Comment on the following with reference to ratio in leading cases, if any: Pre-requisites of arbitration.

Arbitration has been defined as a mode of settlement by referring a dispute to a tribunal of the parties' own choice without them having to resort to a court of law. Every arbitration must have the following three pre-requisites: a dispute between parties to an agreement, requiring a settlement; its submission for a settlement to a third person; and a decision by such third person according to his own judgement based on the facts and circumstances of the dispute, which is binding on both the parties. There should be a valid and binding agreement between the parties.