Arbitration is a settlement of dispute by the decision of one on more persons called arbitration. It is an arrangement for investigation and settlement of a dispute between opposing parties by one or more unofficial persons chosen by the parties.
As a rule disputes of civil nature and quasi-civil nature or those which can be decided by a civil suit can also be decided by arbitration the following matters may be submitted to arbitration.
- Any matter affecting the private rights of the parties, which can be subject matter of a civil suit may be suffered to arbitration e.g. right to hold the office of a pujari in a temple.
- Matters relating to personal rights between the parties; e.g. a question of marriage or maintenance which is cognizable by a civil court.
- Matters like the terms on which husband and wife will separate can be the subject matter of a valid reference.
- Disputes regarding complement and dignity.
- The parties may refer to arbitration the question whether judgment has been property obtained or it is erroneous or void.
- A time barred claim may be referred.
- Both question of fact and law can be referred.
- Disputes between an insolvent and his creditor can be referred to arbitration by the official assignee or receiver even though insolvency proceedings can not be referred.
For having some advantages arbitration was enacted for some purposes in Arbitration Act 2001.
- arbitration is often faster than litigation in court
- arbitration can be cheaper and more flexible for businesses
- arbitral proceedings and an arbitral award are generally non-public, and can be made confidential
- in arbitral proceedings the language of arbitration may be chosen, whereas in judicial proceedings the official language of the country of the competent court will be automatically applied
- Arbitration awards are generally easier to enforce in other nations than court judgments
- in most legal systems there are very limited avenues for appeal of an arbitral award, which is sometimes an advantage because it limits the duration of the dispute and any associated liability
- fewer enforcement options than judgments; although in the United States arbitration awards are enforced in the same manner as court judgments and have the same effect
- arbitrators are generally unable to enforce interlocutory measures against a party, making it easier for a party to take steps to avoid enforcement of member or a small group of members in arbitration due to increasing legal fees, without explaining to the members the adverse consequences of an unfavorable ruling
- rule of applicable law is not necessarily binding on the arbitrators, although they cannot disregard the law
- discovery may be more limited in arbitration or entirely nonexistent
- the potential to generate billings by attorneys may be less than pursuing the dispute through trial
- Unlike court judgments, arbitration awards themselves are not directly enforceable. A party seeking to enforce an arbitration award must resort to judicial remedies, called an action to "confirm" an award
- Although grounds for attacking an arbitration award in court are limited, efforts to confirm the award can be fiercely fought, thus necessitating huge legal expenses that negate the perceived economic incentive to arbitrate the dispute in the first place.
