(iii) Arbitration or expert determination?

It is important to distinguish dispute settlement by arbitration from expert-determination proceedings. Arbitration is suitable when the parties have a true dispute, for example differing opinions on the interpretation of a contract, disputes as to whether one party can be held liable, or a deadlock in decision making. In the case of deadlock, a more sophisticated mechanism such as mediation or a dispute board would probably be more desirable. Expert-determination proceedings are relevant in relation to matters that require the establishment of facts. Accordingly, many argue that arbitration relates to legal issues whereas expert determination relates to matters of fact.

Of course, the parties may be in dispute on the establishment of a certain value, amount or quality level, and most disputes can be traced back to questions about how much a party should pay. In practice, it is often best to determine the appropriate procedure based on the issue at hand.