What is arbitration, and how does it differ from both mediation and court litigation?

Arbitration is a private adjudicative process in which the parties present their dispute to one or more neutral arbitrators who, after considering the evidence and arguments, issue a decision called an award. It differs from mediation, where the neutral does not decide anything but instead facilitates the parties’ own negotiated agreement. It differs from court litigation in that it is private, generally more flexible and efficient, and decided by an arbitrator the parties often have a role in selecting rather than an assigned judge. In commercial matters, arbitration awards are typically binding and enforceable, and the grounds to challenge them in court are limited — which gives the parties finality, an important consideration in high-stakes disputes.