Arbitrable

The adjective 'arbitrable' describes a matter or dispute that is capable of being resolved through arbitration. This means that the parties involved have agreed, either beforehand in a contract or after a disagreement arises, to submit their conflict to a neutral third party (the arbitrator) for a binding or non-binding decision. The core characteristic is the suitability of the issue for this specific form of alternative dispute resolution. It implies a willingness of the parties to abide by the arbitrator's decision, or at least to consider it seriously. The process typically involves presenting evidence and arguments to the arbitrator, who then renders a judgment. The subject matter must be susceptible to objective assessment and resolution by an impartial third party.

Arbitrable meaning with examples

• The contract contained a clause making all future disputes regarding royalties arbitrable, which meant that if a conflict arose, they would not go to court. The producers preferred the privacy and often faster resolution of arbitration over a public trial. This included any disagreements on revenue allocation.
• Before embarking on costly litigation, the company proposed mediation and arbitration to the opposing party, seeing if their customer's complaint was arbitrable; if the subject matter lent itself to impartial assessment by a neutral third party. The insurance company decided that most claims are, which often helps cut expenses and time.
• The construction project encountered delays, and the contract stated that any claims for cost overruns and schedule extensions were automatically arbitrable. Thus, the contractors and the owner bypassed a lengthy court battle. Both parties agreed to a specific set of industry arbitrators.
• After a disagreement arose regarding a franchise agreement, both parties agreed that the issue of royalty payments was arbitrable. The franchisor felt that arbitration might preserve the long term relationship. After negotiation, the franchisor and franchisee entered into binding arbitration.