n. arbitration is a form of mediation, where the authority to act as a mediating party is given by the disputants to some middle person or institution. In practice arbitration is generally used as a substitute for judicial systems. It is of prime importance in cases of judicial processes being ineffective or too slow, expensive or biased. Arbitration is also used by communities which lack formal law, as a substitute for formal law. In USA, arbitration is acknowledged by the law as a legal alternative to litigation whereby the parties to a dispute agree to submit their respective positions (through agreement or hearing) to a neutral third party acting as an arbitrator. Arbitrations can be, 1.)Voluntary, the ones made by mutual consent, in which the parties select arbitrators, and bind themselves by bond abide by their decision; these are made without any rule of court, or 2.) Compulsory arbitration.It is open to the parties to restrict the possible awards that the abitrator can make.