Arbitration award

Definition

An arbitration award is the final decision made by an arbitrator or a panel of arbitrators following the arbitration process, which resolves a dispute between parties outside of the court system. This award is binding and enforceable, meaning that the parties are required to comply with its terms as if it were a court judgment. It typically includes findings of fact, conclusions of law, and the relief granted to one or both parties involved in the arbitration.

5 Must Know Facts For Your Next Test

1. The arbitration award is usually issued in writing and outlines the basis for the arbitrator's decision, including any relevant laws or contractual obligations.
2. Once an arbitration award is rendered, it can typically only be challenged in very limited circumstances, such as evidence of fraud or misconduct by the arbitrator.
3. Arbitration awards are enforceable under the Federal Arbitration Act in the United States, allowing successful parties to seek enforcement through courts if necessary.
4. Parties often choose arbitration to avoid lengthy and costly litigation processes in courts, making arbitration awards crucial for efficient dispute resolution.
5. The contents of an arbitration award may include damages awarded, specific performance orders, or even declarations regarding rights and responsibilities of the parties.

Review Questions

• What role does an arbitration award play in resolving disputes compared to traditional court judgments?
  • An arbitration award serves as a final resolution to disputes outside of traditional court systems, providing a binding decision that both parties must adhere to. Unlike court judgments that may be subject to appeal, arbitration awards are generally final and only challengeable under specific conditions. This makes arbitration an efficient alternative for parties seeking quicker resolutions without the complexities often found in litigation.
• Discuss how the enforceability of arbitration awards impacts the willingness of parties to choose arbitration over litigation.
  • The enforceability of arbitration awards significantly influences parties' decisions to opt for arbitration instead of litigation. Since awards are legally binding and can be enforced in courts under laws like the Federal Arbitration Act, parties gain confidence that their rights will be upheld without prolonged court battles. This assurance encourages more individuals and organizations to select arbitration as their preferred method for resolving disputes.
• Evaluate the implications of limited grounds for challenging an arbitration award on the overall effectiveness of arbitration as a dispute resolution method.
  • The limited grounds for challenging an arbitration award enhance the effectiveness of arbitration as a dispute resolution method by ensuring that outcomes are generally final and binding. This aspect reduces uncertainty and prolongation associated with appeals found in traditional litigation, promoting quicker resolutions. However, it also raises concerns regarding fairness, as parties may feel compelled to accept awards even when they believe there were significant errors or biases during the arbitration process. Balancing these implications is crucial for maintaining trust in arbitration as a reliable means of resolving conflicts.

Related terms

Arbitrator:

An arbitrator is an impartial third party appointed to resolve disputes in the arbitration process, making decisions based on the evidence and arguments presented by the involved parties.

Mediation: Mediation is a collaborative dispute resolution process where a neutral third party, known as a mediator, facilitates communication between parties to help them reach a mutually acceptable agreement.

Binding Arbitration: Binding arbitration refers to a type of arbitration in which the decision made by the arbitrator is legally binding on both parties, with limited grounds for appeal.