Arbitration is the third component of Alternative Dispute Resolution where the disputing parties come up to a decision to have an arbitrator to settle their problem instead of going to court. It is an alternative to court solution agreed by both parties and the arbitrator will be the deciding agent.
Part of the general principles of arbitration is obtaining a fair resolution of conflicts by a third party which is the arbitrator, without additional expense or delay. Arbitration which is also called the businessman’s method of settling the dispute is governed by the state. It means that there’s a process to which the dispute should be settled using Arbitration.
Now, why do most businessmen choose arbitration over anything else? Here, we will give you the advantages of arbitration and why people choose it to settle their disputes.
One of the best characteristics of the arbitration process is you don’t need to spend a lot of money to settle the dispute. The cost is much lower than the litigation process. It is more commercial and less formal than the court and can be cheaper and flexible as well. It costs less than court because it does not require many legal preparations and it does not include witnesses. No need to hire experienced lawyers that are very expensive. But of course, if one decides to have a lawyer for his expertise then that will be fine. It’s also much cheaper because the cost of the arbitrator is usually split between both parties.
Unlike court proceedings, the arbitration process is usually quick. You don’t have to worry about waiting for the trial date or rescheduling because of uncertain events. Court proceedings usually take longer and when you say longer, it can take up to 18 months to years. And that is why most prefer the arbitration process instead.
If you want to avoid scandals or rumors and want the issue to be silent, confidentiality is one of the pros of arbitration. You get to settle the issue between both parties not needing the presence of a witness or other people wanting to peek on what is going on. The arbitration process is held in private and there is an agreement by both parties to keep the proceedings confidential.
Arbitration hearings can be scheduled depending on the needs and availability of both parties. Unlike court trials in which the court calendar is usually overcrowded, the arbitration proceeding may be adjusted based on the availability of both.
The word itself already explains it. Most settlements result in an agreeable outcome. Both parties are encouraged to come up with a solution that they think is beneficial for them. What is nice about this advantage of arbitration is that both parties can work peacefully to resolve their dispute. The decision is made with both agreeing on the outcome. Now that’s what peace talk is all about.
This simply says that the arbitration process is much simpler than court hearings. With this process, you don’t need to worry about being in the hot seat during the trial. It’s one of the beauties of arbitration is that there are no hearings and you get to choose the deciding agent. You also get to decide who to call as a witness and the need for what documents must be produced is usually made by a simple phone call. It really is simple.
The finality of the decision in arbitration comes with either binding or non-binding. The difference between these two is that “binding” in arbitration means that the decision made by the arbitrator is already final. And that the decision may not be reversed by the court except in very limited circumstances. The court may review the decision if found that there is a misuse of power or fraud has been involved. Non-binding arbitration, however, is if the other party rejects the decision of the arbitrator and decides to have a trial instead. In this case, the arbitrator’s decision can only be final if accepted by both parties. It may be much better than the binding arbitration since in non-binding, both parties get a chance to either accept the decision.
There we have the advantages and benefits of arbitration and the reasons why most people decide to have this process instead of court. However, every individual has his own decision on how to settle the dispute. The arbitration process is usually chosen by most people because it is much cheaper and the result is faster. But it is best to have an idea of what is arbitration is all about including its pros and cons before deciding to go for it.