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Base ball arbitration is a type of arbitration in which each party to the arbitration submits a proposed monetary award to the arbitrator. After a final hearing, the arbitrator will choose one award from the submitted awards without modification. Baseball arbitration thus limits an arbitrator's discretion in arriving at a decision. It gives each party to the arbitration an opportunity to offer a reasonable proposal to the arbitrator with the hope that his/her award will be accepted by the decision-maker. Baseball arbitration is increasingly used in commercial disputes. It is sometimes referred to as an “either/or” arbitration or final-offer arbitration.
Baseball arbitration can be one of two two types, a night baseball arbitration or a day baseball arbitration. In both, the parties shall submit their last best award to the arbitrator. In a day baseball arbitration, the arbitrator is aware of the award and chooses the award that is considered the most appropriate. Whereas, in a night baseball arbitration, the awards submitted by the parties are kept confidential from the arbitrator. Upon delivering the decision, the award that is mathematically closest to the arbitrator’s award is delivered as the binding award. Night baseball arbitration is mostly chosen when the parties have a strong belief about the reasonableness of their submitted award.