Adjudication, mediation, mediator, negotiation, conciliation, intervention

ADR | Alternative Dispute Resolution | Procedure

What is Arbitration? 



Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.

Arbitration can only take place if both parties have agreed to it. In the case of future disputes arising under a contract, the parties insert an arbitration clause in the relevant contract. An existing dispute can be referred to arbitration by means of a submission agreement between the parties. In contrast to mediation, a party cannot unilaterally withdraw from arbitration.

The parties choose the arbitrator(s)

 Arbitration is consensual

The parties can select a sole arbitrator together. If they choose to have a three-member arbitral tribunal, each party appoints one of the arbitrators; those two persons then agree on the presiding arbitrator.

Alternatively, the Arbitration Center can suggest potential arbitrators with relevant expertise or directly appoint members of the arbitral tribunal.

Arbitration is neutral

In addition to their selection of neutrals of appropriate nationality, parties are able to choose such important elements as the applicable law, language and venue of the arbitration. This allows them to ensure that no party enjoys a home court advantage.

Arbitration is a confidential procedure

The Arbitration rules specifically protect the confidentiality of the existence of the arbitration, any disclosures made during that procedure, and the award. The decision of the arbitral tribunal is final and easy to enforce. The parties agree to carry out the decision of the arbitral tribunal without delay. International awards are enforced by national courts under the New York Convention, which permits them to be set aside only in very limited circumstances.

At its core, arbitration is a form of dispute resolution. Arbitration is the private, judicial determination of a dispute, by an independent third party. An arbitration hearing may involve the use of an individual arbitrator or a tribunal. A tribunal may consist of any number of arbitrators though some legal systems insist on an odd number for obvious reasons of wishing to avoid a tie. One and three are the most common numbers of arbitrators. The disputing parties hand over their power to decide the dispute to the arbitrator(s). Arbitration is an alternative to court action (litigation), and generally, just as final and binding (unlike mediation, negotiation and conciliation which are non-binding).

General principles of arbitration are as follows:

The object of arbitration is to obtain a fair resolution of disputes by an impartial third party without unnecessary expense or delay.

Parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest.

Courts should not interfere.Arbitrators, or Tribunal members, are commonly appointed by one of three means:

  1. Directly by the disputing parties (by mutual agreement, or by each party appointing one arbitrator)
  2. By existing tribunal members (For example, each side appoints one arbitrator and then the arbitrators appoint a third)
  3. By an external party (For example, the court or an individual or institution nominated by the parties)

Classifications Of Arbitration.

  1. Commercial Arbitration is the most common of disputes. Just as it sounds, it is a dispute between two commercial enterprises. Commercial arbitration is a means of settling disputes by referring them to a neutral person, an arbitrator, selected by the parties for a decision based on the evidence and arguments presented to the arbitration tribunal. The parties agree in advance that the decision will be accepted as final and binding.International commercial arbitration is an alternative method of resolving disputes arising out of commercial transactions between private parties across national borders that allows the parties to avoid litigation in national courts. This guide identifies the best tools for locating primary sources for international commercial arbitration research, including treaties, national legislation, arbitration rules, arbitral awards, and court decisions. It also covers secondary sources, which are essential for thorough research.
  2. Consumer Arbitration surrounds disputes between a consumer and a supplier of goods or services. 

    Most consumer arbitration agreements contain clauses that disallow arbitrationon a classwide basis. These clauses, which have the effect of preventing parties from seeking relief on a classwide basis in either court or arbitration, are commonly referred to as “class action waivers”.

  3. Labor Arbitration involves the settlement of employment related disputes. 

    Labour matters in the UAE are governed by Federal Law No. 8 of 1980 Regulating Labour Relations as amended by Federal Laws No. 24 of 1981, No.15 of 1985 and No.12 of 1986 (the “Law”). There are special labour related regulations applicable in some of the free zones in the UAE, such as the Jebel Ali Free Zone.

    According to Article 3 of the Law, the Law applies to all staff and employees working in the UAE, whether UAE nationals or expatriates. However, there are certain categories of individuals who are exempted from the Law as listed below:

    Staff and workers employed by the federal government, government departments of the member emirates, the

    municipalities, public bodies, federal and local public institutions and those staff and workers employed in federal and local governmental projects.

    Members of the armed forces, police and security units.

    Domestic servants.

    Agricultural workers and persons engaged in grazing .

  4. Construction Disputes. 

    Disputes between a contractor or a construction company and a customer are all too common. Disputes often arise out of delays in getting the work done, unsatisfactory work or delayed/disputed payments. 

    Construction disputes are fairly common, and they vary in their nature, size, and complexity

    Construction disputes, when not resolved in a timely manner, become very expensive – in terms of finances, personnel, time, and opportunity costs.

    Resolving construction disputes

    Most construction contracts set out the manner in which disputes are to be resolved. The typical construction contract calls for the use of a means other than litigation, such as arbitration or mediation, to resolve disputes arising under the contract.


    Many construction contracts require that disputes arising under the contract be resolved by arbitration. In addition, many courts will order that a case be submitted to arbitration before allowing it to come to trial. Arbitration is like a trial, except that it is usually much less formal. The dispute is heard by one or more arbitrators, who are selected from a panel of neutral arbitrators. Depending on the local practices and rules, the arbitrators may be attorneys or people with expertise in the construction industry. The arbitrators act like a judge, in that they hear the case and make a final decision based on the evidence presented.

    Arbitration may be made binding on the parties, if they so agree. Many construction contracts do require binding arbitration, and if you sign such a contract without removing that provision, you will be deemed to have agreed to binding arbitration. The courts will not overturn the order of an arbitrator in binding arbitration unless the arbitrator made a decision that completely lacked any legal foundation.

  5. Real Estate Disputes. 

    Real estate disputes lead to big, expensive problems. Whether you are an individual purchasing your dream home or a Minnesota business entering into a commercial real estate lease, some of the most common real estate disputes can be avoided with protection from carefully drafted contracts.

    For instance, imagine a dispute where the seller disclosed the basement leaked a half an inch and the realty is the basement fills to 4 feet in the winter.

    Or the homeowner did not disclose that the septic system is on the neighbors property.

    The landlord and tenant are fighting over the security deposit.

    This Small Claims process is quick, cost effective, and timely. In addition many small claims courts may have a panel of mediators available to act as a mediator or neutral.











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