Anda di halaman 1dari 6


Generally, arbitration is a form of alternative dispute resolution and it is a

technique for the resolution of disputes outside the court. The parties to a
dispute refer it to arbitration by one or more person is defined as arbitrators,
and agree to be bound by the arbitration decision is defined as award. Other
forms of alternative dispute resolution include mediation and non-binding
resolution by experts. Arbitration is used for the resolution of commercial
disputes, specifically in the international commercial transactions.
Arbitration can be classified as voluntary arbitration or mandatory arbitration
and binding arbitration or non-binding arbitration. Voluntary arbitration means
the procedure whereby parties involved in a labour dispute mutually agree to
submit their differences to a third party for a final decision. Voluntary
arbitration is arbitration by the agreement of parties and is a binding
adversarial process in which the disputing parties choose one or more
arbitrators to hear their dispute and to render a final decision or award after an
expedited hearing. Important elements in the voluntary arbitration are
voluntary submission of dispute to an arbitrator and subsequent attendance of
Mandatory arbitration is a form of alternative dispute resolution in which two
or more parties are required to submit their dispute to an arbitrator like parties
shouldnt opt for litigation. Its a contract term that prevent judicial attention
from disputes. In the process of mandatory arbitration, the parties to
arbitration will submit their evidence before a selected neutral arbitrator. After
that, the arbitrator will determine the amount of arbitrator award. A lawsuit can
be filed to have a trial de novo if one of the litigants are refused to accept the
arbitration award.
Binding arbitration is defined as an arbitration proceeding with a binding
award. The award by the third party is legally binding both sides. Binding
arbitration is adopted when both parties cannot reach a settlement on their
own and both parties prefer not going to trial.

Non-binding arbitration is defined as the arbitrator determines the rights of
the parties to the disputes. Nevertheless, neither party is bound with an
arbitrators decision nor an arbitrators award is issued. The parties to
disputes can either pursue their claim through the court or by a binding
Arbitral award is defined as an award of damages against a party. In many
jurisdictions tribunals have a range of remedies that can form a part of award.
Arbitral award are included payment of a sum of money for conventional
damages, the making of a declaration as to any matter to be determined in
the processing. Some tribunal may have the equal power to the court. For
instance, the tribunal have the power to order the rectification, setting aside or
cancellation of a deed. The parties have the right to decide the matters, but
the tribunals powers are limited to decide the whether a party is entitled to
damages. It not have the authority to order of rectify a contract.
Advantage of arbitration is the arbitration can be cheaper and more flexible
for business. In arbitral proceedings, the language of arbitration may be
chosen. In judicial proceedings the language of the country court will be
automatically applied. These is because of the arbitration awards are basically
easier to enforce in other nations than court judgments. In some legal system,
there are very limited avenues for appeal of an arbitral award, because it
limits the duration of the dispute and it is associated liability. Moreover, the
process of arbitration is always faster than litigation in court. In contrast to
litigation, arbitration allows the parties to choose their own tribunal. For
example, they can choose the arbitrators with an appropriate degree of
The disadvantage of arbitration is arbitration may be subject to pressure
from powerful law firms. In some legal systems, the arbitral awards have
fewer enforcement options than judgements. Theoretically, arbitrators are
unable to enforce interlocutory measures against a party. As an illustration,
arbitrators are making it easier for a party to avoid enforcement of member in
arbitration due to increase the legal fee without explain to the members of
unfavourable rulings. Besides, arbitration agreement are contained in ancillary
agreements and clients usually do not know in advance that they have agreed
to mandatory binding pre-dispute arbitration. If the arbitration are mandatory
and binding, the parties waive their rights to access the courts. Furthermore,
some arbitration are required the parties to pay for the arbitrators like pay for
additional of legal cost. In some arbitration agreements, the recovery of
attorneys fee is unavailable. So that, it difficult for clients to get legal
representation. However, most of the arbitration codes and agreements
provide for same relief that could be granted in court.
On the other hand, arbitration forum depends on the corporation for repeat
business and it will be an inherent incentive to rule against the clients. In
additional, the arbitration awards themselves are not directly enforceable. A
party seeking to enforce an arbitration award must resort to judicial remedies.
It is called an action to confirm an award. Although, the grounds for attacking
an arbitration award in court are limited and can be fiercely fought. Therefore,
huge legal expenses that negate the perceived economic incentive to arbitrate
the dispute in the first place.
Apart from the advantages and disadvantages of arbitration, the definition
of arbitration agreement is a written agreement within the parties to a dispute
to designate a particular arbitrator to resolve their disputes arising out of a
particular business relationship. Usually, arbitration agreement are divided
into two types. First type of the arbitration agreement is an agreement which
provide that, if a dispute should arise, it will be resolved by arbitration. Second
type of the arbitration is submission agreement. It is defined as agreement
which are signed after a dispute has arisen, agreeing that the dispute should
be resolved by arbitration. Arbitration agreement is usually legally binding. For
illustrate, companies are required worker to sign an arbitration agreement
which it can be ensured the worker from suing the company in court. In
contrast, arbitration are unsafe to workers because they always require a
worker to pay money to file a claim with arbitration association.
Arbitration agreement generally have a status in the law. In disputes on a
contract, a common defence is to plead the contract is void. Therefore, claim
based upon it fails. Party successfully claims that a contract is void, then
contract including the arbitration clause would be void. The courts have
accepted that a contract can be declared void by a court or tribunal. In
additional, the contract contains an arbitration clauses, then the proper forum
to determine whether the contract is void or not, is the arbitration tribunal.
Arbitral tribunal is defined as a tribunal constituted for resolving dispute by
way of arbitration. Arbitral tribunal consists of either a sole arbitrator sitting,
two or more arbitrator, with or without a chairman or umpire. Normally,
arbitration are usually divided into two types that are ad hoc arbitration and
administered arbitration. The ad hoc arbitration is defined as the arbitral
tribunals are appointed by the parties. After it has been formed, arbitration will
be managed by the tribunal. Whereas, the administered arbitration is defined
as the arbitration will be administered by a professional arbitration institution.
Usually, the arbitration institutions will be appointed the authority and tend to
have their own rules and procedures.
The duties of the tribunal are determined by a combination of the provisions
of the arbitration agreement and by the procedure laws. The laws of the seat
of the arbitration permit party autonomy determines the interplay between the
two. Nevertheless, in some countries the tribunal owes several non-
impairment duties. Including, the tribunal to adopt procedures suitable to
circumstances of the particular cases and it provides a fair means resolution
of the disputes.

1. Arbitration
2. Arbitration and Mediation
3. Voluntary Arbitration
4. Mandatory Arbitration
5. Binding Arbitration
6. Non-binding Arbitration
7. Arbitral Award
8. Arbitration Agreement
9. Arbitral Tribunal