Arbitration is a form of alternative dispute resolution (ADR). It is a technique for the resolution of disputes outside the courts. The parties to the dispute agree to be bound by the arbitrator’s decision (“award”). Historically, this process has been used mostly for commercial disputes as an alternative to litigation—however, it is now used in other areas of law.
In Canada arbitration is regulated by statute and all provinces have their own separate legislation. It is generally voluntary and parties can only be involved in this alternative dispute resolution method if they have agreed to be bound by the process. This allows the parties to design the resolution process according to their needs and the nature of their dispute.