arbitration, international, judicial process by which international disputes, usually between states, are settled peacefully, generally through the use of a tribunal acting as a court of law. Such a tribunal may consist of an individual (e.g., an impartial head of state, the pope, the secretary-general of the United Nations), a neutral country, or an organization such as the Hague Tribunal. The parties to the dispute pick the arbitrating body themselves and are obligated to accept the terms of settlement. If the parties do not agree in advance to follow the decision reached by a third party, but merely agree to consider it, the process is termed conciliation (see mediation). Arbitration was practiced by the Greek city-states, and in the Middle Ages high ecclesiastical authorities were called upon to settle controversies. With the development of the modern system of nation-states, however, arbitration was less frequently used until the 19th cent. when the settlement by arbitration of the famous Alabama claims case between the United States and Great Britain brought this practice back into general use. Great advances have been made since then, most notably in the establishment of a Permanent Court of Arbitration (the Hague Tribunal) by the Hague Conferences. Functions analogous to arbitration were performed by the Permanent Court of International Justice (see World Court) under the League of Nations and have now been transferred to its successor, the International Court of Justice. Today many treaties contain clauses providing for arbitration or conciliation of disputes; the most notable of these is the Charter of the United Nations (Article 33).

arbitration, industrial, method of settling disputes between employer and employees by seeking and accepting a decision by a third party. Such arbitration may be compelled by the government, as in New Zealand (since 1894), Australia (since 1904), Canada (since 1907), Italy (since 1926), and Great Britain (since World War II). In other cases, it may be by voluntary agreement, as is often the case in the United States, where the government occasionally intervenes in the case of a strike affecting the public welfare (see Taft-Hartley Labor Act) by persuading the parties concerned to accept the decision handed down by the arbitrator. Additionally, the Supreme Court ruled in 2001 that companies can insist that employment-related disputes (such as discrimination suits) go to arbitration rather than to court. Arbitration machinery in the United States has been set up at both federal and state levels in the form of mediation and arbitration boards. The American Arbitration Association, founded in 1926, has nearly 17,000 members who help settle labor disputes. In voluntary arbitration a formal agreement is usually made to abide by the decision.

Permanent Court of Arbitration: see Hague Tribunal.

Geneva Arbitration: see Alabama claims.

Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the arbitrator's decision. In medieval Europe arbitration was used to settle disputes between merchants; it is now commonly used in commercial, labour-management, and international disputes. The procedures differ from those used in the courts, especially regarding burden of proof and presentation of evidence. Arbitration avoids costly litigation and offers a relatively speedy resolution as well as privacy for the disputants. The main disadvantage is that setting guidelines is difficult; therefore the outcome is often less predictable than a court decision. Seealso mediation.

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