Binding arbitration means that all parties involved agree to adhere to the decision of the arbitrator; in other words this decision will become legally binding. The parties have to agree to this before the mediation process, and the process is commenced by one part submitting a clam that they are owed money by the other party. A response is submitted by the accused party, which explains why they do not believe that they owe the other party money. Sometimes a counterclaim is filed and in that case, the respondent may issue a claim against the applicant, claiming that they are actually owed money by them.
During the arbitration mediation process, any documents or other evidence that supports the claim or position of either party can be filed along with the application and response. An arbitrator is assigned to the case, or a telephone hearing may be permissible if it is requested. After the hearing, a decision will be made by the arbitrator, and this legally binding and final ruling is based on any evidence or documentation, as well as on the application and response, if any.
Keep in mind An arbitrator is one who delivers a fair judgment to resolve a dispute. The arbitrator’s decision may or may not be favorable to one or more parties involved; however, the arbitrator is a neutral third party chosen by the disputing parties in lieu of litigating in court. The role of the arbitrator is to render a judgment in the dispute and this judgment is legally binding, unless the parties have agreed beforehand that the judgment will not be binding.