Arbitration is
a form of (ADR) Alternative Dispute Resolution in which the parties work out the
disputed issue without going to court. An impartial third party, known as an
Arbitrator, is chosen by the parties to listen to their case and make a
decision. The meeting takes place outside court, but is much like a hearing, in
that both sides present testimony and evidence As arbitration has been set as a method of relieving the congestion of court
calendars, the decision the arbitrator makes is almost always final, and the
courts will only rarely reconsider the matter.
In other way, Arbitration can be described as the
private method of adjudication of disputes, wherein the parties seeking a
settlement, mutually select one or more independent and unbiased persons as arbitrator.
The arbitrator studies the situation and listens to the arguments and evidence
of the parties, to make recommendations on the case, which is considered as
final and binding upon the parties concerned. Dispute resolution in arbitration
can be possible only with the consent of the disputing parties, which is
contained in an agreement called as an arbitration agreement. The agreement
must be in writing and specifically express the will of the parties to
arbitrate the dispute.
Litigation, this is the situation where by parties go to court for
settling the dispute between or among parties. it is (Advisory Dispute Resolution) where by legal proceeding
initiated between the opposing parties, with the aim of enforcing or defending
the legal right. The process is done where by the case is brought to the
court, wherein the judge (appointed by the court to act as the litigator) gives
his/her verdict on the issue after considering the all the arguments, evidence
and facts presented by the lawyers of the parties. If the parties do not agree
with the decisions of the court, they can appeal to a superior court for
getting justice, provided certain conditions are fulfilled.
The court has a
definite and formal procedure, for settling the conflict between the parties
concerned, which should be followed strictly.
The difference between
arbitration and litigation are described on the following:-
Differ in nature, Arbitration is always civil in nature, simply it
use the third part to solve the dispute where it give the chance listen each
part friendly and make a decision in order to reach a conclusion between the
two parties who are in dispute and make clear to each party without go to
court, while, Litigation
can be civil litigation or criminal litigation, use the law to solve the
dispute and give the right to each party.
Differ in forms, Arbitration
is a private method of resolving
controversies between the parties, arbitrator is independence personal who make
a decision of different cases as independently where the two are in disputes
find he/she in order to make decision secretly
wherein complete confidentiality is maintained. Where by, Litigation
is a public proceeding, here every disputes of each part has to opened to everyone
and make a judgment through a law.
Legal matters, Litigation is described as a legal process in
which the parties resort to the court for the settlement of disputes. Where by, Arbitration is a method of
resolving the dispute in which a neutral third party is appointed to study the
dispute, listen to the parties and then make recommendations.
Place of resolution is
differ, where Litigation
takes place in the court only, here each part must attend to the court in
specific day and time made by the court in order to solve the dispute, but in Arbitration
the place to meet is decided by the parties seeking the settlement, here the
parties decides to meet on any place according to their willing to the dispute
under the arbitrator where each part must agree the decision to end the dispute
if not they remove the arbitration in the court.
Differ in sources, in
arbitration,
here the arbitrator is appointed by the parties, to decide the matter, here the
third part who is arbitrator shall be appointed by parties and use that chances
to talk to each part and come to know the matter and make clear decision and
bring to parties together to solve the disputes. Where by, in litigation, the parties have no say, as to who will be the
judge to decide their case. The judge is appointed by the court only, here only
court is responsible to choose a judge who will stand for making resolution
between the parties and the part has no something to say as everything is under
controlled by court.
The cost incurred,
the cost of the arbitration process is comparatively
lower than the litigation, in arbitration process become easy because
arbitrators can easy make decision after knowing the matter which arose to each
parties so the method can save time to reach an agreement, less cost and there
is no procedures to follow for reaching the conclusion, but litigation is cost full and time consuming to reach the
decision because of everything is under control by court and follow the
procedures in the court.
Level of decision
making, in arbitration the decision made by the judge that is final
and binding in nature, here there is no chance to go to the high court if the arbitrator
fails to reach but the parties can remove the arbitrator in the court but by
following condition and so further appeal cannot be made. That differ where in
litigation, the litigants can appeal to higher court, if they do
not agree with the decision made by the court, but subject to certain
conditions.
BY CONCLUSION, arbitration is preferred by the parties over litigation due
to many reasons such as greater confidentiality, quick judgment, choice of
solutions, higher chances of settlement, low cost, flexibility in process and
other. Although, litigation has a number of advantages, that is numerous
appeals can be made, easy enforcement of the final outcome.
