Binding arbitration is a form of alternative dispute resolution (ADR) where the parties agree to have a neutral third party, called an arbitrator, hear their dispute and make a final decision that is legally enforceable, just like a court judgment.
Once the arbitrator issues a decision—called an award—both parties are bound by it, and they generally cannot appeal or take the case to court, except in very limited circumstances (like fraud, corruption, or serious misconduct by the arbitrator).
The main advantage of arbitration is that it is typically much faster than going to court. While court cases can take years to resolve due to crowded dockets and lengthy procedures, arbitration matters are often settled within just a few months, helping parties save significant legal fees and costs.