Difference Between Institutional and Ad-Hoc Arbitration

by John Steffen Marketing Consultant Investing in India is a lucrative proposition, especially with the government smoothing the path to making investments easier than ever before. But unanticipated hurdles cannot be entirely ruled out. In India, almost everything that has money involved in it will attract political and social attention that can be good or bad depending on which side of the opinion you are on. Getting in loggerheads with political or social entities could create insurmountable hassles and you will need the right strategic advice to overcome them. You need to have one of the top law firms in India for International commercial dispute resolution. When you are in a business with cross border presence, sooner or later you will need the help of arbitrators to make things easy for your business operations. When that happens there are ways to reach a dispute resolution. 

 
Institutional Arbitration
There are some institutions which will supervise the entire arbitration. Institutional arbitration has several other benefits as well. Besides acting as the overseer, it also appoints arbitrators, sets procedural rules and helps in interpreting them. Besides, it also recommends changes to the tribunal, so if the scope of appealing to the arbitration has been curtailed by the process, this acts as a second line of protection against possible errors. In case a party fails to appoint an arbitrator these institutions also help with that. Another direct advantage of arbitrating in such institutes is that procedural rules are laid down very clearly which makes it rather simple to interpret outcomes. It must be noted that there is a charge associated with Institutional arbitration but the benefits outweigh the cost quite easily.

Ad-Hoc arbitration
The other type arbitration is one which is not administered by any institution, hence the name ad-hoc. This process is very fast, works flexibly and is the first choice of many simply because it produces prompt results.  The only two prerequisite are that first, both parties involved be willing to come to a resolution and cooperate with the arbitrators and second is that the process must take place in country with recognized arbitration laws.   Unlike in the previous case, in case of ad-hoc arbitration, the procedural rules are not set because there is no institutional involvement in this case. UNCITRAL Arbitration Rules (not to be confused with UNCITRAL model) are commonly used in such cases. UNCITRAL is the United Nations Commission on International Trade Law. 


To know more about the differences in details and to understand which one works best for you, talk to an International Arbitration expert at one of the top law firms in India.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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