1. Introduction
In arbitration, the final decision is made by an arbitrator or a panel of arbitrators appointed by the disputing parties or an arbitration institution. This decision is known as an arbitral award, and it is legally binding on all parties involved.
Unlike court judgments made by judges, arbitration decisions are made privately by neutral arbitrators chosen for their expertise, impartiality, and integrity.
2. The Role of the Arbitrator
An arbitrator acts as a neutral third party who hears evidence, reviews submissions, and renders a final decision based on the facts, contract terms, and applicable law. Arbitrators perform a judicial-like function but operate within the private arbitration framework.
Their primary responsibilities include:
- Managing hearings and procedural schedules.
- Ensuring both parties have a fair opportunity to present their case.
- Interpreting contracts and applying relevant laws.
- Issuing a final and binding arbitral award.
Arbitrators are chosen because of their subject-matter expertise — such as in law, construction, finance, or international trade — ensuring informed and specialized judgments.
3. Appointment of the Arbitrator
The process of appointing an arbitrator varies depending on the arbitration agreement and institutional rules. Common appointment methods include:
- Mutual Appointment: Both parties agree on a single arbitrator.
- Three-Arbitrator Panel: Each party appoints one arbitrator, and those two select a third as the presiding arbitrator.
- Institutional Appointment: An arbitration body (like ICC, LCIA, or AAA) appoints the arbitrator when parties cannot agree.
Once appointed, arbitrators must remain independent, neutral, and free of conflicts of interest.
4. How Arbitrators Reach the Final Decision
The final decision in arbitration follows a structured process:
- Preliminary Hearings: The tribunal defines issues, sets timelines, and determines procedural rules.
- Evidence and Submissions: Both parties present written and oral evidence, witness statements, and expert opinions.
- Deliberation: The arbitrator or tribunal privately reviews all evidence and arguments.
- Award Drafting: The arbitrator writes a detailed award explaining reasoning, findings, and outcomes.
- Issuance of the Award: The decision is signed, dated, and delivered to the parties.
If there is a panel of three arbitrators, decisions are usually made by majority vote, unless the arbitration agreement specifies otherwise.
5. The Arbitral Award — The Final Decision
The arbitral award is the formal document that contains the arbitrator’s decision. It typically includes:
- A summary of the dispute and claims.
- Findings of fact and conclusions of law.
- The final decision on liability and damages.
- Allocation of costs and interest.
- The date and signatures of the arbitrators.
Once issued, the award is final and binding, meaning the dispute is conclusively resolved and the parties are obligated to comply.
6. Legal Authority of the Final Decision
The arbitrator’s final decision has the same legal effect as a court judgment once it is recognized or enforced by a court.
Under national laws such as the Arbitration Act 1996 (UK) or the Federal Arbitration Act (US), and international frameworks like the New York Convention (1958), arbitration awards are enforceable worldwide.
This means that if a losing party fails to comply voluntarily, the winning party can apply to a court to have the award converted into a judgment for enforcement.
7. Can Arbitrators’ Decisions Be Appealed?
Generally, arbitration decisions cannot be appealed in the traditional sense. This finality is one of arbitration’s key features. However, awards may be challenged in court on very limited grounds, such as:
- Fraud, corruption, or misconduct by the arbitrator.
- Lack of jurisdiction.
- Serious procedural irregularities.
- Violation of public policy.
Courts do not review the merits or re-evaluate the evidence. This ensures that arbitration remains efficient and conclusive.
8. Role of the Arbitral Tribunal in Multi-Arbitrator Cases
When an arbitration is handled by more than one arbitrator, the group is called an arbitral tribunal. The tribunal acts collectively to hear the dispute and deliver the award.
Key features include:
- Presiding Arbitrator: Leads the tribunal and manages hearings.
- Deliberation Process: Arbitrators discuss findings and vote.
- Majority Rule: Most tribunals decide by majority unless all must agree by contract.
The presiding arbitrator usually writes the final award on behalf of the entire tribunal.
9. Neutrality and Independence of Arbitrators
The integrity of arbitration depends on the neutrality of arbitrators. Before accepting appointment, an arbitrator must disclose any potential conflicts of interest.
During proceedings, arbitrators must:
- Act impartially and avoid bias.
- Treat both parties equally.
- Base decisions solely on evidence and law.
Failure to maintain neutrality can lead to challenges against the award.
10. Enforcement of the Final Decision
Once the arbitrator issues the award, the prevailing party may enforce it if the losing party does not comply. Enforcement can occur through:
- Domestic Courts: Converting the award into a judgment in the same country.
- International Recognition: Under the New York Convention, awards are enforceable in over 160 countries.
This gives arbitration decisions global legal strength and reliability.
11. Comparison with Court Decisions
| Aspect | Arbitration Decision | Court Judgment |
|---|---|---|
| Decision Maker | Arbitrator or Tribunal | Judge or Jury |
| Binding Nature | Final and Binding | Subject to Appeals |
| Confidentiality | Private | Public Record |
| Flexibility | Parties design procedures | Fixed by law |
| Enforceability | Globally recognized under conventions | Limited to national jurisdiction |
Thus, arbitration combines the authority of a court decision with greater flexibility and privacy.
12. Examples of Who Makes the Final Decision in Practice
- Commercial Arbitration: A retired judge or expert in the relevant field issues the final award.
- Construction Arbitration: A panel of engineers and lawyers renders the decision based on technical evidence.
- Investment Arbitration: An international tribunal under ICSID or UNCITRAL rules delivers the binding award.
In all cases, the final decision rests solely with the appointed arbitrator(s).
13. Factors Influencing the Arbitrator’s Decision
Arbitrators consider several factors before making their final decision:
- Contract terms and governing law.
- Evidence presented by both sides.
- Testimonies from witnesses and experts.
- Fairness and equity of the outcome.
- Procedural rules under which arbitration is conducted.
The goal is to deliver a just and enforceable resolution consistent with both the law and the contract.
14. The Finality Principle in Arbitration
The finality principle is one of arbitration’s defining features — the arbitrator’s decision is the last word on the matter. This principle promotes efficiency, prevents prolonged litigation, and ensures closure for both parties.
However, finality also means that mistakes of fact or law generally cannot be corrected unless serious misconduct or procedural injustice occurred.
15. Importance of the Arbitrator’s Final Decision
The arbitrator’s decision is crucial because it:
- Conclusively resolves the dispute.
- Provides legally enforceable remedies.
- Maintains confidentiality and neutrality.
- Upholds the parties’ contractual agreement to arbitrate.
It symbolizes the balance between autonomy and legal authority — private justice backed by public enforcement.
Frequently Asked Questions
1. Who makes the final decision in arbitration?
The arbitrator or arbitral tribunal makes the final decision, known as an arbitral award.
2. Is the arbitrator’s decision legally binding?
Yes, it is binding and enforceable under national and international law.
3. Can an arbitration decision be appealed?
Only on limited grounds like fraud, misconduct, or jurisdictional errors.
4. How is the arbitrator chosen?
By agreement of the parties, through institutional appointment, or by a court if parties cannot agree.
5. Does the arbitrator act like a judge?
Yes, but within a private framework, applying law and evidence to resolve the dispute.
6. Can an arbitration award be enforced internationally?
Yes, under the New York Convention, awards are enforceable in over 160 countries.
Conclusion
In arbitration, the arbitrator or arbitral tribunal makes the final decision, which is binding and enforceable just like a court judgment. The arbitrator’s role is to interpret the law, analyze evidence, and deliver a fair outcome while maintaining confidentiality and neutrality.
This system provides parties with a faster, flexible, and globally respected alternative to court litigation — ensuring justice through expertise, independence, and finality.