ARBITRATION is the adjudication upon a matter in controversy between private individuals appointed by the par ties. This mode of settling differences is very frequently resorted to as a means of avoiding the delay and expense of an action at law or a snit in equity. It has the advantage of providing an efficient tribunal for the decision of many causes —such, for instance, as involve the ex amination of long and complicated accounts,—which the ordinary courts are, from their mode of proceeding and the want of proper machinery, incompetent to investigate.
The person appointed to adjudicate is called an arbitrator, or referee. The matter on•which he is appointed to adju dicate is said to be referred or submitted to arbitration. His judgment or decision is called an arbitrament, or, more usually, an award Most matters actually in controversy between private persons may be referred to arbitration; but an agreement to refer any differences which may hereafter arise is not binding, for the parties cannot be compelled to name an arbitrator. But an agreement may be made to refer any dis pute that may arise to arbitration, with a condition of certain penalties, to be paid by the party who shall refuse to agree in the appointment of an arbitrator. No injury can be the subject of an arbitration, unless it is such as may be a matter of civil controversy between the parties : a felony, for instance, which is a wrong, not to the party injured merely, but to society in general, cannot be referred.
There are no particular qualifications required for an arbitrator. In matters of complicated accounts, mercantile men are usually preferred. In other cases, it is usual to appoint barristers, who, being accustomed to judicial investigations, are able to estimate the evidence properly, to confine the examination strictly to the points in question, and, in making the award, to avoid those informalities for which it might afterwards be set aside. Both time and expense are thus saved by fixing on a professional arbi trator. Any number of persons may be named as arbitrators : if the number is even, it is usually provided that, if are divided in opinion, a third person shall be appointed, called an umpire, to whose sole decision the matter is then referred.
A dispute may be referred to arbitra tion, either-1. When there is an action or suit already pending between the par ties relating thereto, or-2. When there is no such action or suit.
1. In the former case, the parties to the action or suit, if sui furls, are in general competent to submit to arbitration. The reference may be made at any stage of the proceedings : if before trial, it is effected by a rule of the court of law or an order of the court of equity in which the action or suit is brought ; if at the trial, by an order of the judge or an order of Nisi Prius, either of which may afterwards be made a rule of court. The usual mode of proceeding in a case referred to arbi tration where an actiola is pending, is for the parties to consent that a verdict shall be given for the plaintiff for the damages laid in the declaration, subject• to the award of the arbitrator.
The person named as arbitrator is not bound to accept the office, nor, having accepted, can he be compelled to proceed with it. In either case, if the arbitrator refuses or ceases to act, the reference is at an end, unless the contingency has been provided for in the submission, or unless both parties consent to appoint some other person as arbitrator in his stead.
The order of reference usually pro vides that the award shall be made within a certain period; and if the arbitrator lets the day slip without making his award, his authonty ceases, but a clause has usually been inserted to enable the arbitrator to enlarge the time ; and now, independently of any such clause, the court, or any judge thereof, is, by the late statute for the amendm ea of the law (3 & 4 Will. IV. c. 42), empowered to do so. The authority of an arbitrator ceases as soon as he has made or declared his award. After this (even though it be before the expiration of the time ap pointed) he has no longer the power even of correcting a mistake.