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What is Arbitration
Arbitration is a legal alternative to a business-related dispute that usually entails a fraction of the time and money of litigation. Arbitration does not go through the judicial system. Both parties agree to recognize an arbitration panel as a legal authority, and agree that the decision is legally binding. If the losing party fails to pay the award amount, the winner can transfer the decision to a court, which will enforce the award judicially.
Benefits of Arbiration
- Saves time.
- Saves money.
Pitfalls of Arbitration
- Not ideal for big disputes.
- Arbitrators are not legal experts.
- Recovery may be difficult and the winning party still may end up in the court.
- Some of the resolutions may be unfair but the losing party is contractually obligated to honor them.
- Arbitrations cannot be appealed.
