Understanding What Arbitration Is All About


When facing contract disputes, commercial litigation, or other civil rights cases, parties often consider the various options for resolving the issue at hand. One such option is arbitration, a form of alternative dispute resolution, which can provide a viable alternative to traditional courtroom litigation. As it can avoid a formal court case, it has become a widely utilized method for settling commercial disputes.

Similar to how a mediator can help resolve disputes between two or more parties, an arbitrator is also an excellent alternative to traditional litigation in a court of law. That’s why it’s often considered a faster and more cost-effective way to resolve disputes.

Benefits of Arbitration

The process involved in this alternative dispute resolution begins with the parties agreeing to submit their dispute to an arbitrator or a panel of arbitrators. The arbitrators will then hear evidence and arguments from both sides and make a decision, called an award, which is binding on the parties.

Cost-Effective Solution

One of the key benefits of this resolution process is that it can be a more cost-effective option than going to court. The proceedings are typically less expensive than the ones done in court, as there are no jury costs, court reporter fees, or other expenses associated with a trial. Additionally, the parties can choose an arbitrator who is an expert in the field relevant to the dispute, which can save time and money.

More Efficient Process

Another benefit of this alternative dispute resolution is that it can be a more efficient process than going to court. The proceedings here are typically less formal than court hearings, and the rules of evidence are often less strict. This can make it easier for parties to present their case and result in faster dispute resolution.

Confidentiality and Privacy

This form of alternative dispute resolution can also provide privacy and confidentiality. Court proceedings are public, meaning anyone can attend, and the proceedings can be reported. On the other hand, these dispute resolutions are typically private, meaning that only the parties, the arbitrators, and witnesses are allowed to attend. This can be beneficial for parties who want to keep their dispute and its resolution confidential.


This alternative dispute resolution is a popular choice for parties as it offers a significant degree of flexibility, which is often reflected in the contract that the parties sign. This contract could include specific instructions on appointing an arbitrator and the steps required to resolve a dispute.

Drawbacks of Arbitration

However, it also has its limitations and drawbacks. One limitation is that the parties are typically bound by the decision of the arbitrators, even if it is an unfair or unjust decision.

In contrast, parties have the right to appeal a court decision if they believe it to be unjust. Additionally, the process involved in alternative dispute resolution may be less transparent than a court process, as the parties are not entitled to the same rights to access documents or other evidence as they would be in a court of law.

Another limitation is that it may not be appropriate for all types of disputes. For example, it may not be suitable for disputes that involve a large number of parties or disputes that involve complex legal issues. In such cases, a court of law may be a better option.

Unlike other methods, this alternative dispute resolution process can come with a significant financial burden. This can include expenses such as the cost of starting the process, fees for the arbitrator, and any additional expenses that may arise during the proceedings.

When to Use It

Since it is a means of resolving commercial disputes, it can arise in different ways. One example is when parties must reach an agreement as soon as possible. They turn to this alternative dispute resolution as a means to settle their dispute since it would take a shorter time than going to court.

Count On Arbitration To Resolve Disputes

As it’s a popular form of alternative dispute resolution that can provide a faster and more cost-effective way to resolve disputes, you should check its limitations to find out if it’s suitable for your type of dispute. If you’re unsure, you can always seek the advice of experts like Cedric Chao Esq. Remember to carefully consider its pros and cons before deciding to use it as a means of resolving your dispute.

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