- 06-Nov-2025
- public international law
Arbitration offers a versatile and efficient means of resolving disputes outside of traditional court systems. Institutional arbitration and ad hoc arbitration are two widely used forms of arbitration, each with distinct characteristics and advantages. While institutional arbitration relies on an established organization for the administration of arbitration, ad hoc arbitration provides the parties with more flexibility and control over the process. Both methods have their strengths, and the choice between them depends on factors like cost, complexity, and the parties' preferences.
In institutional arbitration, the arbitration process is administered by a recognized arbitration institution. These institutions provide the necessary framework, rules, and administrative support throughout the arbitration process. Some of the most well-known arbitration institutions include:
In ad hoc arbitration, the parties involved in the dispute take full control over the arbitration process, without the involvement of an arbitration institution. The parties can agree on procedural matters, such as the appointment of arbitrators, the rules to be followed, and the venue of the arbitration.
| Feature | Institutional Arbitration | Ad Hoc Arbitration |
|---|---|---|
| Control Over Process | Managed by an arbitration institution with predefined rules | Parties have full control over the process and rules |
| Arbitration Rules | Institution’s set rules (e.g., ICC, SIAC, etc.) | Parties choose their own rules (e.g., UNCITRAL) |
| Administrative Support | Yes, by the institution | No, parties handle administration |
| Arbitrator Appointment | Appointed by the institution or following institutional rules | Parties appoint arbitrators |
| Costs | Generally higher due to institutional fees | Generally lower, as there are no administrative fees |
| Enforceability | High, due to institutional backing and international recognition | Depends on the agreement, but generally enforceable under conventions like the New York Convention |
| Flexibility | Less flexible due to institutional rules | Highly flexible, as parties decide on terms |
In this case, the dispute between two international corporations was resolved through ICC Arbitration, where the institution administered the entire process, including arbitrator appointment, procedural management, and award enforcement. The institution’s involvement ensured a smooth and efficient arbitration process.
Two Indian firms decided to resolve their commercial dispute through ad hoc arbitration under the UNCITRAL Arbitration Rules. The parties agreed on a sole arbitrator and conducted hearings without the support of any institutional body. Though the process was more flexible, the lack of administrative support led to some delays in the initial stages.
Both institutional arbitration and ad hoc arbitration offer distinct advantages and are suitable for different types of disputes. Institutional arbitration is ideal for parties looking for structure, administrative support, and efficiency, particularly in international disputes. On the other hand, ad hoc arbitration is well-suited for parties seeking flexibility, cost-effectiveness, and greater control over the process. The choice between these two options depends on the specific needs of the parties, the nature of the dispute, and their preferred level of involvement in the arbitration process.
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