Arbitration is a process for settling disputes related to the contract. Many contracts contain a mandatory arbitration clause.Alternative dispute resolution, or "ADR" refers to a variety of processes for resolving disputes without going to trial. Arbitration is the most traditional form of private dispute resolution. Arbitration is a binding procedure. Initiation under an Arbitration Clause in a Collective Bargaining Agreement. Arbitration under an arbitration clause in a collective bargaining agreement. Arbitration can either be binding or non-binding.