Arbitration: definition and example
A process in which an agreed tribunal decides a dispute through an award, generally binding subject to limited challenge or appeal rights.
By Jack Butler-Kettle · Updated
Guidance for England and Wales. Check the contract, amendments and facts that apply to your job.
What it means in practice
Read this alongside section 1 of the Arbitration Act 1996.
An arbitration depends on an applicable arbitration agreement. It produces an award rather than a negotiated settlement, with limited statutory routes for challenge or appeal. Its procedure, fees and timetable differ from adjudication, and confidentiality depends on the applicable arrangements and law.
Identify the dispute clause and obtain specialist advice on proceedings. A post-signing contract review can help organise the contractual issues before that discussion.
Worked example
The facts
A subcontract contains an arbitration clause and the parties disagree about the final account.
What happens
They check the clause, applicable rules and any earlier resolution steps.
They obtain advice on appointment, costs and how the arbitration would be conducted.
What this shows
The word arbitration in a contract does not by itself explain the practical procedure or its likely cost.
Sources
- Arbitration Act 1996, s 1 (General principles). legislation.gov.uk.