The term arbitration means in very clear terms that disputes between the parties, is referred to a neutral party, where this neutral party resolves the disputes. Arbitration is a form of alternative dispute resolution in which the dispute is resolved outside the courtroom. This third party who resolves the dispute is called an arbitrator. Its decisions on the dispute are always binding on the parties. This is a reasonable way to save time and resources. This method of judicial settlement is governed by an Act called the Arbitration and Conciliation Act, 1966. This law saves the parties the hassle of spending years in court and saves them a lot of time and money that would otherwise have been a lot to invest. Arbitration is a quasi-judicial procedure and the parties are referred to a domestic court. c. The agreement provides that the material rights of the parties are determined by the arbitral tribunal.

The parties have the choice between institutional arbitration or ad hoc arbitration. If the parties opt for institutional arbitration, they have essentially agreed to be bound by the rules of the arbitration institutions. All of these institutions have their own arbitration rules, and those rules would apply to the arbitration proceedings they conduct. On the other hand, in ad hoc arbitration, arbitration is both agreed and arranged by the parties themselves. No assistance shall be requested from arbitration institutions in ad hoc arbitration proceedings. Therefore, we can affirm from the above article that an arbitration agreement is not only beneficial for the parties and at the same time saves resources, but also the time and effort used by each of the parties. Although some people say that this is not a complete procedural aspect of handling cases, it is explained that it helps both parties who faced the dispute. Most importantly, there are some things to keep in mind before you can actually write or draft a contract for the arbitration agreement. In practice, however, almost all arbitration agreements are entered into with arbitration clauses. The agreement may also indicate how the arbitration will be conducted. It can set certain arbitration rules, such as the American Arbitration Association (AAA) rules, and it can tell if there will be an arbitrator or panel of arbitrators.

The agreement may also specify how the arbitrator will be chosen. Validity: An arbitration agreement, including an arbitration clause in an agreement, is a contract. .