What is Arbitration in Law & How it works

Arbitration in Law

Arbitration in law holds significant importance for the people who do not want to expose or solve their matters by bringing them into public, instead, they try to solve their matters personally. This method of resolving issues personally is called arbitration in law.

For example, if two parties A and B have a dispute over a piece of land, and they want their matter to be solved quickly and they also want it to be resolved in private instead of a public courtroom, they will select the process of arbitration.

 

What is the process of Arbitration?

In choosing arbitration as a solution to your issue, a proper process is adapted. To do that, both parties agree on choosing an impartial arbitrator who will give the final verdict to which both the parties will have to agree no matter what the decision is.

The next step is to select a neutral environment for the proceeding of the process, so that the other party may not have any objection or may not accuse the first party to have the advantage of home-court.

Sessions will be set in which both parties will present their evidence. The arbitrator will look deeply into the point of view of both parties and will take a decision engaging both parties. You can avoid yourself all this trouble simply taking the help of a law office before time. 

The decision of the arbitrator will hold legal significance and in case if the other party refuses to accept the decision of the arbitration, the first party is allowed to knock at the door of the legal courtroom and show them the arbitration certificate awarded to them and claim their right and the courtroom will make sure that their rights are fulfilled and decision of the arbitration is considered.

 

What is an Arbitrator?

An arbitrator is a person or group of people selected for the resolution of the matter between the two parties. An arbitrator has a hold over the legal proceedings and all the rules, and takes decisions impartially and keeping in view the point of view of both parties.

The main job of an arbitrator is to decide without any stress from any party. In addition to making a decision, the arbitrator is also expected to proceed with arbitration in a neutral environment so that no party is expected to have an advantage of the home-court. 

 

Who selects the Arbitrator?

Arbitrators are selected by both parties with cooperation. Let’s say that two parties have a dispute and they are unable to resolve it on their own and also do not want to prolong their dispute, and they decide to call upon arbitration for the settlement of their matter and end up calling a tribunal of arbitrators consisting of five people who will settle the issue.

Both parties will be allowed to select two arbitrators of their own choice and one arbitrator will be selected by mutual consent. Both parties must be willing to surrender their issue completely to the arbitration panel. The arbitrators may be selected by both parties or may also be defined by arbitration institutions.

 

Arbitration is a Confidential Procedure

Arbitration is a private matter of both parties and it is important to keep the verdict private before revealing the decision publicly. As the arbitration process was selected to avoid public dealing, it is the right of both parties that their matter and its proceedings are kept private.

In some cases, information of one party can also be kept hidden from the other party for avoiding more conflicts. Let’s say there is an issue with ownership of bail bonds, this will remain between the parties and the arbitrator. 

 

Are the terms Mediation and Arbitration the same?

Mediation may be used in terms of arbitration i.e., it is the synonym of arbitration but in some terms, mediation slightly differs from arbitration. Mediation and arbitration are two different modes of Alternative Dispute Resolution (ADR).

Talking about mediation, it is a way more friendly agreement between the two parties but the mediator i.e., the one who is selected to resolve the issue does not have the authority to impose his decision on both parties. He can suggest but cannot impose.

Whereas on the other hand, the arbitrator has legal authorities to impose his rules and his decision on both parties. Any party does not have the authority to disobey his decision.

In case if one party refuses to accept the decision, the other party will have an option of taking the certificate issued by the arbitrators to court and can claim their right

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