While still avoiding litigation, the arbitration process enables a third party to oversee a disagreement and provide a solution.
Arbitration is a form of alternative dispute resolution, similar to mediation in that you have two or more parties, each with the option to have an attorney on-hand. There’s also one or more objective third parties known as an arbitrator or arbitral tribunal.
The arbitration process is similar to the process used in court. Each party presents their argument and at the conclusion of the proceedings, the arbitrator or tribunal will make a legally binding decision, just as a judge or jury would do. The parties typically agree to be bound by the arbitrator’s decision (although non-binding arbitration does exist).
While a mediator works to help both parties arrive at a compromise, an arbitrator simply evaluates both arguments and determines which argument has more merit.