In general, arbitration can be understood as a type of alternative dispute resolution method for resolving disputes outside the court.
More specifically, arbitration is the process in which a dispute is submitted to neutral third parties, also known as arbitrators. They deliver binding decisions on the disputes between parties. Such binding decisions provided by the arbitrator are referred to as the Arbitration Award. The arbitrators have the sole right of the judicial determination of the dispute and render the arbitration award that is both legally binding and enforceable. Arbitral proceedings are faster and simpler than the conventional judicial proceedings of the court. In addition, the Arbitration Act 2055 implements regulations for Arbitration if not mentioned in the Contract.
Some of the important features of arbitration can be duly listed as follows:
Consensual: Arbitration is consensual. This indicates that the process of arbitration can be carried out only with the consent of all involved parties.
Freedom to select arbitrators: In arbitration, the parties are free to select their own arbitrators. Moreover, the parties can also select the language, applicable law, and venue of the arbitration.
Neutral: The entire proceeding of arbitration is neutral. The appointed arbitrators are also neutral.
Confidential: Arbitration is a confidential process. The confidentiality of the existence of arbitration, any given disclosure during the procedure, and the award is significantly protected.