Arbitration, a form of Alternate Dispute Resolution (ADR)

Module 2: Assignment 4: Arbitration

Arbitration, a form of Alternate Dispute Resolution (ADR), is a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the "arbitrators", or "arbitral tribunal"), by whose decision (the "award") they agree to be bound. It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides.

Arbitration is a very common approach for resolving international commercial or domestic disputes, and a number of international organizations have been established for doing this. Each of these bodies has its own procedures for arbitration which avoids the problem of one country having different procedures from another, thereby creating a conflict over which jurisdiction should hear a case.
It is common for international and domestic contracts to mandate that arbitration be used to resolve any disputes that arise. Sometimes, the contract specifies that one of these bodies be used. At other times the procedures to be used for such arbitration are spelled out in the initial contract itself.
While mediation also provides some of these advantages, it is a cooperative process, not an adversarial one. If the parties are so angry with each other that they cannot communicate effectively, even with help, or cannot cooperate at all, arbitration is usually more effective than mediation. It is also more effective when the problem involves the determination of facts or interpretation of law.
Among the available dispute resolution alternatives to the courts, arbitration is by far the most commonly used internationally. While several mechanisms can help parties reach an amicable settlement all of them depend, ultimately, on the goodwill and cooperation of the parties. A final and enforceable decision can generally be obtained only by recourse to the courts or by arbitration. Because arbitral awards are not subject...