commercial arbitration

Commercial arbitration is a method for resolving business disputes outside of court. It involves referring disagreements arising from contracts or transactions to a neutral third party, known as an arbitrator, who makes a binding decision. This process is distinct from mediation, where a third party offers recommendations.

Historically, commercial arbitration was used by medieval merchants. Modern arbitration law, particularly in the United States and the United Kingdom, empowers courts to enforce arbitration agreements and awards, making them legally binding. This approach offers advantages such as speed and the expertise of arbitrators in specific trades, though it can also lead to less predictable outcomes due to the lack of published reasoning for awards.12