Arbitration is a procedure in which a dispute is settled by an impartial adjudicator whose decision agreed to or ordered by the parties to the dispute will be final and binding. There are limited rights to review and appeal arbitration awards. Arbitration procedures are not the same as: judicial proceedings (although in some jurisdictions, judicial proceedings are sometimes referred to as arbitration), out-of-court settlement of disputes (ADR), mediation (a form of transaction facilitated by a neutral third party). U.S. Secretary of State William Jennings Bryan (1913-1915) worked vigorously to promote international arbitration agreements, but his efforts were thwarted by the outbreak of World War I. Bryan negotiated 28 treaties that promised to settle disputes before the war between the signatory states and the United States broke out. He made several attempts to negotiate a contract with Germany, but ultimately never succeeded. The agreements, officially known as “peace-promoting treaties,” provide for conciliation procedures rather than arbitration.  Arbitration treaties were negotiated after the war, but attracted far less attention than the negotiating mechanism created by the League of Nations. It is often easier to impose arbitration awards in a foreign country than court decisions. Under the 1958 New York Convention, an arbitral award issued in a state party can, as a rule, be freely applied in any other State Party, under certain limited defences.
Only foreign arbitration awards are executed in accordance with the New York Convention. An arbitration decision is foreign when the award has been rendered in a state other than the state of recognition or in which foreign procedural law has been used.  In most cases, these disputes are settled without a public record of their existence, the loser voluntarily complies, although UNCITRAL proclaimed in 2014 a rule of public disclosure of investor-state disputes.  By far, the most important international instrument for arbitration is the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitration Awards, commonly referred to simply as the “New York Convention.” Almost all major trading countries are signatories and only a handful of countries are not parties to the New York Convention. This clause indicates which seat or place of arbitration will be. The seat of arbitration is important, especially in international commercial arbitrations, as it determines the procedural laws governing arbitration. It is not necessarily the same as the location of the hearings. The seat of arbitration is considered a place where arbitration takes place, even if the location of the hearings is different. The location of the hearings has no influence on the chosen arbitration seat. Arbitration may be either voluntary or mandatory (while mandatory cases can only come from a law or contract imposed by one party to another, in which the parties agree to refer all existing or future disputes to arbitration without necessarily knowing what disputes will ever arise) and may be binding or non-binding.
Non-binding arbitration is similar to mediation, as no decision can be imposed on the parties. However, the main difference is that a mediator will try to help the parties find a balance on which the compromises are made, but the (non-binding) arbitrator remains completely removed from the settlement process and will only give an assessment of liability and, if necessary, an indication of the amount of damages to be paid.