Related Terms
Settlement of a dispute (whether of fact, law, or procedure) between parties to a contract by a neutral third party (the arbitrator) without resorting to court action. Arbitration is usually voluntary but sometimes it is required by law. If both sides agree to be bound by the arbitrator's decision (the 'award') it becomes a binding arbitration. The exact procedure to be followed (if not included in the contract under dispute) is governed usually by a country's arbitration laws, or by the arbitration rules prescribed by the International Chamber Of Commerce (ICC).

Use 'arbitration' in a Sentence

In order to finalize their divorce, the couple had consented to arbitration to divide up their personal possessions, investments and assets.
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They couldn't solve their contract dispute, so they took their argument to arbitration, and agreed to follow whatever the arbitrator said.
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Jack and Joe could not resolve their differences but did not want to go to court; so they decided to go through the arbitration process and accept the decision of a neutral third party.
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