We can say that arbitration is based on mutual understandings.

1.       There are two types of arbitration process which are voluntary arbitration and compulsory arbitration. Voluntary arbitration is a process in which parties submit their issues in front of arbitrator by mutual understandings. If the parties are agreed to the arbitration, the court will require arbitration process on the behalf of agreement among both parties. This is the controlled process because arbitrators are chosen according to the understandings of both parties. We can say that arbitration is based on mutual understandings.