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Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts.he parties to a dispute refer it to arbitration by one or more persons (the arbitrators, arbiters or  arbitral tribunal ), and agree to be bound by the arbitration decision (the  award ).
It is sometimes described as the 'applicable law', 'governing law' or 'law of the contract'. In most jurisdictions, the parties are free to choose the law that will apply. An arbitration agreement will generally set out its governing law at the outset, and the parties' right to do so is enshrined in various international conventions and institutional rules. For example the rules of the London Court of International Arbitration (LCIA) provide that: [t]he Arbitral Tribunal shall decide the parties' dispute in accordance with the law(s) or rules of law chosen by the parties as applicable to the merits of their dispute.