n]
| 1. | the hearing and determining of a dispute or the settling of differences between parties by a person or persons chosen or agreed to by them: Rather than risk a long strike, the union and management agreed to arbitration. |
| 2. | International Law. the application of judicial methods to the settlement of international disputes. |
| a comedy (c300 b.c.) by Menander, extant only as a fragment. |
The settling of disputes (especially labor disputes) between two parties by an impartial third party, whose decision the contending parties agree to accept. Arbitration is often used to resolve conflict diplomatically to prevent a more serious confrontation.
Arbitration
An informal hearing regarding a dispute. The dispute is judged by a group of people (generally three) who have been selected by an impartial panel. Once a decision has been reached, there is no further appeal process.
Investopedia Commentary
We frequently hear this term when professional sports teams are negotiating contracts with their athletes. Typically, one party aims unrealistically high and the other one aims really low, and the settlement occurs somewhere in the middle.
Related Links
Tips For Resolving Disputes With Your Financial Advisor
See also: Cooling-off Rule, Heads of Agreement, Judgment, Rescission
Also spelled: Arbitrator, Arbitrate
arbitration