Arbitration

Arbitration Definition: Arbitration in debt collection is a form of Alternative Dispute Resolution (ADR) where the lender and borrower agree to resolve their loan dispute privately before an appointed arbitrator rather than in a civil court.

Why it matters in Debt Collection

• Governed by the Arbitration and Conciliation Act, 1996.
• Highly effective because arbitration awards are legally binding and enforceable as court decrees.
• Included as a default 'Arbitration Clause' in modern loan agreements.