arbitrationar·bi·tra·tion /ˌɑːbəˈtreɪʃənˌɑːr-/ noun [uncountableU]1LAW when a legal disagreement is dealt with by independent officials who have the authority to make a legal decision about it, rather than the case being dealt with in a court of lawDisputes within the partnership can be referred to arbitration, avoiding the risks and costs of litigation.
2HUMAN RESOURCES when a disagreement between an employer and employees is dealt with by independent officials who try to reach an agreement between both sides in order to prevent a STRIKE or a legal battleContract negotiations between them have reached deadlock and are likely to go to arbitration.
The arbitration agreement only applied to the missing oil, not to the other allegations of wrongdoing.