What characterizes arbitration compared to other settlement procedures?

Arbitration is characterized by its ability to lead to a binding judgment, which distinguishes it from other forms of dispute resolution. In this process, an impartial third party, known as an arbitrator, reviews the evidence presented by both sides and makes a decision that is typically enforceable in a court of law. This binding nature is critical because it offers a definitive resolution to the dispute, unlike mediation or negotiation, where the outcome is not enforceable unless both parties reach a mutual agreement.

Additionally, because arbitration results in a binding decision, parties involved usually have limited options for appeal, effectively concluding the dispute once the arbitrator has made a ruling. This characteristic can provide parties with a sense of closure and finality that may not be present in other settlement procedures.

The other aspects of arbitration, such as its level of formality or the details of the environment in which it occurs, can vary. However, its most defining feature is that the judgment given by the arbitrator is binding, making it a popular choice for resolving disputes in many legal and commercial contexts.