Complete Analysis: What is Arbitration?

by Latisha
Arbitration -

There is a concept called ADR that has a significant role in the field of law. ADR stands for alternate dispute resolution. In simple terms, it means that in order to solve your legal disputes, you adhere to dispute solving mechanisms that are established to solve the problems outside the court. There are ADR set up for multiple types of legal disputes.

Understand arbitration with the help of an Example

For example, a family court is there to solve family disputes outside the legal setting. There are no lawyers involved in family courts, and only the aggrieved party(s) are allowed inside the court.

A similar concept has been established to solve the legal issues involved in the corporate world. This setup is known as arbitration. The concept is simple, whenever two or more party(s) (businesses) get into any legal dispute, they set up a private process to resolve their problems. The main aim of this type of setting is the businesses can steer clear of the abysmal condition of the judiciary.


1. Profit-

Litigation requires a considerable amount of time, as well as red-tapism. This all can be avoided by using arbitrators to solve your disputes. One of the main issues that businesses face to reach out to the courts is heavy delay in judicial decisions.

The cases can drag on for months and years. This delay of time leads to losses for the businesses. In order to save time and profit, businesses adhere to arbitration. Arbitration is a quick resolution mechanism that solves corporate issues in a matter of days and sometimes in hours.

2. Private process-

When the cases of corporate entities go to the courts, there is a lot of bad media publicity that leads to indirect losses to the businesses. Arbitration, being a private process, avoids all this.

All the issues and disputes are entirely covered under privilege, and there is no chance of anything going to the public. This way, businesses get to save their reputation as well as avoid indirect losses.

3. Flexible-

Arbitration is a much more flexible process than standard litigation. The parties involved in this process get to set their own terms and conditions according to what’s suitable. The parties can also decide as to how they are going to reach the resolution of the proc. Several rules of standard litigation are also not applicable to this process.

4. Choice of arbitrator-

The aggrieved parties can choose the arbitrators as per their consented choice. It means that they can choose an arbitration whom they both trust to be impartial and fair in giving the decision. There is no involvement of an actual judge in the setup.


Arbitration is a process that is gaining a lot of popularity in the present day. Businesses are now reluctant to go to court because of the reasons mentioned above. They have recognized that if they will knock on the court’s doors, they may face a lot of losses. Thus, it is always in their favor to choose the services of arbitration.