5 benefits of commercial arbitration

  • Posted By: Aptum Admin
  • October 21, 2025
  • 4 Minute(s) to read

If there was a pathway to resolve your commercial dispute faster, with more control over legal spend, and with privacy, why wouldn’t you use it?

Yet, many companies still shy away from arbitration as a dispute resolution method, or just simply aren’t familiar with it.

In this article:

What is arbitration?

Arbitration is a confidential method of resolving disputes, commonly used in both domestic and international commercial contexts.

It involves the appointment of an independent arbitrator by the parties involved, who is tasked with reviewing the case and issuing a final decision. This decision, known as an arbitral award, is legally binding and can be enforced through the courts.

When resolving commercial disputes, there are a whole range of potential benefits to businesses using arbitrations.

Benefits of arbitration

1. Speed: A faster route to resolution

Unlike traditional litigation, which can drag on for months or even years, arbitration is designed to move quickly.

  • Fewer procedural hurdles mean less time spent on motions, hearings, and other formalities.
  • Flexible scheduling allows arbitrators to set hearing dates that suit the parties involved, avoiding the backlog often seen in courts.
  • Streamlined evidence and discovery processes reduce delays and keep the focus on resolving the core issues.

For businesses, this means disputes can be resolved sooner compared to how long litigation typically takes, enabling you to achieve an outcome and resume focus on your core activities faster.

2. Efficiency: Focused and cost-effective dispute resolution

Because of the shorter timeframe, arbitration encourages a leaner, more focused approach to dispute resolution.

  • With a compressed timeline, parties and their legal teams concentrate on the most relevant facts and arguments.
  • This avoids the ‘boil the ocean’ approach often seen in litigation, where every possible issue is explored, regardless of its relevance. Instead, you are more likely to adopt an investment mindset approach to dispute resolution, as there simply isn’t enough time to investigate every possible avenue.
  • As a result, cost savings tend to emerge when time and effort are directed only toward what truly matters, avoiding wasted expenditure on issues that may be irrelevant to the determining the final outcome.

A recent arbitration handled by Aptum is a prime example of this efficiency in action.

Faced with a complex commercial dispute, Aptum worked with the client to constrain the scope of the arbitration to the central issues, crafting a legal strategy that was both streamlined and sharply focused. This avoided unnecessary legal spend and directed resources toward resolving the dispute efficiently. The result was a cost-effective process that ultimately led to a successful outcome for the client.

3. Control: Tailor the process to your needs

One of arbitration’s most attractive features is the ability to shape the process.

  • Parties can influence a range of procedural processes, such as the interlocutory process, the location of hearings, and even the choice of arbitrator—someone with industry-specific expertise.
  • You can also influence the scope of discovery, timelines, and how evidence is presented.
  • This level of control allows businesses to strategically manage legal costs, be confident that the dispute is on the right track, and ensure the process aligns with their commercial priorities.

Arbitration puts you in the driver’s seat—something the litigation process can sometimes struggle to offer.

4. Confidentiality: Protect your business interests

Whilst disputes through the courts are public, the private nature of arbitrations can have a range of benefits for parties.

  • Sensitive commercial information, such as trade secrets, financial data, or internal communications can be kept out of the public eye.
  • Reputational risks are minimised, especially in high-stakes or high-profile disputes.
  • Business relationships can be preserved more easily when disputes are handled discreetly.

For companies concerned about brand integrity or competitive advantage, confidentiality is a powerful reason to choose arbitration.

5. Finality: Certainty in outcomes

Arbitration awards are binding and enforceable, with limited grounds for appeal.

  • This means greater certainty for businesses—once a decision is made, it’s usually final.
  • While this can be a double-edged sword (unsuccessful outcomes are hard to overturn), it also prevents prolonged disputes and endless appeals.
  • Finality allows businesses to move forward confidently, knowing the dispute is truly behind them.

In circumstances where complex disputes are often elongated through the courts, and it can be hard to understand what to expect, finality is a valuable asset.

So, given the clear benefits of arbitration as a dispute resolution method, the question must be asked…

Why aren’t more businesses using arbitration?

Despite the above benefits, litigation through the courts remains the default choice for many businesses, particularly for high-value disputes.

There are a few key reasons for this.

Lack of pre-existing arbitration clauses

Most arbitrations occur because the underlying contract includes a dispute resolution clause that mandates arbitration.

If businesses haven’t included such clauses in their agreements, arbitration may not even be considered when a dispute arises. This means arbitration is often missed at the contract drafting stage, not at the dispute stage.

Cultural and knowledge gaps

Many companies simply aren’t familiar with the arbitration process or its benefits. There is a perception that litigation is the default or ‘standard’ path. This lack of awareness leads to hesitation, even when arbitration could offer a better outcome.

Importantly, businesses can voluntarily agree to arbitrate a dispute even if their contract doesn’t contain an arbitration clause. However, this option is often overlooked.

Need for mutual agreement

Arbitration requires both parties to agree to resolve the dispute this way. If one party believes they’re better served by the court system—whether due to perceived strategic advantage, familiarity, or legal advice—they may resist arbitration. Even if that belief isn’t well-founded, it can block the pathway to arbitration.

What can businesses do to better access arbitration?

To unlock the benefits of arbitration, businesses should:

  • Include arbitration clauses in commercial contracts from the outset.
  • Educate internal stakeholders about the arbitration process and its advantages.
  • Consult an arbitration lawyer who is experienced in arbitration or international commercial arbitration and can guide the strategic use of it.
  • Consider arbitration proactively, even after a dispute arises, as a viable alternative to litigation.

Arbitration isn’t just an alternative to litigation; it’s often a better one. It offers speed, efficiency, control, confidentiality, and finality, all of which are critical to modern businesses navigating complex commercial landscapes.

If your company hasn’t considered arbitration as part of its dispute resolution strategy, contact Aptum to explore its suitability for your circumstances.

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