Arbitration is one of the alternative (to court) methods of dispute resolution. In arbitration, a trained, professional, and most importantly, neutral arbitrator acts as the referee who decides on a contentious issue. Arbitrators are often retired lawyers, which does not mean that they have to follow traditional legal procedures.

An arbitration agreement is usually a clause in a contract in which the parties agree to out-of-court settlement of any disputes. Arbitration clauses are common in consumer and employment contracts, but can be proposed as an adjunct to any commercial agreement where one or both parties would like to exclude the possibility of a future trial. Arbitration provisions often appear as so-called fine print. Some people omit / disregard such provisions and sign contracts with arbitration clauses without being aware that as a party they have signed all the provisions contained in the contract.

The parties jointly select an arbitrator from a list provided by the arbitration firm. Arbitration takes place in a private conference room, not a public courtroom. The selected arbitrator begins his work by presenting the basic principles. Each party then makes an introductory statement. The parties then present their evidence and, if necessary, call witnesses. Finally, the parties provide closing statements, or so-called post-trial reports that summarize their arguments.

The final stage of the process is the adoption and issuing of a decision by the arbitrator. Within the time limit set by the parties, the arbitrator shall issue a written decision. This decision is final, as it cannot normally be challenged.

Arbitrage Benefits:

• Compared to a lawsuit and litigation, arbitration is a quick and cheap option.
• This is a closed procedure, as opposed to open, public court proceedings.
• The decision is final. Courts usually refuse to overturn arbitral awards. This means that arbitration leads to final results that allow the parties to continue or end their cooperation, and not wait months for court decisions.
• Much more creative solutions are allowed here than judgments issued by civil courts. Such settlements are usually more satisfactory for the parties.

Employers often include mandatory arbitration clauses in employment contracts, as do many companies doing business with consumers. Companies consciously construct arbitration clauses to avoid lawsuits. Unlike companies, individual consumers have little experience and knowledge of the subject. As parties to contract disputes, they are often at a disadvantage in arbitration because they may not have the knowledge, experience, and resources necessary to secure their interests.

In practice, however, it is impossible to avoid signing contracts containing arbitration clauses, because many standard contracts with companies offering Internet, telecommunications or transport services contain such provisions. Unfortunately, these are non-negotiable elements. A large ICT concern provides its clients with a model contract. You can sign it or not. Unfortunately, it cannot be negotiated and changed from the position of a single consumer.

An arbitration agreement, or rather arbitration between organizations, is usually more balanced. Both parties have the experience, knowledge and resources to take full advantage of the benefits of arbitration.

Consumer advocates fight the corporate practice of requiring consumers to sign arbitration agreements on the grounds that consumers are usually unaware that they are waiving their procedural rights, and are also unaware that in practice arbitration decisions routinely favor businesses over consumers.

Source:https://poradniknegocjatora.pl/umowa-arbitrazowa/

Supported by Norway through Norway Grants 2014-2021, in the frame of the Programme “Social Dialogue – Decent Work”.