Arbitration is a form of alternative dispute resolution. It is a way for private parties to sort out disagreements according to agreed-upon rules.Therefore, you must have either agreed before the dispute arose (i.e. A clause in the contract) or have agreed after the dispute arose to go to arbitration. Documents may contain multiple clauses to handle different disputes that arise during a business deal. The Texas Arbitration Act. An arbitration clause usually identifies the organization that will provide arbitrators and set rules for the procedure. Your contract may contain an arbitration clause, which will require the parties to use a more private dispute resolution process instead of going to court. Arbitration is a dispute resolution process that provides an alternative to traditional litigation. (c) The court shall stay the arbitration if the court finds for the party moving for the stay.