Why can arbitration decisions be less predictable than court decisions?

Arbitration decisions can be less predictable than court rulings primarily because the process is designed to be flexible and private rather than bound by the rigid precedent that guides judicial systems.12

Several factors contribute to this variability:

• Equitable Considerations: In many legal systems, parties can authorize arbitrators to base their decisions on equitable considerations that the law might otherwise exclude, allowing for outcomes that prioritize fairness over strict legal interpretation.2
• Lack of Public Reasoning: Unlike court judgments, the reasoning behind arbitral awards is usually not made public, which prevents the development of a consistent body of case law that could guide future expectations.2
• Discretion in Law Application: If parties do not specify the governing law in their agreement, the arbitrator has the discretion to apply the law they consider proper in accordance with the principles of the conflict of laws.1
• Limited Judicial Review: Courts generally do not review an arbitrator’s decisions regarding facts or their application of the law, as the goal is to ensure arbitration remains a final resolution rather than the start of further litigation.1