Arbitration is a process between two disputing parties that acts as a resolution method outside of the court of law. Arbitration can be faster and more cost-effective than the process of litigation.
In addition to the two disputing parties, the arbitrator(s) (one to three individuals)—the neutral party who will decide the outcome—will be involved in the process. The parties get to choose their arbitrators from a list of qualified and impartial individuals.
Everyone involved in the process will have to show up to an “arbitral seat,” a venue where these kinds of hearings can occur.
Here is what the arbitration process will typically look like:
To begin the process, a file for arbitration will need to be submitted. This file will have information on the dispute, including a timeline and details of events relevant to the claim. Additionally included will be solutions the claimant is expecting from a resolution.
Next, the claimant must wait for a response from the other party. The second party must respond with their side of the story and with defense.
Moving forward, both parties will receive a list of arbitrators they can choose as their panel for the hearing.
Once the arbitrator(s) are selected, they will consult with each party to get more information, resolve any issues before the hearing, and schedule a date.
Parties will present the necessary documents and necessary information for the hearing.
Finally, on the scheduled date, both parties must be present in person. Then, they state their respective cases and provide evidence for their arguments in front of their selected panel.
Once the hearing concludes, the arbitrator(s) will take some time to deliberate and come up with a decision. With these hearings, this final decision is called an award. Whatever the outcome, both parties must cooperate with the award.
Before leading to these steps, any time before the hearing, parties can opt-in for mediation instead of going through the arbitration process. Mediation involves a trained, impartial individual who facilities the negotiations.
Arbitration can resolve commercial disputes, employee and employer disputes, tenant/landlord issues, and similar cases. Essentially, an arbitration hearing works when a case involves a monetary dispute between two parties without any criminal offenses, like foreclosure. It’s important to learn more about foreclosure so you know what your options are.
Any matters that fall under family law, criminal law, or immigration law cannot be arbitrated.
There are pros and cons of using this method of hearing vs. going to the judiciary process.
Once an arbitrator grants the award, it is legally binding, and in most instances, final. Awards can include a combination of money, ordered injunction, and relief from pending liabilities.
Once granted, there can be clarification for both sides, clerical errors and other minor errors corrected. Then finally, the party receiving the award can begin the proper steps to collect it.
If legally possible, both parties can pursue an annulment. However, there are only a few very rigid requirements that may allow for an annulment to take place:
Arbitration is a hearing that resolves disputes outside of criminal, immigration, and family law. The process involves presenting both arguments and respective evidence to a neutral party. From here, they make a decision called an award. In most cases, the award is final.
There are advantages and disadvantages of using this process over a court trial. Before pursuing this option, individuals may want to consider mediation or court trial.
If you’re currently dealing with arbitration, or any other financial hardship and you need some extra cash, learn more about bad credit loans.
Arbitration Frequently Asked Questions
American Arbitration Association
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