Proponents cite objectivity under these circumstances. Arbitration is another alternative means of resolving disputes. Contracts today often contain arbitration clauses for effective and timely resolutions. Arbitration is the process for settling disputes in which an objective third party hears both sides and generates a decision. Arbitration involves extensive use of intermediaries, such as chambers of commerce, trade associations, or third-country institutions.
Arbitration is a popular, cost-effective means of resolving trade conflicts.
Arbitration procedures are clearly defined as a part of the original contract. In most cases, the parties serving in the arbitration panel are defined. When international business conflicts occur, arbitration panelists often come from a variety of countries to minimize the cultural nuances and flagrant discrimination. A panel of 3 or 5 members is common. Panelists are normally paid for their services by the parties involved in the dispute.