Compulsory Arbitration Law & Legal Definition


Compulsory arbitration is an arbitration required or forced by law on parties involved in a dispute. In such arbitration, the parties are compelled to submit their case for arbitration even if they do not will to do so. It is a non-binding, adversarial dispute resolution process in which one or more arbitrators hear arguments, weigh evidence and issue a non-binding judgment on the merits after an expedited hearing. In such arbitration, arbitrators address only the disputed legal issues and apply legal standards. Either party can reject the ruling and request a trial de novo in court.

a. Under compulsory arbitration the parties are forced to arbitration by the state when:

b. The parties fail to arrive at a settlement by a voluntary method.

c. Public interest and the working conditions have to be safeguarded and regulated by the state.

d. When there is a national emergency which requires that the wheels of production should not be obstructed by frequent work-stoppages.The nation is facing a grave economic crisis.

e. There is a grave public dissatisfaction with the existing industrial relations.

Compulsory arbitration eliminates the scope for strikes and lock-outs. It deprives both the parties of their very important and fundamental rights.

The following is an example of a state statute (Oregon) defining the term:

According to ORS § 243.650, "Compulsory arbitration" means the procedure whereby parties involved in a labor dispute are required by law to submit their differences to a third party for a final and binding decision.