Arbitration is a form of dispute resolution where the parties agree to submit their dispute to an impartial adjudicator, who renders a final and binding decision. Parties in international commercial transactions or construction projects often seek to resolve their disputes through arbitration because arbitration is often more efficient than judicial proceedings, provides a more economical and flexible option for businesses, and the arbitral proceedings and award are generally non-public.

The working languages of the CAA are Mandarin Chinese and English. The CAA encourages the parties to select either Chinese or English as the language to be used in the arbitral proceedings. Still, parties may opt to arbitrate in another major language.

Parties are encouraged to choose the law applicable to the substance of their dispute. They may choose a specific country's law or international rules or principles, such as the CISG (Convention of International Sale of Goods) or lex mercatoria to be the governing law of their contract. If the parties do not choose the applicable law, the arbitral tribunal will choose the law it deems appropriate.

Parties are also encouraged to choose the seat of arbitration, which is the geographical location and legal jurisdiction under which the arbitration is tried. The seat will normally determine the procedural rules (lex arbitri) the arbitration follows. The seat of arbitration does not have to be the same place where hearings are actually held. For example, the parties may select a seat in Taipei (therefore governed by the Taiwanese Arbitration Act and the CAA Arbitration Rules) but hold most of their hearings in Mainland China.