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Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts.he parties to a dispute refer it to arbitration by one or more persons (the arbitrators, arbiters or  arbitral tribunal ), and agree to be bound by the arbitration decision (the  award ).
These may be the rules of an institution (e.g. the LCIA Arbitration Rules) or the legislation of the applicable seat (e.g. for England, this would be the Arbitration Act 1996). There are a number of advantages that arbitration can have over litigation. However, it is important to examine each supposed advantage carefully in the context of every individual transaction. Factors to consider include the following: