In general, arbitration is a process where parties agree to have their dispute determined in a legally binding manner by a person they jointly choose and appoint. Importantly they also agree to be bound by the decision of the arbitrator who is required to act fairly and judicially in determining the dispute.
Arbitration is a time honoured practice of resolving disputes which dates back to antiquity. Today it is a process used:
- as an adjunct to court litigation, for the speedy resolution of smaller less complex matters;
- generally for the resolution of matters involving specialist technical knowledge (e.g. computers, grain quality, building and construction) that a judge would not possess;
- as the method of preference in international trade disputes.
In Australia, every state and territory has enacted the Commercial Arbitration Act, uniform legislation that provides control and assistance to the arbitration process and protection of the arbitrator’s award.
Australia has also adopted the United Nations Commission on International Trade Law (UNCITRAL) Model Law for the regulation of international trade by arbitration.