The Advantages Of Arbitration - I. Arbitration Defined

Arbitration is a legally recognized alternate litigation for the resolution of civil disputes. The parties agree, either before or after a dispute arises, to submit that dispute to an independent third party for resolution. The decision of that third party is binding on the parties. A decision of an arbitral tribunal, typically referred to as an "award," cannot be reviewed by a court except on very limited grounds, such as fraud. See, e.g., Va. Code 8.01-581.010. Indeed, an arbitral award is typically less subject to judicial review than the decision of a trial court, whose decisions are almost always subject to appellate review as a matter of right. Arbitration is typically the result of a contractual agreement between the parties to submit disputes to arbitration. On occasion, arbitration can be required by statute. For example, the California Department of Transportation requires the arbitration of all disputes arising under its contracts. Public Contract Code, Article 7.1 (§§10240-10240.13). There may be a question whether statutorily required arbitration is truly arbitration or an administrative law disputes resolution procedure. The significance of the difference is that the decisions of administrative law bodies are typically reviewable by a court of law as a matter of right while, as set forth above, arbitral awards are almost never reviewable.