Originally from AAA/ICDR Handbook on International Arbitration Practice

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Whether you are a new or seasoned attorney recently introduced to the en vogue dispute resolution realm of arbitration, it is important to understand the arbitral process and especially its differences from litigation. As an attorney who works as an international case manager at the International Centre for Dispute Resolution (ICDR), a division of the American Arbitration Association (AAA), I often meet attorneys who misunderstand the arbitral process. The failure to possess even a general understanding of arbitration makes it a less productive, more stressful, and potentially lengthier process than necessary.

A. What Arbitration Is

Arbitration is a type of alternative dispute resolution (ADR) that results in a final, binding decision that can be appealed on only limited grounds. It is a voluntary process that requires the consent of the parties, which is usually embodied in an agreement to arbitrate entered into as part of the transaction documents or after a dispute arises.1 The process is designed to help parties avoid the high costs and lengthy delays commonly associated with the public court system.2 At the same time, arbitration is less formal than litigation, taking place in a less antagonistic, less stressful environment.3