What is meant by Arbitration in Law
Arbitration in law is considered a civil court. The parties that are having some dispute or disagreement among them seek some process that is as legal and significant as court but not exactly a court process.
Arbitration helps the two disputing parties in bringing their matter towards a peaceful conclusion. The final decision made by the arbitration panel resolves the dispute between the conflicting parties.
Arbitration Process
Arbitration in law is a private dispute resolving process outside the courtroom and trials. The two disputing parties on choosing an arbitrator (who arbitrates their case) provide evidences and testimonies by their sides.
Arbitrator listens to both the sides and on the basis of evidences and listening, he then makes a final decision that is binding, which means that both the disputing parties have to adhere to this final decision in order to get the dispute resolved.
It is a very prominent and legal dispute resolution process in the US, and the final binding decision is considered to be a legalized resolution and is upheld in every court of the US. Therefore, it is much embraced by the people and they prefer it over the court process.
What is the Purpose of Arbitration in Law?
Arbitration in law has a sole purpose of resolving the dispute outside the court. It is preferred by the parties over the court litigation for the reason that it is less expensive and less time consuming than the court process. It is a private yet legal process of resolving the disputes, and the US courts do not meddle in the arbitration process, rather protect the arbitration under law.
Who is an Arbitrator?
A neutral third party having a command on the lawful proceedings and is expert in arbitrating helps the two disputing parties to agree on a finalized decision made by this third party who is known as an ‘arbitrator’ or ‘arbiter’.
The arbitrator is selected by both the conflicting parties after a joint agreement. The word neutral means that the arbitrator is supporting none of the two parties, therefore, honestly plays his/her role in arbitrating the matter.
How does an Arbitrator arbitrate?
The decision made by the arbitrator is final and undeniable, once all the evidences have been taken and the whole matter is gone through. The conclusion proposed by the arbitrator is binding on both the parties independent of their agreement or disagreement on this.
Therefore, to arbitrate a dispute, there must have to be an arbitrator who will be given the authority to conclude the matter with a hope of setting the dispute without having to spend time and wealth on court proceedings.
Why is Arbitration more Viable than Court Process?
Arbitration though follows almost same rules and litigation procedure, is considered to be a more feasible, cheaper and less time consuming process of resolving the disputes as compared to the court process
Arbitration is also termed as civil court through which the disputes can be resolved outside the court, judges or lawyers. However, an arbitrator is more like a judge who arbitrates the case with evidences and testimonies. He then proposes the final decision that is binding on both the parties under dispute.
How is Arbitration different from Mediation
Mediation is sometimes called as an alternate word for arbitration. However, both the terms are a bit different in their procedure. In fact, arbitration and mediation are the two modes of Alternative Dispute Resolution (ADR).
Arbitration is different from mediation for the fact that the arbitrator has the authority to make a final decision about the dispute and the disputing parties are subjected to accept it.
On the other hand, mediation is more like a friendly agreement. The mediator does not have authority to make a decision that is binding. However, a peaceful agreement is made between the two disputing parties through the help of a mediator.
Comparison between Arbitration and Mediation
- Both are the prominent modes of ADR.
- Both help in resolving the disputes between the two parties through the help of a third party which is given this task on a joint agreement or with the consent of both the disputing parties.
- Arbitration is formal while the mediation is informal. The decision made by the mediator is consensual and agreed by both the parties.
- Though Arbitration is cheaper and faster than the court litigation, mediation is even more cheaper and faster than arbitration.
- Mediation is more similar to negotiation, while arbitration is more similar to court litigation.
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