The finality of arbitration, and lack of judicial review or appeal, is often held up as an important reason for the use arbitration as a dispute resolution mechanism. Finality refers to the absence in most jurisdictions of extensive appellate review of arbitral awards.1 As a general rule, the decisions of arbitrators are final and binding.2 In federal courts in the United States, for example, judicial review of arbitration awards is extremely limited3—in marked contrast to federal and state court litigation, where appellate courts may review certain lower court judgments under the de novo standard that allows them to review both factual and legal matters.
The benefit of limited appellate review of arbitration awards is a reduction in litigation costs and delays.4 Indeed, the notion of a dispute without the possibility of a lengthy appellate process is part of the reason that arbitration is perceived to be more efficient than litigation.
