Arbitrator: Definition, Example and Related Terms
Who is an Arbitrator ?
An arbitrator is someone who is selected, usually by mutual agreement between two or more parties, to resolve disputes that arise in various settings, such as in business. Unlike judges, who are assigned to cases by the legal system, an arbitrator is chosen specifically by the disputing parties who trust in their impartiality and expertise. This role is essential in many industries, as it allows disagreements to be settled without resorting to a lengthy and expensive court case. Much like a referee in a sports game, an arbitrator's role is to study the rules (in this case, the terms of a contract or agreement), hear out all parties, and then make a fair decision.
Interestingly, the word 'arbitrator' comes from the Latin 'arbitrari', which means 'to give judgment'. This echoes their role as a person who has the power to decide and solve issues. They are highly valued for their expertise, neutrality, and ability to deliver impartial and reasoned decisions.
Scenario Role of the Arbitrator Two businesses have a disagreement over a joint project. The arbitrator reviews the contract, hears the arguments from both sides, and makes a decision that is binding for both businesses. An employee believes they were unlawfully dismissed. The arbitrator will review the terms of the employment contract, the circumstances surrounding the dismissal, and rule on whether or not it was lawful. A customer disputes the quality of a product under warranty. The arbitrator may be asked to decide on the validity of the warranty claim, and what level of compensation, if any, is due.