Arbitration is one of a number of Alternate Dispute Resolution methods. Other methods include mediation, adjudication, expert determination, negotiation, inquiry and conciliation. Generally, "Alternate Dispute Resolution" means: the resolution of disputes by methods other than litigation and court action. Court action may be considered expensive, time consuming and inconsistent with the business, commercial or personal needs of the parties, including issues of confidentiality.

Clauses providing for Alternate Dispute Resolution, including Arbitration, at a domestic and international level, are common in agreements in trade, shipping, carriage of goods by sea, commercial, building and construction (to name but a few) where the parties require and are capable of agreeing to those clauses. Key facts about arbitration are as follows:

  • Parties can agree at any time to utilise Arbitration as a method of dispute resolution.
  • Arbitration is different from a Court action and other methods of Alternate Dispute Resolution.
  • An Arbitrator or Arbitrators are appointed by agreement between the parties or, absent agreement, by an appointing body.
  • Parties require the Arbitrator to decide, on the evidence before him/her, the issues for Arbitration.

The decision (the Award) of the Arbitrator is generally binding on the parties to the Arbitration. Generally, an Award is enforceable by Courts. The Arbitrator is capable of taking measures to ensure the quick, speedy and effective resolution of a dispute. Federal and State laws are in force in Australia, recognising, facilitating and regulating Arbitration of both domestic and international disputes, including the enforcement of Arbitral Awards.