Arbitration is an alternative way of resolving disputes through which a neutral and impartial third party - the arbitrator - appointed by the parties or by the Centre, decides the dispute in the same terms as a judge of a State Court would.
Arbitration can be voluntary or compulsory.
Voluntary arbitration is based on a settlement between the parties (arbitration agreement), through which they provide to one or more persons the power to decide the dispute.
The arbitration agreement can be: an arbitration clause or a submission agreement. The arbitration clause concerns possible disputes, which may arise in respect of a defined legal relationship, contractual or not, and the submission agreement concerns an existing dispute.
Compulsory arbitration results from a legal provision forcing the dispute resolution of certain disputes through an arbitration court, thus preventing their resolution by State courts.