Source : Webster's Revised Unabridged Dictionary (1913)

Arbitration \Ar`bi*tra"tion\, n. [F. arbitration, L. arbitratio,
   fr. arbitrari.]
   The hearing and determination of a cause between parties in
   controversy, by a person or persons chosen by the parties.

   Note: This may be done by one person; but it is usual to
         choose two or three called arbitrators; or for each
         party to choose one, and these to name a third, who is
         called the umpire. Their determination is called the
         award. --Bouvier

   {Arbitration bond}, a bond which obliges one to abide by the
      award of an arbitration.

   {Arbitration of Exchange}, the operation of converting the
      currency of one country into that of another, or
      determining the rate of exchange between such countries or
      currencies. An arbitrated rate is one determined by such
      arbitration through the medium of one or more intervening
      currencies.

Source : WordNet®

arbitration
     n 1: (law) the hearing and determination of a dispute by an
          impartial referee agreed to by both parties (often used
          to settle disputes between labor and management)
     2: the act of deciding as an arbiter; giving authoritative
        judgment; "they submitted their disagreement to
        arbitration" [syn: {arbitrament}, {arbitrement}]