Alternative dispute resolution (ADR; known in some countries, such as Australia, as external dispute resolution) includes dispute resolution processes and techniques that act as a means for disagreeing parties to come to an agreement short of litigation. In arbitration, participation is typically voluntary, and there is a third party who, as a private judge, imposes a resolution. 2  Arbitrations often occur because parties to contracts agree that any future dispute concerning the agreement will be resolved by arbitration. 3  This is known as a 'Scott Avery Clause'.