Arbitration is an informal trial held before a neutral court official called an arbitrator. 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.An arbitration hearing is an informal legal proceeding held before a neutral court official called an arbitrator. To judge or decide in or as in the manner of an arbitrator: arbitrate a dispute between neighbors. 2. Here's a closer look at how the process works, and tips for preparing your case for a courtordered arbitration (specifically in North Carolina). Arbitrate. (ˈaːbitreit) verb. To act as an arbitrator in a dispute etc. The third party neutral (the 'arbitrator', 'arbiter' or 'arbitral tribunal') renders the decision in the form of an 'arbitration award'. The Uniform Arbitration Act does not embrace agreements to arbitrate disputes which may arise between the parties in the future. To judge or decide in or as in the manner of an arbitrator: arbitrate a dispute between neighbors. 2.