Arbitration, Mediation and Conciliation · Conceptual Framework of International Commercial Arbitration

Institutional vs Ad Hoc International Arbitration

Updated 11 October 2026 · Fact-checked

In **ad hoc arbitration**, the parties design and run the process themselves. In **institutional arbitration**, an institution administers the case under its own rules, such as ICC, LCIA, SIAC or ICADR. Answer by comparing who appoints, who administers, cost, speed, certainty and fallback support, then link it to the Act.

Understand Institutional vs Ad Hoc International Arbitration

Every arbitration rests on an arbitration agreement. The next question is who manages the process. That choice gives two models.

In ad hoc arbitration, no institution manages the case. The parties agree the appointment method, procedure, place, language and fees. They may adopt rules such as the UNCITRAL Arbitration Rules, but no body administers them. Section 2(6) of the Act lets parties authorise any person, including an institution, to decide a matter the Act leaves to them. Section 11(2) leaves the appointment procedure to them as well.

In institutional arbitration, the parties name an institution in the clause. It applies its rules, helps appoint the tribunal, collects fees and deposits, and supervises the timetable. Some institutions also review the draft award. Section 2(8) says an agreement of the parties includes any arbitration rules referred to in it. So choosing an institution's rules brings those rules into the agreement.

Major institutions you should know: ICC (International Chamber of Commerce, Paris), LCIA (London Court of International Arbitration), SIAC (Singapore International Arbitration Centre) and ICADR (International Centre for Alternative Dispute Resolution, India). Each has its own rules, fee scale and appointment method. Check the institution's current rules before relying on any detail.

The trade-off is simple. Ad hoc gives flexibility and can cost less in fees, but it works only if both sides cooperate. If one party stalls on appointing an arbitrator, the matter may go to court. Under Section 11(4) and (5), this means the Supreme Court or High Court, or a person or institution designated by it. Under Section 11(12)(a), where the matter arises in an international commercial arbitration, that court is the Supreme Court. An institution reduces such delay because its rules already provide for appointment, challenge and administration. The price is administrative fees and less freedom.

Key rules to remember

Ad hoc arbitration: Parties design and run the process; no institution administers it; Parties fix appointment, procedure, place, language and fees themselves.
Institutional arbitration: Institution + its rules + administration of the case; Rules referred to in the agreement form part of the agreement (Section 2(8)).
Parties may authorise an institution: Section 2(6): freedom to determine an issue includes the right to authorise any person, including an institution; Does not apply to Section 28, which deals with the rules applicable to the substance of the dispute.
Fallback appointment in ad hoc cases: Section 11(4), (5), (6): appointment by the Supreme Court or High Court, or its designate; Under Section 11(12)(a), in an international commercial arbitration the reference is to the Supreme Court.
Timing under Section 11: 30 days to appoint or agree; court to endeavour to dispose of the application within 60 days of service of notice; Section 11(4), (5) and (13).
Court's scope at appointment: Section 11(6A): confine to examining the existence of an arbitration agreement; Applies to applications under Section 11(4), (5) or (6).

How to solve Institutional vs Ad Hoc International Arbitration questions

Use this method for any question on institutional versus ad hoc arbitration.

1Define both models in one line each: who runs the process.
2State what the parties control in each model: appointment, procedure, fees, timetable.
3Compare on clear heads: administration, appointment of arbitrators, cost, speed, certainty, fallback if a party does not cooperate.
4Apply the Act: Section 2(6), Section 2(8) and Section 11 as the facts require.
5Name the institutions asked about, such as ICC, LCIA, SIAC or ICADR, and state only what you are sure of.
6Apply to the facts: judge the clause given and the relationship between the parties.
7Conclude with a clear recommendation and one drafting point, such as naming the institution, rules, seat and number of arbitrators.

Quickest way: Compare-Apply-Advise

When to use it: Use it for short-answer questions or when time is tight.

Write one-line definitions of both models.
List four contrasts: administration, appointment, cost, certainty.
Add Section 2(8) or Section 11 in one sentence.
Give your advice for the facts in one line.

Common mistakes in Institutional vs Ad Hoc International Arbitration

Saying ad hoc arbitration has no rules at all.
Students confuse no institution with no procedure.
Fix: Say parties set their own rules or adopt rules like UNCITRAL, but no institution administers the case.
Treating institutional arbitration as always faster and cheaper.
Students memorise advantages as absolutes.
Fix: Say it usually adds certainty and support, but adds administrative fees and gives less flexibility.
Saying a court must appoint arbitrators in every ad hoc case.
Section 11 is remembered without its condition.
Fix: Court appointment arises only if the agreed procedure fails or no procedure exists, or the parties fail to agree within the time limits.
Writing that a High Court appoints in an international commercial arbitration.
Section 11(12) is overlooked.
Fix: Under Section 11(12)(a), for international commercial arbitration the reference is to the Supreme Court.
Giving detailed fee figures or case statistics for ICC, LCIA or SIAC.
Students try to impress with numbers.
Fix: Stick to features you are sure of: seat, role and administration. Avoid figures that change with rule updates.
Mixing up seat and institution.
Both appear in the clause.
Fix: The institution administers the case. The seat is the legal place of arbitration. They can be in different countries.

Worked examples

Example 1

Explain how institutional arbitration differs from ad hoc arbitration. Which would you advise for a contract between an Indian company and a foreign supplier?

Show the solution

Define: in ad hoc arbitration, the parties themselves arrange and run the process. In institutional arbitration, a named institution administers it under its rules.
Contrast appointment: ad hoc depends on the agreed procedure, failing which Section 11 applies. Institutions have built-in appointment and challenge procedures.
Contrast cost and flexibility: ad hoc avoids administrative fees and allows tailoring, but needs cooperation. Institutional adds fees but gives structure and support.
Apply the law: by Section 2(8), the institution's rules form part of the agreement. Under Section 11(12)(a), a court appointment in an international commercial arbitration goes to the Supreme Court, which adds delay.
Advise: parties from different countries with limited trust are better served by institutional arbitration, because the institution supplies a neutral process.

Answer: Institutional arbitration is administered by an institution under its rules. Ad hoc arbitration is run by the parties. For an Indian company and a foreign supplier, institutional arbitration (for example under ICC, SIAC or LCIA rules) is advisable for neutrality and certainty.

Example 2

A clause says: Disputes shall be referred to arbitration. It names no institution, no rules and no appointment method. The parties are an Indian company and a foreign company. One party refuses to agree on a sole arbitrator within 30 days of a request. What is the position?

Show the solution

Classify: the clause names no institution or rules, so the arbitration is ad hoc.
Identify the rule: Section 11(2) lets parties agree the procedure. None exists. Section 11(5) applies to a sole arbitrator.
Apply: if the parties fail to agree within thirty days from receipt of a request by one party, the appointment is made on request of a party by the court or its designate.
Identify the court: this is an international commercial arbitration as one party is a foreign body corporate (Section 2(1)(f)). Under Section 11(12)(a), the Supreme Court is meant.
State the court's scope: under Section 11(6A) it confines itself to examining the existence of an arbitration agreement, and it seeks a written disclosure from the prospective arbitrator under Section 11(8).
Add a drafting point: naming an institution and rules would have avoided the dispute.

Answer: The arbitration is ad hoc. After the 30 days lapse, either party may apply to the Supreme Court (or its designate) under Section 11(5) read with Section 11(12)(a) for appointment of the sole arbitrator.

Exam tips

Answer in comparison form: define, contrast on set heads, apply the Act, then conclude.
Quote Section 2(8), Section 2(6) and Section 11 only as far as you are sure; link them to the facts.
For clause-based questions, first classify the clause as ad hoc or institutional, then decide what happens on a failure.
Name ICC, LCIA, SIAC and ICADR with their role and base. Skip fee figures and statistics.
End with advice and a drafting point; case-based papers reward a clear conclusion.

Practice questions from Conceptual Framework of International Commercial Arbitration

Institutional vs Ad Hoc International Arbitration: frequently asked questions

What is the main difference between institutional and ad hoc arbitration?

In ad hoc arbitration the parties run the process themselves. In institutional arbitration an institution administers the case under its rules. This affects appointment, timetable, fees and support if a party does not cooperate.

Do ICC, LCIA, SIAC and ICADR all work the same way?

They share the same basic model of administering arbitration under their own rules. Their rules, fee scales and procedures differ, so check the current rules of the institution named in the clause.

Can parties choose institutional rules without the institution administering the case?

They can adopt rules by reference, and under Section 2(8) those rules form part of the agreement. Whether the institution administers the case depends on the rules and the clause. Draft the clause clearly to avoid doubt.

Who appoints the arbitrator if an ad hoc clause is silent?

For a sole arbitrator, if the parties do not agree within thirty days of a request, a party may apply under Section 11(5). In an international commercial arbitration this goes to the Supreme Court or its designate.