An arbitration clause requires that disputing parties submit to arbitration when a dispute arises. So agreeing to have arbitration be one's sole resort for resolving some future dispute is what's known as a pre-dispute arbitration agreement.Arbitration: Arbitration is an alternative to going to court. The statute (Ā§ 1281.97) defines a drafting party's failure to pay arbitration fees "within 30 days after the due date" as a "material breach" of the contract. Arbitration is essentially a paid private trial, in other words, a method to resolve disputes without going to court. By signing an arbitration agreement, employees give up their rights to have a jury hear and decide their case.