Arbitration is a much more formal process than mediation.  Arbitration does not involve having the dispute determined by a judge or jury in a court of law, but it does have very similar attributes to a court setting.  A single arbitrator or panel – selected by the parties – typically hears opening statement of the attorneys, followed by oral testimony of witnesses and introduction of documentary evidence, followed by closing statements of the parties or their counsel.  And then, without further participation by the parties or their counsel, after due consideration of the evidence and the argument of counsel, the arbitrator or panel announces a decision that is reduced to writing. 

The most significant differences between arbitration and litigation is that the parties choose the decision-maker in arbitration and the entire arbitration hearing and decision are often confidential.  The proceedings are not open to the general public.