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How does arbitration resolve commercial and labour disputes?

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Wood-paneled courtroom with judge's bench, American and Nevada flags, wooden chairs and tables, and a mounted animal head above the bench in the Esmeralda County courthouse, Goldfield, Nevada. — Court Judge's bench in a courtroom in Nevada, U.S.

Arbitration is a nonjudicial legal technique where a neutral party or board renders a binding decision, known as an award, to resolve disputes.1

Commercial Arbitration

Commercial arbitration serves as an alternative to court proceedings for trade controversies. Parties typically select arbitrators—often experts from trade associations or chambers of commerce—to form a tribunal. The process is governed by the parties' agreement or the arbitrator's rules, ensuring a fair hearing. While courts may determine if a dispute falls under an arbitration agreement, they generally do not review an arbitrator's factual findings or legal applications, focusing instead on procedural fairness.23

Labour Arbitration

Labour arbitration resolves disputes between management and unions, often as the final step in a collective-bargaining agreement. It is categorized into two types:4
* Arbitration of Rights: Resolves disputes over the application of an existing contract, such as grievances regarding discipline, seniority, or benefits.45
* Arbitration of Interests: Addresses disputes arising during the negotiation of a new contract.4

Unlike commercial arbitration, labour arbitration is not a substitute for ordinary court procedure but a specialized mechanism for industrial relations. Arbitrators have the power to subpoena evidence and render binding decisions, which are rarely reviewed by courts.45