Arbitration is a form of alternative dispute resolution where parties in conflict agree to present their cases to a neutral third-party arbitrator or panel of arbitrators whose decision is legally binding and enforceable. It provides a private alternative to litigation through the court system.
In arbitration, the parties select an impartial arbitrator with expertise in the dispute’s subject matter is an expert in the dispute’s subject matter. They agree to abide by the arbitrator’s final determination after reviewing evidence and hearing arguments from both sides during an arbitration hearing. Unlike litigation, arbitration proceedings tend to be shorter and more informal while following appropriate rules and procedures.
One of the major advantages of arbitration is its efficiency. It is generally faster and less expensive than going to court. Unlike public trials, arbitration allows parties to keep their disputes private and confidential. The ability to choose expert arbitrators who specialize in the issues at hand provides a more technically sound resolution in complex cases.
Arbitration awards are legally binding with very limited grounds to be overturned or challenged in court. Many contracts today contain arbitration clauses requiring disputes to go through this process instead of court litigation. While arbitration limits certain legal processes like extensive discovery or appeals, it provides a streamlined and efficient means of alternative dispute resolution, ensuring the finality and security of the awards.