnecessary. Furthermore, most companies engaged in electronic commerce — particularly internet-based commerce — are small and medium enterprises (SMEs). Subjecting these entities to extensive lists of requirements and regulations could preclude their participation in the digital economy.
In August 2006, Touch FM, a radio station based in Africa, ordered transmission equipment through the internet from BSI Electronics in Nice, France. BSI Electronics promised to ship the equipment — which included a 1,000-kilowatt FM stereo transmitter and a 50-meter RF cable — as soon as it received payment from Touch FM. The agreed amount was 3,500 Euros for the transmitter, 500 Euros for the RF cable, and an additional 1,000 Euros for insurance and shipping from Nice, France to Nairobi, Kenya. Touch FM made the payment promptly. The payments were made electronically to BSI Electronics' bank account, and receipt of payment was confirmed.
The consignment arrived in Nairobi a week later, but the RF cable was missing. A dispute arose between BSI Electronics, Touch FM, and the shipping company. Touch FM claimed that the full shipment had not arrived; BSI Electronics maintained that they had shipped the complete package; and the shipping company held that the cable was never submitted for shipping. In addition, Touch FM claimed they had ordered a stereo transmitter but received a mono transmitter instead. Touch FM felt shortchanged and established grounds for compensation from BSI Electronics. The company took legal action by engaging lawyers. However, BSI Electronics went quiet on the matter, failing to respond to calls or emails from the lawyers and entirely disregarding requests to address the issue.
Touch FM later approached the French Economic Mission (FEM) based in Nairobi, Kenya, to help resolve the dispute. The FEM established contacts but failed to negotiate successfully with BSI Electronics, leading to the blacklisting of BSI Electronics. BSI Electronics stood their ground, blaming Touch FM of mischief, and remained unresponsive. None of the parties involved has ever resolved the issue.
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