6 Advantages of Using Arbitration to Solve Business Disputes


In any type of business transaction, the possibility of commercial litigation is high. That is something you may not have anticipated in future but it can happen. So, what options do you have on the table should a dispute arise, especially if you want to avoid going to court. Arbitration may be the best alternative dispute resolution method, if all parties involved would come to an agreement.

In other words, arbitration is a paid private trial where parties involved in the case submit the dispute to a third party, who is a neutral arbitrator. Often the case will consist of document presentation and oral arguments by personal attorneys. If you’re considering to settle your dispute through arbitration, here are some of the advantages you may want to know before making that decision.

1.Quicker dispute resolution method
Unlike court procedure, which may take time to get a court trial, slowing the case, arbitration helps solve dispute much faster as it’s easy to schedule a date within a few months. Also, trials get schedule and often there will a backlog of cases in front of you. Arbitration allows both parties to schedule a date based on their availability and convenience.

2.Simple procedure unlike trials
Arbitration proceedings are somewhat different in that they’re less complicated and less expensive. Both domestic and international litigation procedure would involve preparing and filing documents, and appearing in court for hearings. Some of the rules used in court may not apply in arbitration, making it flexible and convenient to admit evidence. What is of importance with this process is who are the witness and the documents supporting your case. A lot of follow up questions and interactions will be through simple phone calls with the arbitrator.

3.Private dispute resolution
Unlike a trial that is potentially damaging to your career, brand or name, arbitration ensure dispute is resolved privately, keeping it out of the public eye. That said, all the evidence, statements, and arguments of the dispute and resolution is kept confidential. If you’re looking to keep a low profile on your contractual disputes, this may be enticing alternative for you and your business. The problem with courts is that sensitive business information may still find its way to the public, even if the documents are not to be released.

4.Less expensive for dispute resolution
Litigation is an expensive way of solving dispute. On the other hand, arbitration may be a pocket-friendly option as it’s much faster to settle issues, reducing attorney fees. Also, costs involved in preparing for arbitration is a lot less than preparing for a jury trial.

5.Fairness and impartiality
Because parties involved in the dispute get to choose and agree on an arbitrator for their case, the process is transparent with no biasness. They parties select the person they’re both comfortable to work with.

6.Limited appeal request
Unlike in a trial, binding arbitration decision are not subject to further appeals. That makes the finality to the case with all parties have to agree and be contend with the outcome. In trials, there is often opportunities to appeal the case, which is good if it didn’t go your way first time. However, if the case favored you the first time and then the other party makes an appeal, then the tables might turn and you end up losing the dispute

Things You Should Know About Arbitration

There is a lot of unpredictability with arbitration process because it doesn’t follow the formal rules of a courtroom trial. Some evidence that may not be permissible before a judge or a jury may be considered in arbitration.

Though not always the case, arbitration can be more expensive than court proceedings, especially in non-binding arbitrations where parties can appeal the case and take the dispute back to court. This means additional litigation costs.

Lastly, an arbitrator may make rulings that are not in your favor, you need to seriously evaluate how arbitration may affect your desired outcome when choosing alternative dispute resolution method.