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.Arbitration is an informal trial held before a neutral court official called an arbitrator. Arbitration is a dispute-resolution process in which the parties select a neutral third party to resolve their claims. Arbitrate is when a neutral third party helps end a conflict. Arbitrate derives from the Latin arbiter "judge. It is a private process in which the parties to a dispute agree to submit their differences to an independent third party, called an arbitrator, for resolution. The word arbitrate can also be used in a more general way meaning "to determine or settle a dispute," similar to the word mediate.