The Procurement Glossary » Arbitration

Arbitration

Contracts & Legal

Definition

A private dispute-resolution process where an independent arbitrator issues a binding decision instead of a court.

Explanation

Arbitration is often faster, confidential and enforceable across borders, making it common in international supply contracts. The clause specifies the rules, seat and language of any arbitration.

Example

The cross-border supply dispute goes to arbitration under agreed international rules rather than either country's courts.

Related terms

• Dispute Resolution — The contractually agreed process for resolving disagreements — often escalation, then mediation or arbitration, before litigation.
• Governing Law — The jurisdiction whose laws will be used to interpret and enforce a contract.
• Contract — A legally binding agreement between buyer and supplier setting out what will be supplied, at what price and on what terms.

Frequently Asked Questions

What is Arbitration?

A private dispute-resolution process where an independent arbitrator issues a binding decision instead of a court. Arbitration is often faster, confidential and enforceable across borders, making it common in international supply contracts. The clause specifies the rules, seat and language of any arbitration.

Can you give an example of Arbitration?

The cross-border supply dispute goes to arbitration under agreed international rules rather than either country's courts.

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