Mediation is a process where an impartial 3rd party or mediator facilitates the negotiation of a settlement between parties to a dispute.
Arbitration is a process whereby parties to a dispute mutually agree to an impartial referee who hears and makes a binding decision.
Both processes are superior to the court process when there is a long term relationship involved and the survival of the business relationship is desirable. These processes can be less expensive, more expedient, and more efficient than the court process.