Arbitration : Arbitration is a legal procedure for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons, mutually agreed upon and by whose decision they are bound. The decision of the Arbitrator is known as the "award".
Commercial disputes, arising out of International or domestic commercial transactions are usually resolved through arbitrations. Apart from this arbitration is also effective in resolving labour disputes or family disputes, and also disputes between states and between investors and states.
History : The exact date as to when the first formal non-judicial Arbitraton of disputes took place cannot be ascertained. The Arbitration Act 1697 was the first of its type in England, but by then, the concept of Arbitration was already popular. The first recorded judicial decision relating to arbitration was delivered in England in the year 1610 . nternational Arbitration, is the means to resolve disputes under international commercial contracts. Online Dispute Resolution is the latest form of Arbitration that takes place online.
Advantages : Parties often seek to resolve their disputes through arbitration because of a number of perceived potential advantages over judicial proceedings:
When a dispute between two parties arise regarding some specialized matter, a person specialized in that respective field can be selected as the Arbitrator.
Nowadays people prefer arbitration because settlement of a matter through court might take a long time.
Court litigation is highly expensive.
Confidentiality is maintained in arbitral proceedings.
The arbitral award can be challenged before a court of law.
Arbitration judgments are more easily enforceable in foreign countries.
Disadvantages : However, some of the disadvantages of arbitration can be that:
The Arbitrator has to be paid his fees by the parties under dispute. It can be lengthy at times. In some cases enforcement of an arbitral award becomes a difficult task. Many a times, the arbitration proceedings are guided by personal ideals and not by law. Either of the parties concerned might try and influence the arbitrator.