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 An overview of arbitration

As the oldest form of alternative dispute resolution, or ADR, arbitration dates back to ancient civilisations. However, its modern international framework was forged in the late 18th century to resolve diplomatic conflicts between the British and the Americans following the American Revolutionary War. 

Nowadays, it is a popular form of dispute resolution for international commercial transactions, and very often contracts contain ADR clauses setting out the specific details for resolving disputes by means of arbitration. 

For example, parties can choose the law to govern the dispute, the law to govern the arbitration, called the seat of arbitration, the language the case will be heard in, as well as the rules of arbitration which govern procedural aspects such as when parties can file documents. 

Most cases involving arbitration are where parties have voluntarily chosen it as the form of dispute resolution in their contract.  However, sometimes it is mandatory or compulsory due to certain legislation.

If a party is obligated via a contract to use arbitration as the means to settle disputes and a party breaches this agreement by starting traditional court proceedings, the other party,  the non-breaching party, can apply to the court for something called a stay of the court proceedings. And this means they can stop any further legal proceedings in the courts from taking place.

At least with regard  to England and Wales, most cases can be submitted to arbitration, with the exception of those dealing with criminal matters, insolvency proceedings, and employment issues where the employee has a statutory right to have his or her case heard by an employment tribunal.

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