根据牛津高阶词典解释
arbitration：the official process of settling an argument or a disagreement by sb who is not involved: Both sides in the dispute have agreed to go to arbitration. 强调仲裁纠纷，对纠纷的仲裁用arbitration
sanction：（formal) official permission or approval for an action or a change: These changes will require the sanction of the court. 强调批准，对行为的批准用sanction，该行为特点不是纠纷而是申请批准，仲裁的重点是行为可不可以执行而不是有没有纠纷。
当然根据实际情况，两个单词也可以重合使用，只要语境合适