Comparison between Arbitration and Litigation

Essay by shifengUniversity, Master'sA, March 2004

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Basic Concepts:

Arbitration means the reference of a dispute to an impartial tribunal chosen by the parties to the dispute who agree in advance to abide the tribunal's award issued after a hearing at which both parties have an opportunity to be heard.

Arbitration is often referred to as an alternative to litigation. However, they share the same fundamental premise. A third party is responsible for deciding any dispute. In arbitration, the parties present their dispute to an impartial arbitrator who will make a binding decision on the parties. Arbitration takes place as a result of an agreement in the contract between the parties requiring disputes to be submitted to arbitration. Parties may also agree to arbitration after a dispute arises even in the absence of a contract provision.

Litigation, judicial proceeding, means contest in a court of law for the purpose of enforcing a right or seeking a remedy.

Litigation is a resolution of disputes through the judicial system. An action is commenced by the filing of an initial pleading, usually a Complaint, setting out a claim. The defendant answers, states defenses and may counterclaim against the plaintiff. The defendant may also bring other potentially responsible parties into the action through a Third Party Complaint. Those parties have the same rights as a defendant to bring claims and add parties.

They are two important methods of dispute resolutions.

Clearly Basic differences: ¡½ Litigation ¡¼Arbitration

ƒÞLitigation is a public law system available to all citizens

*Arbitration is private law system available only to use it instead of litigation

ƒÞThe institution, date, place and the jurisdiction of Litigation decides by court

*The institution, date, place and the jurisdiction can be provided in the written arbitration agreement between parties

ƒÞLitigation is a public proceeding with audience

*Arbitration is...