Arbitration is a procedure in which the parties agree to refer a dispute to a neutral third party who can make a final, legally binding decision.
The role of an arbitrator is similar to that of a court. An arbitrator will listen to each party’s argument, examine evidence and ultimately make a final verdict on the issue.
Mediation is the preferred alternative as it allows both parties to come to a resolution they both agree upon without having a third party come to a legally bound decision. Alternatives like arbitration dramatically increase the cost of resolving the dispute as well as the time it takes to bring the parties together.