. According to Mithra (2009), binding arbitration is a case whereby a party is asked to make an agreement which provides that if they have a dispute with the contracting partner then they opt to be heard by private arbitrator rather than normal litigation through courts. The contracting parties are bound totally by the decision of the arbitrator hence their case can not be appealed in a court of law. The arbitrator is usually a third party and has the authority to make final decision in accordance to prior arrangements of contracting parties. It can not be stated with certainty when formal processes of arbitration were established in the world but it is known that arbitration as method of resolution of disputes is far much older than courts litigation.
Arbitration use can be traced far back from ancient civilizations e.g. Greece, Roman and Egypt. The arbitration act of 1697 was the first English law on arbitration, though arbitration was in common use even before the law came to be. Arbitrations before this law was usually never strong this was mainly due to the parties to arbitration terminating the arbitrators authority if the deemed things were not going well with their expectations on the arbitration
Arbitration is a resolution of a dispute by a non partisan third party who gives the final word on the settlement which is final to the parties in arbitration. Arbitration is distinct to mediation, determination by experts, alternative dispute resolution and judicial proceedings. In practice some cases of disputes are not able to be subjected to arbitration this is usually depending on the content of the case that involve arbitration. Examples of procedures that can not be subjected to arbitration include;
Where the resolution of the dispute does not require the parties to the dispute to enter any form of agreement e.g., court processes that bind all members of the public or institutions or a dispute that involves public interest, this can be highlighted by the example that antitrust matters in U.S were not arbitral until recently (1980s).
Another example of cases not arbitral is ones relating to family, status and crime. This is because the authority of the parties to enter into arbitration on these matters is limited. Private rights disputes are however arbitral.
The other case where arbitration cannot apply is where relevant authority would want to protect weaker member who can be easily be disadvantaged by the agreement in arbitration e.g. consumers
In arbitration, parties enter into agreement by consensus not by force, however in real life arbitration agreements are usually put in circumstances where like the workers or consumers have very limited or no power to speak for themselves. In some instances clauses on arbitration are placed in areas which render their useful meaning to be unrealistic e.g. within sealed user's manual in products. These agreements are of two kinds; Agreement with a provision for solution of any arising dispute by arbitration they are in most cases normal contracts and usually contain arbitration clauses; Agreements made due to dispute that has arisen consenting that