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Arbitration is a private form of binding dispute resolution conducted before an independent tribunal. An arbitration hearing typically involves the use of an individual arbitrator or a panel of three arbitrators, referred to as a tribunal. The tribunal is the equivalent of a judge in a court hearing. However, the arbitrators are selected by the parties, either directly or through a third party or institution. The tribunal’s powers and duties are fixed by the terms of the parties’ agreement (including any arbitration rules which have been adopted) and the national laws which apply to some of the procedural aspects in each case.

Investment contracts often contain an arbitration clause for arbitration in a neutral location (forum) outside of the host country rather than dispute resolution by the local courts.

International arbitrations can be either ad hoc or institutional.

In ad hoc arbitrations the parties execute their own particular arrangement without reference to institutional rules to govern the arbitration. The most popular rules for ad hoc arbitrations are the (“UNCITRAL Rules”). UNCITRAL stands for the United Nations Commission on Trade Law.  It should however be noted that it is possible to have an institutional arbitration center be the appointing institution when using any ad hoc arbitration rules such as the UNCITRAL Rules.

In institutional or administered arbitrations there is a supervising institution which exerts administrative control over the arbitral process in terms of procedure.

For a list of some of the major arbitration centers, see here.

For a comparative chart of some of the major arbitration rules, see here.

The decisions of an arbitrator or arbitral tribunal are recognized and enforceable in States that are signatories of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Arbitration Convention). 

Source: Guide to International Arbitration