Arbitration is formally defined as a voluntary dispute resolution process in which

one or more arbitrators, appointed in accordance with the agreement of the parties,
or rules promulgated pursuant to law, resolve a dispute by rendering an award.
Disputes submitted to arbitration are more speedily resolved. Unlike judges,
arbitrators do not have to contend with heavy caseloads. The parties can choose
arbitrators whose schedules can accommodate the long hours necessary to hear
and decide a case.
Foreign investors who are not familiar with local court procedures may prefer a
more neutral process. Arbitration allows the parties to choose or craft the rules that
will govern the arbitration proceedings. Since the procedure is mutually agreed
upon, the parties have more faith in the integrity of the process. Also, the parties
need not be bound by the strict rules of evidence.
Arbitration, being essentially consensual in nature, is dependent on the existence of
an agreement that is valid as to form and substance. Without an agreement that
constitutes the basis of arbitral competence, the arbitrator or the arbitral tribunal is
without jurisdiction to conduct any proceedings, much less render any decision
binding on the parties or on States in which enforcement may be sought