Arbitration is an alternative form of dispute resolution. Arbitration, while being nicknamed the ‘businessman’s method of resolving disputes is gaining much popularity in India.’ The object of arbitration is to obtain a fair resolution of disputes by an impartial third party without unnecessary expense or delay. . It is similar to a court process, where parties provide testimony and give evidence, as in a trial. The arbitrator hears evidence and makes a decision. However, it is usually less formal. In mediation, on the other hand, the process is a negotiation with the assistance of a neutral third party where mediators do not issue orders. Instead, they help parties reach a shared opinion and reach a settlement.

Arbitration works as under: while entering into a contract, parties agree that in case of a conflict the matter would be sought to be resolved by an arbitrator. Often the name of the potential arbitrator, agreed upon by both the parties, is mentioned in the contract itself. In case a dispute arises, the first step is issuing of an arbitration notice by either of the parties. This is followed by a response by the other party and subsequent appointment of an arbitrator, the decision on rules and procedures, place of arbitration, and language. Once the arbitration proceedings commence, there are formal hearings and written proceedings. The arbitrator, if the matter so requires, issues interim reliefs followed by a final award which is binding on both parties. If either of the parties, unhappy with the award, can challenge it before the court.