Define: Arbitration

UK Accounting Glossary

Definition: Arbitration


Quick Summary of Arbitration


In arbitration an independent third party considers both sides in a dispute, and makes a decision to resolve it.



What is the dictionary definition of Arbitration?

Dictionary Definition


  1. The act or process of arbitrating.
  2. A process through which two or more parties use an arbitrator or arbiter in order to resolve a dispute.
  3. In general, a form of justice where both parties designate a person whose ruling they will accept formally. More specifically in Market Anarchist (market anarchy) theory, arbitration designates the process by which two agencies pre-negotiate a set of common rules in anticipation of cases where a customer from each agency is involved in a dispute.

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Full Definition of Arbitration


In arbitration an independent third party considers both sides in a dispute, and makes a decision to resolve it. The arbitrator is impartial, means he or she does not take sides. In most cases the arbitrator’s decision is legally binding on both sides, so it is not possible to go to court if you are unhappy with the decision.

Most types of arbitration have the following in common:

  • Both parties must agree to use the process
  • It’s private
  • The decision is made by a third party, not the people involved
  • The arbitrator often decides on the basis of written information
  • If there is a hearing, it is likely to be less formal than court
  • The process is final and legally binding
  • There are limited grounds for challenging the decision

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Arbitration FAQ's



Cite Term


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https://payrollheaven.com/define/arbitration/
Modern Language Association (MLA):
Arbitration. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. September 17, 2019 https://payrollheaven.com/define/arbitration/.
Chicago Manual of Style (CMS):
Arbitration. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/arbitration/ (accessed: September 17, 2019).
American Psychological Association (APA):
Arbitration. PayrollHeaven.com. Retrieved September 17, 2019, from PayrollHeaven.com website: https://payrollheaven.com/define/arbitration/

Definition Sources


Definitions for Arbitration are sourced/syndicated from:


This glossary post was last updated: 26th December 2018.