Arbitration Arbitration is a formal process similar to litigation but where the hearing is in private in front of a nominated third party, the arbitrator, who makes a binding decision. When the matter is concerned with industrial disputes and its settlement then the arbitrator is not a court judge but rather an industry-specific expert or otherwise a well qualified individual who both the parties agree for resolving their dispute. Arbitration is legally based process that involves much of the procedure and type of argument that occurs in a court trial. However, arbitration is private, like court trial, it is concerned much more with fair treatment of the parties involved than achieving a precise legal agreement.Arbitration is a process in which dispute is solved by the third party, the arbitrator who makes the decision which is binding on both the parties. The decision given by the arbitrator is called as award. The basic difference between arbitration and conciliation is that — in arbitration when award is passed by the arbitrator, it is binding on both the parties but in conciliation, decision given by the conciliator is not binding on the parties. The arbitration process is considered as legal process as litigation but conciliation is not a legal process. The objective of the arbitration is not compromise but adjudication, though they are having liberty to compromise. in conciliation compromise may take place after the decision of conciliator.Advantages of arbitration There should be a clause of arbitration agreement regarding industrial disputes then only the dispute can be solved by arbitration. The parties can choose who is to be their arbitrator and this means they can choose a person with the particular expertise involved in their dispute. An arbitration process is private and confidential to the parties and the arbitrator. An arbitration is held anywhere that is convenient at any suitable time.