Referral to Arbitration
A referral to arbitration is a formal process in which a dispute between parties is submitted to an arbitrator or arbitration panel for resolution, rather than being decided through traditional court litigation. This process is typically governed by an arbitration agreement that the parties have entered into, which may be part of a larger contract or standalone agreement.
Arbitration is a form of alternative dispute resolution (ADR) that allows for a more streamlined and often faster resolution of disputes compared to court proceedings. In a referral to arbitration, the parties agree to abide by the arbitrator’s decision, known as an "award," which is usually binding and enforceable in court, subject to limited grounds for appeal.
The referral to arbitration process generally involves the following steps:
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Initiation: One party submits a request for arbitration to the designated arbitration organization or directly to the arbitrator, outlining the nature of the dispute and the relief sought.
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Selection of Arbitrator: The parties may mutually agree on an arbitrator or utilize a pre-established method outlined in their arbitration agreement for selecting an arbitrator.
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Pre-hearing Procedures: The arbitrator may conduct preliminary hearings to establish rules, timelines, and procedures for the arbitration process.
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Hearing: The actual arbitration hearing is held, during which both parties present evidence, witness testimony, and legal arguments.
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Award: After deliberation, the arbitrator issues a decision in the form of an award, which resolves the dispute. This award is generally final and binding on the parties, with limited grounds for judicial review.
An example of a referral to arbitration could occur in a business contract where one party claims breach of contract. If the contract contains an arbitration clause, the aggrieved party would file for arbitration instead of pursuing litigation, leading to a resolution through the arbitration process.
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