Arbitration – Explained

Cite this article as: Jason Mance Gordon, "Arbitration – Explained," in The Business Professor, updated January 7, 2015, last accessed April 8, 2020,
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Overview of Arbitration
This video provides an overview of arbitration and how it is used to resolve legal disputes.

Next Article: Advantages of Arbitration


What is “Arbitration”?

Arbitration is a form of ADR in which the parties choose to forgo litigation and solve their problems through a third-party decision maker, known as an “arbitrator”. The key characteristic of arbitration is that the parties are hiring one or more unrelated and unbiased third parties to decide the legal dispute. Basically, the arbitrator(s) acts as judge and jury in deciding the dispute. Unlike in mediation, the arbitrators are decision makers. Arbitration yields a final resolution of the dispute in the form of an arbitrator’s “award”. The award generally consists of monetary damages, but may include equitable remedies as necessary. Parties may generally enforce an arbitrator’s award similarly to a judgment.

  • Note: It may surprise you to know that popular reality court television shows are actually arbitrations, as opposed to trials. The proceeding is made to look like a trial proceeding, with the arbitrator acting like (and even taking the title of) a judge.

Discussion: How does the core principle behind arbitration compare to that of mediation? (Hint: Think about the role of a decision maker versus that of a facilitator).

Academic Research

Chandrasekher, Andrea and Horton, David, Arbitration Nation: Data from Four Providers (August 24, 2018). California Law Review, Vol. 109, 2019, Forthcoming. Available at SSRN:

Stipanowich, Thomas, Reflections on the State and Future of Commercial Arbitration: Challenges, Opportunities, Proposals (November 4, 2014). Columbia American Review of International Arbitration, Vol. 25, 2014; Pepperdine University Legal Studies Research Paper No. 2014/29. Available at SSRN:

Strong, S.I., Past As Prologue: Arbitration as an Early Common Law Court (March 22, 2019). 57 Houston Law Review__ (2020, Forthcoming); University of Missouri School of Law Legal Studies Research Paper No. 2019-05. Available at SSRN:

Horton, David, Arbitration About Arbitration (March 19, 2017). Stanford Law Review, Vol. 70, February 2018. Available at SSRN:

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