Are arbitration decisions binding or non-binding?
In both Alberta and British Columbia, arbitration decisions are binding. By choosing to engage in arbitration and signing an arbitration agreement, parties are effectively giving the arbitrator the authority to make a decision that is legally binding on the legal issues presented.
The scope of the arbitrator's authority is specifically defined by the issues outlined in the arbitration agreement. This means the arbitrator's jurisdiction is limited to resolving only those legal matters that the parties have agreed to submit to arbitration. It's akin to appointing a private judge whose decisions on the agreed-upon issues carry the same weight and enforceability as those made in a court of law.
Therefore, it's essential for parties to understand that entering into an arbitration agreement is a significant commitment. The decision rendered by the arbitrator is not just a recommendation or a casual resolution; it is a binding determination that the parties must adhere to, much like a court order. This binding nature of arbitration underscores the importance of carefully considering and agreeing to the terms set forth in the arbitration agreement before proceeding.
