Arbitration Essay

Arbitration is a form of dispute resolution where a binding decision is issued by a neutral person usually selected by the parties involved. Arbitration has some advantages over litigation and can be more efficient, less time-consuming, and more cost-effective. These are some of the primary reasons why businesses may choose to include arbitration clauses in their agreements. Arbitration is different from other types of dispute resolutions as the arbitrator is selected by the parties. Unlike mediation and conciliation the arbitrator not only resolves the dispute but also makes a binding decision. Arbitration disputes usually arise from a variety of business deals such as merger and acquisition, financial services, construction and infrastructure,

Disadvantages of arbitration can be that it is not appropriate in all situations. Situations where immediate relief is needed from the court. For example a landlord would not want to insert an arbitration provision in a lease because in the event of needing to evict a tenant. In which case an arbitrator does not have the power to do arbitration. The technical nature of arbitration may end up leading to delays and uncertain results. Arbitrator power is also subject to limitations as they can not order pre-emptive injunctions. These can be only granted by the state courts.. The fees for an arbitrator can be quite significant unlike court fees which may be lower. Arbitrators are paid hourly and administrative fees will need to be paid to the arbitration organization. If it is a large arbitration there may be a need to have more than one arbitrator on a panel and pay hourly. All of the arbitrators, the arbitration organization, and the arbitrator's generally require the total amount of money upfront before going to the final arbitration hearing. The party that is aggrieved may need to advance all of the fees including the fees for the other party. The other party may not be willing to put up any fees because they may not want to go to arbitration. While it is possible to receive an award of the fees for arbitration if there is such a provision in the contract it may be difficult to collect those fees after the arbitration. Discovery is generally limited in arbitration. If there is no proof in advance it may be very difficult to obtain it through the arbitration process.. Confidentiality may also be lost in the finality of the arbitration award. Arbitration confidentiality may also cause a lack of transparency which may cause the process to be subject to bias. While many arbitrators are very good there are some cases in which the losing side will sometimes feel that an experienced