Definition - Arbitration
Area of Law: Arbitration


Arbitration is an alternative process for the settlement of a dispute, whether of law, fact or dispute, between parties in conflict who have consented to participate. The process is carried out by a neutral third party, often referred to as an arbitrator, arbiter or arbitration tribunal, without recourse to a court process, although the arbitration process is formal in itself. Arbitration is normally voluntary although it can be required by law. The rules governing the formal process of arbitration are usually set out by arbitration law or the rules of arbitration.

The arbitrator's role is to review the arguments of the parties at conflict and arrive at a decision or resolution. If both parties at conflict agree to be bound by the decision of the arbitrator then this is called binding arbitration, which is legally recognised. Arbitration can also be non-binding, this being where a neutral third-party reviews the case at hand and offers a determination of liability and, if appropriate, an indication of possible damages to be awarded. Arbitration is commonly employed in commercial, consumer and employment disputes.

Arbitration is often mandated in commercial contracts or those regarding the terms of employment and the relations between employers and unions/staff associations.

Arbitration is perceived as a speedy, more private and less expensive method of resolving disputes although the process can, at times, become highly complex and there are limited means of appealing a decision.

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Arbitration Specialists