Commercial Arbitration
Commercial Arbitration
Commercial arbitration is a private, formal process where parties in a dispute agree to submit their disagreement to one or more impartial third parties, known as arbitrators, for a binding decision. Unlike court litigation, which takes place in the public judicial system, arbitration is a "creature of contract," meaning its existence and rules are primarily derived from the agreement between the parties themselves.
Agreement to Arbitrate
The foundation of arbitration is an arbitration agreement. This is typically an arbitration clause within a commercial contract, stating that any disputes arising from that contract will be resolved through arbitration. It can also be a separate agreement entered into after a dispute has arisen.
Private and Confidential
Unlike court proceedings, which are generally open to the public, arbitration hearings are private and confidential. This is particularly valuable for businesses that wish to protect sensitive commercial information, trade secrets, and their reputation.