Question

Select the true statement about arbitration as a conflict resolution technique.

• Arbitration places the outcome in the hands of a neutral third party who decides what should be done.

• Arbitration allows the disputing parties themselves to come to a mutual decision.

• Arbitration focuses on changing and improving the relationship between parties, and does not always result in a decision or agreement.

• Arbitration allows the mediator to change roles if agreement is not reached.

Answer 1

Answer: Arbitration places the outcome in the hands of a neutral third party who decides what should be done.

Arbitration is a form of dispute settling mechanism when two parties cannot resolve a conflict by agreeing on a final decision. It falls outside the procedure of courts and the arbitration decision is binding on courts. Since an external impartial adjudicator takes a decision on the consensus of disputed parties, it should be final and binding.

Arbitration decisions have to be binding on parties as the arbitrator finds a middle ground between the disputed parties to reach a consensus and also the arbitrator takes a neutral stand on the issue. Non binding arbitrations cannot be called as an arbitrations as they are just mediations that cannot solve the issue.