Arbitration: An Alternative Form of Dispute Resolution


While litigation is the most well-known form of dispute resolution, there are many other types that businesses use to resolve issues with each other. Arbitration is one such method, having the potential to save you time and money. You can be better prepared to resolve business disputes by learning about arbitration.

What is Arbitration?

Arbitration is a formal dispute resolution method that is binding on the parties that are part of the dispute. You will bring evidence and present arguments to an arbitrator, who will make a decision on the relevant issue. Depending on the dispute, it can be on either a federal basis or state basis. It can be brought about by a contractual clause, or alternatively the Court may order you to seek arbitration.

What are its advantages?

The key advantages of arbitration are that it is quicker and cheaper than litigation. Furthermore, depending on the contract’s clause, usually you and the other party can decide on the way it is carried out. This includes choosing the individual or body who will arbitrate disputes between the two parties. Additionally, subject to the agreement, arbitration proceedings are usually confidential between the parties. Moreover, it can be an attractive resolution option when parties are in different jurisdictions.

How do I prepare for arbitration?  

Depending on the circumstances, it is best to prepare by having all the relevant material that is subject to the dispute. You should also make sure you understand the rules regarding your arbitration to make sure you are compliant. Get legal advice before initiating proceedings to place yourself in the best possible position.

Also if you are thinking about an arbitration clause, consider the fact that it is often final and can not be appealed. This is in contrast to litigation which may allow you to appeal if you disagree with a decision.

Are there alternatives?

If you are still wary of litigation, you can always try mediation to resolve your business disputes. Mediation are non-binding discussions with the other party, that is moderated by a mediator. Mediation is not binding, unlike arbitration or litigation, but can provide a more positive dispute resolution process if you are likely to continue working with the other party.


Thus, arbitration is a useful alternative to resolving disputes as compared to litigation. Keep in mind that you usually will not be able to appeal the decision. Therefore you should consider your circumstances before deciding whether it is right for you.

Want to learn more? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace.

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