Arbitration is a term that is associated with the ability or the act of arbitrating. This verb, which comes from the Latin arbitrāre, for its part refers to grant or suggest arbitrary.
When it is said of a person, the arbitration names the procedure that is developed in freedom; said of a third party, it is about solving a dispute between several parties.
According to DigoPaul, arbitration, therefore, involves developing the role of arbitrator and resolving certain issues. In sport, the referee is the person who is responsible for ensuring compliance with the regulations of the discipline in question. All the participants have to obey her orders, since she is the maximum person in charge on the playing field. The number of referees per game depends on the sport in question.
In the case of soccer, for example, there is the participation of a main referee; two collegiates who act as assistants to that and who are located in what are the bands of the field of play; and a fourth referee who is the one who helps the first to carry out the annotation of warnings or changes and who will also be in charge of replacing any of the previous three who have to leave their functions due to injury.
Currently, on many occasions, the teams that face each other in a match complain about the refereeing and the errors that these collegiate commits when it comes to whistling for fouls, establishing offside, expelling players or canceling goals. Hence, a series of technological devices have emerged with the aim of correcting these human errors, such as slow cameras or the system called hawk’s eye.
In the field of law, arbitration is an alternative to resolve conflicts of interest without having to reach the usual jurisdiction. The parties to the conflict decide to choose a third party that enjoys independence (the arbitrator), who will be in charge of solving the dispute and pronouncing what is known as the arbitration award. For this, you must act with equity and respect the legislation agreed upon by the parties.
In this field, it must be emphasized that basically two clearly differentiated types of arbitration are established. Thus, in the first place, there would be the one known as independent, which is the one in which the parties in conflict are the ones who choose the arbitrator or arbitrators who are going to act in the process and are also the ones who determine the rules to follow.
Second, there is the so-called institutional arbitration. As its own name indicates, it is a specific institution that determines both the aforementioned rules and the person who will be in charge of acting as arbitrator.
In economics and finance, arbitrage involves seeking a profit on the price difference that exists between various markets. For this, complementary operations are carried out that allow the capitalization of the different prices. Through arbitration, those involved gain instant benefit.
In this sense, the entity in charge of the arbitration is called arbitrageur and is usually an investment firm or a bank.