Arbitration is a private dispute resolution mechanism whereby parties agree to submit their disputes to one or more neutral arbitrators, whose decision—known as an arbitral award—is binding and enforceable. It serves as an alternative to traditional litigation and is often preferred for its efficiency, confidentiality, and flexibility.
Arbitration can be ad hoc—where parties design their own procedure—or institutional, governed by the rules of organizations such as the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA), or the Singapore International Arbitration Centre (SIAC). These institutions provide administrative support and a pre-established framework for conducting proceedings.
A key feature of arbitration is party autonomy. Parties can agree on the number of arbitrators, the language and seat of arbitration, applicable law, and procedural rules. This control over the process is one of the most attractive aspects of arbitration, particularly in international commercial disputes.
The arbitration process typically includes the following stages: initiation of arbitration (often by a notice), constitution of the tribunal, preliminary hearings, exchange of pleadings and evidence, hearings, and the issuance of an award. The final award is legally binding and enforceable in many jurisdictions under international treaties such as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958).
Unlike court proceedings, arbitration is generally confidential, which helps preserve business relationships and protect sensitive information. It also tends to be more expeditious and cost-effective, although high-value disputes involving international parties can become complex and expensive.
Most legal systems now support arbitration through legislation—for example, the Arbitration and Conciliation Act, 1996 in India—which regulates both domestic and international arbitrations. Courts generally have a minimal role, intervening only in limited circumstances such as appointment of arbitrators, grant of interim relief, and enforcement or setting aside of awards.
In conclusion, arbitration has become a vital component of modern dispute resolution, particularly in commercial, construction, and international trade contexts. Its growing popularity reflects the global demand for more efficient and party-driven mechanisms to resolve complex disputes outside the constraints of conventional litigation.
