Adversarial and Inquisitorial Procedures in Arbitration

Abstract

How should a dispute be settle between two opposing parties? The adversarial procedure invites the parties to make their cases to an impartial arbitrator, while the inquisitorial procedure requires the arbitrator to adjudicate on the basis of his own investigations. Even if it is assumed that the arbitrator is, on average, as well informed as the two opposing parties, the adversarial procedure is shown to be strictly superior. This superiority stems from the ability within the adversarial procedure to allocate the burden of proof in an effective manner, and thereby extract the maximal informational content from apparently inconclusive contests.