What is the outcome of arbitration?

Arbitration is a process in which a dispute between two or more parties is resolved by a neutral third party, known as an arbitrator. The essential aspect that defines arbitration is its binding nature; the decision made by the arbitrator is legally binding on the parties involved. This means that the parties must adhere to the arbitrator's decision, similar to a court ruling. This aspect differentiates arbitration from other forms of dispute resolution, such as mediation, where the mediator facilitates discussion but does not impose a legally binding outcome.

In contrast, the other options do not capture the essence of arbitration. The optional agreement between parties suggests a lack of compulsion in the resolution process, which is not the case with arbitration. A public announcement of the disagreement is unrelated to the confidential nature of arbitration and does not involve resolution. Lastly, while arbitration might lead to a financial settlement, it is not limited to just that; it encompasses any binding resolution to the dispute, which could involve other remedies as well. Therefore, the legally binding decision aspect is what makes arbitration a unique and significant form of alternative dispute resolution.