1. to act as arbiter upon (a disputed question) : to settle (a dispute between two people or groups) after hearing the arguments and opinions of both. To make an official decision that ends a legal disagreement between people or groups without the need for the disagreement to be solved in court.To judge or decide in or as in the manner of an arbitrator: arbitrate a dispute between neighbors. 2. Arbitration is a mechanism for resolving disputes between investors and brokers, or between brokers. ARBITRA'TION, noun. 1. Arbitrate is when a neutral third party helps end a conflict. Arbitrate derives from the Latin arbiter "judge. English common law has long recognized the duty of confidentiality as an implied obligation arising out of the parties' agreement to arbitrate. 2. A hearing before arbitrators, though they make no award. To judge or decide in or as in the manner of an arbitrator: arbitrate a dispute between neighbors. 2.