Meaning of Arbitration
As a form of alternative dispute resolution (ADR), arbitration allows parties to resolve their disputes in a private and legally binding manner outside of traditional court systems. An arbitral award is a binding decision made by a neutral third party, known as an arbitrator after the parties submit their dispute to them.
The purpose of arbitration is to resolve disputes in a less formal and more flexible manner than litigation. Parties can determine their own decision-maker, the procedural rules, and the governing law. Arbitration is suitable for a wide variety of disputes, including international, contractual, employment, and construction disputes.