To understand Arbitration, one must first understand Alternative Dispute Resolution (ADR). ADR is exactly what its name suggests. For people who don’t want to go through the process of court to resolve a dispute can go for ADR. It is basically a process of resolving dispute without approaching the court. There are several methods of doing the same such as mediation, conciliation, negotiation, etc. Arbitration is one such method.  

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Arbitration is a process by which the parties in disagreement settle the dispute by appointing one or more arbitrators to hear and decide upon their matter without actually going to the court.

Elements of Arbitration

Arbitrator- A person appointed to settle the dispute by examining the facts, witnesses and evidences of the case.

Arbitral Tribunal- It refers to the panel of arbitrators who adjudicate the case and decide the arbitral award.   

Process of Arbitration

Usually, most contracts or agreements have a clause that states that in case of any disputes, the settlement shall be made through arbitration. Even if such a clause is absent, arbitration can be taken up if both parties agree. The process of arbitration involves- 

1. Request to arbitrate- The process usually begins with one of the parties sending a request to arbitrate to the other party.
2. Choosing the arbitrators- The parties are free to decide the number of arbitrators in the tribunal. However, if they fail to agree on the number of arbitrators the tribunal shall have a single arbitrator. If a three-member tribunal is to be appointed, both the parties shall appoint one arbitrator each who will in turn decide the presiding arbitrator
3. Statement of Claim-After the appointment of arbitrators, the aggrieved party shall file a statement of claim which is a document containing the reasons and circumstances leading up to dispute. The opposite party can counter it by filing counter claim. 
4. Arbitral Award- The hearing process starts. After all the parties put forth their points, defenses, evidences and witnesses, the tribunal shall give its decision. Such a decision is known as arbitral award. If the award has to be executed, the favored party shall file for enforcement of award.

The decision of the arbitral tribunal shall be binding on both the parties as well as enforceable just like the decrees by courts. Also, the intervention from courts is minimal. 

Benefits

Economical- Arbitration is considered to a cheaper mode of justice provided the cost of arbitrator is reasonable.

Less time consuming- The time consumed in arbitration is much less than litigation as there is limited scope of appeal.  

Reliable- Since the arbitrators are appointed by the parties themselves, they have better confidence and reliability decision passed. 

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