Arbitration is when the parties to a dispute agree to let a neutral third partyan arbitratorhear the case and decide on a binding decision. When a dispute arises that parties cannot resolve on their own, arbitration may be a helpful process for them.In arbitration you generally present your case to a single individual that makes the decision. Arbitration is a dispute resolution process that provides an alternative to traditional litigation. Arbitration is a form of alternative dispute resolution where parties refer their matter to one or more neutral arbitrators for a binding determination. Arbitration is a form of alternative dispute resolution.