There are several methods when it comes to alternative dispute resolution and negotiation. While mediation is a very common process for conflict resolution, arbitration could be considered to resolve issues between parties as well. 

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Arbitration is a binding, adjudicatory process that can be used to settle disputes and resolve issues amongst two parties in private. 

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This article will explain what arbitration is, the typical process of arbitration, and when you might choose arbitration instead of litigation, mediation or other legal processes to resolve cases. 

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What is Arbitration?

Arbitration is a private dispute resolution process in which two parties agree to submit their dispute to one or more arbitrators for a binding decision. The agreement to arbitrate is typically found in a written contract agreed to by both parties. Parties will agree to submit their dispute to arbitrators from member organizations in the American Arbitration Association (AAA). This process remains a voluntary legal procedure and separate from the court system. The Federal Arbitration Act, coupled with the case’s state arbitration law, generally governs this private dispute resolution process. 

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In this form of alternative dispute resolution, no single party directs an outcome. However, the complaining party will send the opposing party a notice of their intent to arbitrate a dispute, outlining the basis for the dispute per the rules of the contract. Arbitration mimics a courtroom trial minus the timeline and attorney involvement – evidence can be presented, arguments are made, witnesses can be called and questioned. The arbitrator or panel of arbitrators will then deliver a final ruling to both parties that is legally binding.

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