In contractual arbitration there is settlement of disputes by a private arbiter or neutral appointed by the parties themselves, whose decision or award they have agreed or volunteered to abide by. This is a choice of forum where the parties have opted for arbitration instead of the public justice dispensing system of courts.
As a result the parties cannot back track from the arbitration agreement and file a suit on any dispute covered by the subsisting arbitration agreement. Still if any party institutes any suit ignoring the arbitration clause, the aggrieved party can move the court to compel the violator to proceed in arbitration instead for redress of his grievances.
However, while pursuing remedy in courts in the above case the time limit for arbitration might have expired. In some jurisdictions or states the courts are empowered to stop the clock to prevent such an eventuality and facilitate to move in arbitration from court.
Compulsory Arbitration
For specified matters of complex, specialized or protracted nature the concerned regulation or statute may provide for settlement of disputes by mandatory arbitration. Such matters are not convenient for litigating in courts or for a grand jury trial. Experts with specialized knowledge in relevant disciplines are appointed as arbitrators to resolve disputes in such matters. For instance certain disputes under the Internal Revenue Code or bargaining disputes of unionized labor attract the provisions of compulsory arbitration.
