Difference Between Arbitration and Adjudication

Arbitration and Adjudication apply to two methods for resolving disputes between the parties. They are similar resolution methods for disputes; however, these helpful procedures in both cases differ. The required process between Arbitration and Adjudication is determined based on monetary factors.

Arbitration vs Adjudication

The main difference between Arbitration and Adjudication is that a person or an entity decides in a case of legal dispute. They are two of the most common forms of alternative dispute resolution, generally referred to as ADR.

Arbitration is a process for settling disputes by the parties’ agreement, and one or more arbitrators decide on Arbitration. The private dispute resolution process is preferred in this case instead of the court’s involvement. It can occur only when both parties are agreed on a point.

On the other hand, Adjudication is a legal procedure where court-based litigation is done. It is a process of judging a case, with the help of competitions or arguments, to make the final decision about something. The method of controlling disputes and finding resolution occurs through the Adjudication process. In addition, disputing parties are present before any appointment with the official and make their plea for individual cases.

Comparison Table Between Arbitration and Adjudication

Parameter of comparisonArbitrationAdjudication
DefinitionIt is a form of ADR and a dispute process, where the court is not involved.The court’s involvement makes a final judgment event in a dispute resolution process.
DecisionBoth parties must bind the decision, but it must be made with the mutual consent of both parties.The decision is made by the court and binding to both parties.
NatureThe nature of the process is voluntary, where the consent of both parties is taken.The nature of Adjudication is compulsory, where consent of both parties is not the concern.
ConfidentialityThe proceeding type is private, and no third party is involved in the case.It is a public proceeding, which means any person can view the process.
CostsIt demands lower expenses compared to Adjudication.It involves many things that are the reason it is costly.

What is Arbitration?

Arbitration is a method of settling any dispute where an independent third party gets involved in the parties, and because of that, the third party has the decision-making power about the raised situation. Both parties are binding to accept the decision taken by the third party.

By choosing the arbitration process, both parties agreed not to take the complaint to the court of Law. In most cases, this process is preferred to settle any contract-related dispute.

The main principle of the Arbitration procedure is that it is consensual and neutral. In the process, any conflicts can be settled only when both parties have agreed on something. For future purposes, usually, both parties add some clause in the contract.

In Arbitration, none of the parties enjoys any kind of home court. Both parties choose the Law, language, and venue of everything selected by both parties.

The Arbitrator usually pays attention to both sides, every detail by both parties, and the evidence and the decision depend on these. The decision always taken by the Arbitrator is known as the award, and both parties are legally bound to it.

What is Adjudication?

Adjunction is a court-based dispute resolution method carefully governed by the provisions and laws. The judgment given in the procedure is considered a decision that both parties are bound to.

It is a process involving a court hearing, which comes just after notice and the evidence related to the case. It can be referred to as the process of settle down a dispute with the help of a legal claim or the involvement of a court of Law.

Adjudication also presents the final judgment about any case and helps to determine the last course of action. In this process, court’s judge gets involved and resolves the issue between two different parties.

The hearing process of Adjudication is somewhat similar to the hearing process of Arbitration. Both parties come under the involvement of rights and obligations. As a result, the hearing process includes money or any nonviolent infraction.

The process of adjudication results in a legally binding judgment. The legal process is different from any other court case that is evidence-based. Adjudication is a form of settling down any dispute that arises between two individual parties.

Main Differences Between Arbitration and Adjudication

  • The person who decides in the case of Arbitration is known as the Arbitrator, whereas the authority that decides Adjudication is called the judge.
  • Constitution plays a more significant role in Adjudication, which is not mandatory for the Arbitration process.
  • The decision made in Arbitration is binding on the parties, but it is made on mutual consent. Contradictorily, in Adjudication, the decision is binding on both parties.
  • Both parties choose the place of suing in the case of Arbitration, whereas in Adjudication, the site is decided only by the court.
  • The proceeding is voluntary in Arbitration, whereas the proceeding is compulsory in Adjudication.
  • The arbitration process can resolve a dispute in lesser time, whereas Adjudication is a lengthy process.

Conclusion

Arbitration and Adjudication are both needed to resolve any kind of dispute. Compared to Adjudication, which involves the court, people prefer Arbitration between the two dispute resolution processes. There are many reasons for this preference, but most importantly, the arbitration method solves disputes quickly, lowers costs, and maintains confidentiality.

However, when both ways are compared based on reliability, Adjudication is the most preferred because it involves court and has legal recognition. Both procedures are helping citizens to solve the available conflicts in developing a peaceful region. The structure of both methods is completely different, where Arbitration is a bit more informal than Adjudication.

The judge in the courtroom, which is an entirely formal procedure, handles the adjudication process and decision-making can only be gained with the help of available legislation for a country.

References

  1. https://journals.sagepub.com/doi/pdf/10.1177/1365712720943333
  2. https://cadmus.eui.eu/bitstream/handle/1814/67990/LAW_2020_10.pdf?sequence=1&isALlowed=y 
  3. https://academic.oup.com/jiel/article-pdf/24/1/157/38841017/jgab001.pdf
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