It is a very commonly known fact that if there is an arbitration clause in any agreement then if any dispute arises between the parties then the matter can be settled between the parties by appointing an arbitrator. It is a known fact however we donít acknowledge the value of the arbitration clause. Arbitration clause doesnít only mean that if any dispute arises the matter will be referred to the arbitrator but it encompasses a lot more than that. The best part about the arbitration clause is that, if there is an arbitration clause in the agreements then the parties are bound to refer the matter to the arbitrator and they cannot adopt any other method of dispute settlement in the future or at any stage of the dispute. Before going to the court the matter will be heard by the arbitrator only.
The parties cannot go for litigation if there is an express clause of arbitration is inserted in the agreement. For trade and business, arbitration is indeed a wise choice of a prudent businessman. All commercial disputes which are of compoundable nature can easily be settled by arbitration if the parties are willing to settle it. Arbitration will save their time and it is much easier method as compare to the Litigation. Arbitration is of two types. One is Ad-hoc arbitration and the second is Institutional Arbitration. In Ad-hoc Arbitration you can propose your own set of rules and regulations and you can decide in advance that who will be your arbitrator. Whether there will be a sole arbitrator or the number or arbitrator will be more than one, you can decide that with the parties in advance.
In Ad-hoc arbitration the method will be simple but in Institutional Arbitration you have to choose an Institution that provides the Alternate Dispute Resolution services. In Institutional Arbitration you are bound by the rules and regulation of the Institution. The Institution will appoint the arbitrator and work as a mediator to resolve the dispute between the parties.