Arbitration and Its Process: All You Need to Know

Arbitration and Its Process

What is arbitration?

Arbitration is a form of dispute resolution that has a contract based binding nature. It is one of the conflict resolution options that is present other than litigation. In simpler terms arbitration is carried out by a third party to resolve a dispute between two parties. However, arbitration should not be confused with mediation which is simply a form of negotiation. Arbitration has a legal binding  and a party’s right to apply for arbitration depends upon the kind of agreement that they had initially decided upon. Normally the right for arbitration is agreed upon during the times of setting up a contract and how disputes within those contracts must be resolved. However, parties may also enter an arbitration agreement even after a dispute has arisen. As for how long does arbitration take, might depend upon the nature of the conflict.

When entering into an arbitration agreement, the involved parties must lay down some basic clauses and rights. They might agree to refer their issue to a neutral third party and get it resolved. Unlike a mediation the outcomes of the arbitration must be accepted by both parties as the arbitrational tribunal has the power to bind these parties to their decision.

Arbitration or Litigation?

arbitration agreement

One of the reasons why arbitration is typically considered more attractive compared to litigation is the fact that it is typically easier to enforce. This implies that a court judgment may not go through many twists and turns before any final decision. Even after the final decision, many times there may be re-appeals.In contrast the arbitrary agreement has a binding nature. Arbitration generally doesn’t take a lot of time and money unlike litigation. However both of them have their own merits and problems, so before spending over either you must consider what would prove to be more beneficial for you.

Process of Arbitration

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For the process of Arbitration to occur there must be some sort of initiation. Whether it was already mentioned in the contract or both parties decided on it at the time of the conflict. The arbitration agreement would generally include the information of what is the tribunal comprised of, how will the arbitrators be selected, where will the arbitration take place,  where will the legal seat be and what are the rules that will be followed for this particular arbitration.

These factors will be thoroughly considered by both parties and they would generally impact the time and cost of the overall process. Once the arbitration tribunal has been selected along with the place and time, both the parties will be given the right to present their side with evidence. Mostly each party would produce a written submission for their case along with the written statements of the witnesses. All relevant documents would be submitted and the hearing would involve both parties to present their lawyers to put forward their cases. Depending upon the nature of the case, the hearing might take days to weeks. Generally an arbitration is much less time consuming compared to court hearing and the issue can be resolved as early as one day. Afterwards the tribunal will produce their award and the decisions will be issued. Challenging and appealing an award may be a rare occurrence unless the tribunal made any error of law. In such cases, a party may go to the court in order for the award to be set aside and make a new proper decision.

Most of the time, the award of an arbitration is enforced without having to rehear the issue. Though the enforcement may depend upon many other factors. This implies that the execution of an award should not be against the state and that the prospect of enforcement is considered at the outset of any dispute. Litigation may be more dependent upon various laws and statutes of the court that it is bound to but that doesn’t imply that arbitration is any less binding. In fact it is simply just more private.


Arbitration is generally a more private method of conflict resolution between two parties. It is usually more time and cost effective compared to litigation. However depending upon the nature of your conflict you may need to choose which is more effective for your rights. Before deciding on arbitration, you should consider getting legal advice from an attorney and only proceed if they advise you to do so.

Article Submitted By Community Writer

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