What is the main characteristic that distinguishes Arbitration from Mediation?

Arbitration is primarily characterized by its binding nature, meaning that the decision made by the arbitrator is legally enforceable and parties are required to adhere to it. This differs significantly from mediation, where a neutral third party facilitates negotiation and dialogue between disputing parties but does not impose a decision; the outcome is non-binding unless the parties reach a mutual agreement.

In arbitration, the process culminates in a final ruling that resolves the dispute, akin to a court judgment, whereas mediation focuses on encouraging the parties to find their own amicable resolution, which can provide more flexibility and control over the outcome. This distinction highlights the more formal and conclusive nature of arbitration compared to the informal and collaborative approach of mediation.