Alternative Dispute Resolution : Arbitration


Business and investment can often lead to contentious situations and difficult disputes. Conflicts are bound to happen now and then, but not every dispute between investors and stockbrokers has to be resolved by public litigation. It’s not necessary that the involved parties have to waste their time and money in getting summoned to the court. There is an alternate nonjudicial legal technique of dispute settlement, called Arbitration.

Not to be confused with filing a formal lawsuit, through an arbitration, disputes can be resolved outside the court by referring to an arbitrator or arbitral tribunal and the decision, this individual’s decision is usually final and binding, and difficult to appeal, unlike voluntary agreement in mediation. Common arbitration cases include business, commercial, real estate, ownership, and consumer disputes, family matters, legal disputes of other kinds, etc.


Following are the standard types of arbitration recognized by the Financial Industry and Regulatory Authority of USA:


One of the most commonly used arbitration technique wherein a neutral person is selected as arbitrator, whose decision is deemed as final and binding. The process is governed by the rules laid down in the arbitration agreement, or the arbitral tribunal determines the procedure. The arbitral tribunal observes the evidence and the gravity of arguments to come to a final decision. Trade controversies out of court between different countries are recognized and can be settled by international commercial litigation.


If all the measures to settle the dispute between the management and the labor unions have been exhausted, the need to involve an impartial third party for final resolution through arbitration arises. There are two significant components of labor arbitration: arbitration of rights, arbitration of interest. When a dispute over the application of an already existing labor contract arises, it’s dealt with the arbitration of rights. Whereas when a dispute arising between the labor and the management during the negotiation of a new labor contract is dealt under the arbitration of interest.


When two sovereign states are at conflict, and diplomatic negotiation is unable to resolve it, or it refers the dispute to a third party, such arbitration is called international arbitration. Numerous multilateral treaties are providing for global dispute settlement by arbitration.



Since arbitration does not take place in the court, the transcripts are not meant for public utilization records, and hence confidentiality is assured, proving beneficial for both the parties.


An arbitration unlike public litigation is cost effective and saves time since it does not involves excessive paperwork, subpoenas, many hearing and other cumbersome court proceedings.


Since an arbitrator is chosen either by the agreement of both the parties, buy an arbitrator providing agency, no single party can overpower the decision and get an arbitrator or ruling decision in their favor.


This is one of the most appealing factors for parties taking the arbitration route instead of the litigation process. Arbitrations are majorly a shorter and informal process since they follow more defined and specific timelines resulting in a quicker decision.

If you are involved in a financial conflict with another party but don’t want the hassle of court depositions and trials, you can make use of alternative dispute resolution techniques like arbitration. Although arbitration is relatively more comfortable than having to go about litigation proceedings in the court, it still has a complicated course of action, and you might need professional assistance. If so, you can seek help from an online legal service provider that also facilitates legal aid to big and small-scale businesses along with tech companies in various other sectors like intellectual property defense strategies, corporate governance, etc.


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