Arbitration, one of the important methods of settling civil and economic disputes, means that both parties involved in the dispute reach an agreement before or after the dispute to voluntarily submit the dispute to a neutral third party for hearing and making a ruling with binding force to both parties of the dispute.
Arbitration system follows the following principles. Firstly, arbitration is in line with the principle of voluntariness, respecting the wishes of the parties involved. Both parties will determine upon negotiation whether to settle the dispute by way of arbitration and the specific arbitration agency. The composition of arbitration tribunal and the selection of arbitrators will be decided by the parties involved. As for foreign affairs arbitration, the rules of procedures and the substantial regulations applicable to the arbitration can also be negotiated among the parties involved.
Besides, arbitration is non-governmental. Arbitration agencies are not under the control of administration authorities or other arbitration agencies. Arbitration system is a non-governmental and self-governing dispute settlement method. Arbitrators hearing cases are also non-governmental figures. An arbitration award with legally compulsory force will become legally effective once it is made. The party assuming obligation shall fulfill the obligation within the stipulated time limit. Otherwise, the obligee may apply to a court for compulsory execution according to the effective arbitration award to ensure the execution of the award through state jurisdiction.
Finally, arbitration awards are final. In other words, once an arbitration agency makes an award concerning a case, the award will take effect immediately and have corresponding legally binding force towards both parties involved. The parties involved shall not apply for arbitration of the same case to arbitration agencies again or file a lawsuit to a court.
