Benefits of Arbitration over Litigation for Commercial Disputes

Law

TABLE OF CONTENTS
Law..................................................................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Understanding Arbitration and Litigation along with their comparison.....................................3
Overview of the process of arbitration........................................................................................4
Two key benefits of arbitration over litigation for commercial disputes....................................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Arbitration has been referred as the procedure through which dispute has been submitted by
the agreement of parties to the arbitrators and then, arbitrators makes the binding decision in
order to solve the dispute among the parties. Thus, it is the private dispute resolution in which
the confidentiality of the parties is being maintained. Whereas, litigation is the legal procedure
under which the parties approach the court in terms of settling the dispute. In litigation, the
confidentiality of the parties is being not maintained as the dispute have been settled in the court
1. Both the procedures are concerned with settling of disputes. However, the way of settling the
dispute is different. It The present essay will lay the emphasis upon major two benefits of the
arbitration over litigation in order to resolve the commercial dispute. Also, the overview of the
process of the arbitration will be highlighted.
MAIN BODY
Understanding Arbitration and Litigation along with their comparison
Arbitration is the method for resolving the dispute under which the third party which is
often neutral party has been appointed which is called arbitrator. The third party studies the
dispute and provide guidance to both the parties between whom dispute has been arisen. On the
other hand, litigation is referred to the legal process in which the court settles the dispute
between the parties. Thus, Arbitration and litigation helps in the dispute resolution, dispute
resolution is of further two types which includes Consensual dispute resolution and Non-
Consensual dispute resolution 2. The non-consensual resolution is mainly based on the final and
the binding determination with the help of the independent or third party which is litigation and
arbitration. Hence, both of them are used for the non-consensual dispute resolution.
In traditional pattern, arbitration is being perceived in context of having certain advantage
over the litigation which involves, cost, privacy, decision making and technical expertise. The
Victorian and the new South Wales court have introduced the specific procedure in order to deal
with the disputes. The judges who are specialised in a particular field looks upon the case which
1 Spencer, D. Principles of Dispute Resolution, 3rd edition, Thomson Reuters, 2020
2 Denton, David H and Michael DG Heaton, ‘Commercial Arbitration – Does it really
have a future?’ (2014) 4(1) Victoria University Law and Justice Journal 117