Arbitration is a form of alternative dispute resolution that takes place outside the normal Judicial Court system. Arbitration typically involves a neutral third party (Arbitrator) who listens to the evidence and arguments of each party and renders a decision on the matter. The fact that a decision is rendered by the Arbitrator is a principal difference from mediation where the parties control the outcome. There are several different forms of Arbitration depending on statute, contract or agreement of the parties.
Arbitration has been around for thousands of years and pre dates most legal systems in use around the globe today
Due to the fact that the Arbitrator makes a decision on the case, as opposed to a mutual agreement, there are a lot more rules and procedures which must be followed to ensure all the facts are presented in an orderly and timely manner.
Arbitration does not replace the existing Judicial system, it is designed to complement it and provide an alternative which is most cost effective and time constraint driven.