Arbitration

Why opt for arbitration?

Arbitration is a private judicial hearing, a form of alternative dispute resolution (ADR).  A legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more personas (the 'arbitrators", or "arbitral tribunal"), by whose decision (the "award") they agree to be bound to.  It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides. Other forms of ADR include mediation (a form of settlement negotiation facilitated by a neutral third party) and non-binding resolution by experts.  Arbitration is often used for the resolution of commercial disputes, particularly in the context of internal commercial transactions.  The use of arbitration is also frequently employed in consumer and employment matters, where arbitration may be mandated by the terms of employment or commercial contracts.

Arbitration can be either voluntary or mandatory (although mandatory arbitration can only come from a statute or from a contract that is voluntarily entered into, where the parties agree to hold all disputes to arbitration, without knowing, specifically, what disputes will ever occur) and can be either binding or non-binding.  Non-binding arbitration is, on the surface, similar to mediation.  However, the principal distinction is that whereas a mediator will try to help the parties find a middle ground on which to compromise, the (non-binding) arbitrator remains totally removed from the settlement process and will only give a determination of liability and, if appropriate, an indication of the quantum of damages payable.

Arbitration is a proceeding in which a dispute is resolved by an impartial adjudicator whose decision the parties to the dispute have agreed, or legislation has decreed, will be final and binding.  Arbitration is not the same as:

• judicial proceedings, although in some jurisdictions, court proceedings are sometimes referred as arbitrations
• alternative dispute resolution (or ADR)
• expert determination
• mediation