Binding Arbitration Law and Legal Definition

Binding Arbitration is referred to an arbitration proceeding with a final and binding award, that is often enforceable in courts. Arbitration is a form of alternative dispute resolution that is helpful for the resolution of disputes outside courts. Parties to a dispute refer the dispute to an impartial person or persons called arbitrators, by whose decision they agree to be bound. The decision or award by the third party is legally binding upon both sides. Usually this method is adopted when parties cannot reach a settlement on their own and when they both prefer not going to trial.