Learn how arbitration can resolve certain disputes out of the court. Instead of a judge, impartial arbitrators make the legal decision.The FAA applies to all arbitrations arising from maritime transactions or to any other contract involving "commerce," a term the courts define broadly. Any civil, non-domestic action, other than an appeal from a court of limited jurisdiction, is subject to arbitration under this statute. I. What Is Arbitration? Arbitration is an alternative to traditional judicial proceedings. An arbitration is a way to resolve a legal dispute.