Ad Hoc & Institutional Arbitration:

Understanding the Nuances and the

Novelties of these two Alternatives in
Alternative Dispute Resolution

-Shashank Garg
Advocate, Chambers of Shashank Garg
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What is Ad Hoc Arbitration?

Simply put an Ad Hoc Arbitration is one which is not

administered/ monitored by any Arbitral Institution.

Thus, parties have to themselves decide the rules, appointments,

and procedure to be followed throughout the course of the arbitral
proceedings without the aid of any institution.

For initiating an Ad Hoc proceeding, the arbitration agreement,

irrespective of being arrived at before or after a dispute has arisen,
may simply state that 'disputes between parties will be arbitrated‘,
and not provide for a specific institution to govern it.
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Pertinent Point to be kept in mind

It is immensely The rationale behind

desirable to at least the above suggestion
In such instances, a
mention the 'seat' of is that say parties are
mere reference to the
the arbitration, as this unable to come to a
seat of the arbitration
will have a substantial ground w.r.t the
provided in the
impact on procedural law
contract can help end
multiple key governing the
the tussle and
problems such as the arbitration or the
determine the
arbitration's courts which will have
procedural law and
procedural laws and supervisory
supervisory court.
the award's jurisdiction over this
enforceability. arbitral proceeding.
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Advantages of Ad Hoc

Cost effective and suitable for

smaller claims.

Effectiveness is dependent on
the willingness of the parties to
co-operate.

Parties have to incur the

expenses directly, and not have
to pay through an institution
which charges for its services as
well.
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Disadvantages
Lack of co-operation by
either of the parties can
ultimately require a
recourse to the court.

Parties are already in a

dispute, and there is a
chance that may not be so
conducive to each others
demands on the tribunal,
procedure, etc.

Is not time-efficient as no
specific time is mandatorily
to be followed, but is based
on parties liking.
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Institutional Arbitration
Here in the entire arbitration is conducted pursuant
to the pre-defined rules of the chosen institution,
such as SIAC, HKIAC, ICC, DIAC, etc.

Such an institution is tasked with various aspects

pertaining to the administering of the arbitration
process, such as constitution of the tribunal,
administrative matters, financial scope, etc.

Often the contract between two parties will contain

an arbitration clause which will designate a
particular institution as the arbitration
administrator.
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Incentives for Institutional Arbitration

Institutional
arbitration relieves
parties and their
lawyers of the time
A compilation of and effort of deciding
qualified arbitrators on an arbitration
to opt from. procedure and
formulating an
arbitration clause that
the institution itself
provides.

The existence of pre-

established rules and
processes ensure the A recognised format
arbitral proceedings which is time tested.
are run in a timely
manner.

Ad Hoc vs Institutional
Ad Hoc is more flexible as
parties have the discretion to
chose every aspect of the
arbitration as per their
convenience. However, such
wide discretion leaves a lot of
room for uncertainty and
unwanted quarrels which makes
the process cumbersome.
8
Barring the hurdle of the costs
incurred in an institutional arbitration,
it is much more desirable for the
parties to opt for institutional
arbitration instead of the vague
ad hoc method. Rationale being that
everything is pre-defined and parties
merely have to initiate the proceedings
by nominating arbitrator(s) from a list
of qualified ones provided by the
institution itself.
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Delhi International Arbitration Centre

(DIAC)-Key Provisions

This can be done in

three circumstances.
First, if the disputes or
differences are identical
To ensure its efficiency,
and between the same
pursuant to clause 6 of
parties. Second, if the
the DIAC rules, the
dispute is between the
Tribunal may with the
parties having
parties consent, order
commonality of interest.
for consolidation of
Third, where such
proceedings.
disputes arise out of
separate contracts but
relate to the same
transaction.
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Fast Track Arbitration

To accelerate the
Separately provides for process, oral evidence
‘FastTrack Arbitration’ is dispensed with and
& ‘Emergency award has to be made
Arbitration’ in clauses within 6 months based
12 & 14 of the Rules on written submissions
respectively. and documents.

To opt for FastTrack

procedure, the parties
have a time limit of 1
month from the date of
constitution of the
tribunal.
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Emergency Arbitration
The Emergency
Arbitrator shall
A party can have the power to
order any interim
also write to relief that he
the Secretariat deems necessary,
for emergency which shall be
arbitration. enforceable.

Upon such The entire

request, process has to
appointment of be done away
the Emergency with within 7
Arbitrator will days of the
be made within appointment of
two business the Emergency
days. Arbitrator.
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International Chamber of Commerce

(ICC)- Key Elements

Revised rules were

released in 2021. A new Adapting in
provision allowing the accordance with the
joinder of additional contemporary times,
parties in the course of focus has been made
the arbitration [Article
7(5)], as well as an
to enhance
amendment allowing transparency by
the consolidation of requiring the parties to
cases in presence of disclose third-party
different parties [Article funding arrangements
10(b)] has been inserted [Article 11(7)].
.
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Investment Arbitrations
Pursuant to Article
To effectively address 29(6)(c) an
disputes pursuant to a established practice
treaty between has been codified that
different nations, w.r.t to investor-State
Article 13(6) and disputes, the choice of
Article 29 (6) (c) emergency arbitration
enumerate essentials. does not exist.

Article 13(6) strives to

ensure the tribunal's
complete independence
in situations
concerning the public
interest by requiring
that no arbitrator be of
the same country as any
party.
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Thank you!