Arbitration is one procedure of what is commonly known as Alternate Dispute Resolution. It’s a procedure where both sides come together and agree to follow and respect the resolution of the arbitrator. This is one route you can try instead of filing a lawsuit and going to court to resolve a dispute. The arbitrator is customarily an attorney accustomed to the arena of law existence unquestionable. The decision of the arbitrator is legally binding against both parties, although the decisions may be appealed, in some cases. Arbitration is used as a private form of settlement between parties by appointing individuals as arbitrators is considered a useful means of a prompt and fair settlement of disputes that may result from commercial transactions in the field of goods and services. Arbitration has numerous advantages for the parties implicated in the dispute through their trust in the arbitrators, the confidentiality of information, the speed of adoption of the solution, low court fees and the possibility of international recognition of arbitration awards.

The dispute that can be resolved by Arbitration?

Arbitration can be done by the option of the parties or by the requirement of the law. Most of the time, Arbitration can be done in case of a contract. These are some cases where arbitration is not possible if claims related to this-

  •  family law;
  •  rental contracts for accommodation, including disputes relating to the validity, termination, and qualification of such contracts;
  • patrimonial property rights;
  •  insolvency;
  •  the alienation of property in the public domain;
  •  life and health;
  •  non-property rights of intellectual property;
  • other litigation in respect of which the law delegates the exclusive jurisdiction of the courts.


By the term “litigation “, we mean going to court for settling the dispute between the parties. It is a legal arranged originated between the opposing parties, with the purpose of defending the legal right. In this procedure, the case is conveyed to the court, wherein the judge (appointed by the court to act as the litigator) gives his/her verdict on the issue after seeing all the arguments, evidence and facts obtainable 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 receiving 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 firmly. However, due to the rigidity and high cost involved in the litigation process, there are instances when parties go to arbitration.

Main differences between Litigation and Arbitration-

One of the main differences between Litigation and Arbitration law is the involvement of the court. There is an involvement of the court in case of litigation whereas, in case of Arbitration, the settlement is done between the parties outside of court.

 Arbitration is a method of determining the dispute in which an impartial third party is appointed to study the dispute, listen to the parties and then make recommendations. On the other hand, litigation is described as a legal process in which the parties resort to the court for the settlement of disputes.

Litigation is civil as well as criminal in nature whereas Arbitration is always civil in nature.

Litigation is a public procedure for resolving controversies whereas Arbitration is a Private method of resolving controversies where the matter is being confidential.

The cost of the litigation process is generally higher than the cost of the Arbitration process.


 After reading all of the above you would think that arbitration is the superior dispute determination method, but that is not necessarily the case. In common, arbitration may be the well option if the agreement you wish to settle is so practical that you would prefer to have experienced arbitrator resolve it in the case of a dispute. Also, arbitration may be the better option if the value of the alleged agreement defends reimbursing the significant arbitration charges. On the other hand, if you wish to enter a standard type of agreement, then choosing litigation could be the better option.


eStartIndia Team

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