Types of Arbitration
There are two main types of arbitration – Ad hoc and Institutional Arbitrations.
Institutional Arbitration
An institutional arbitration is administered by a specialised arbitral institution, which has its own set of rules providing a procedural framework for the arbitration, by establishing the parameters of the procedure, from submission of the notice of arbitration to the final award.
Basically, proceedings are conducted under the arbitration rules selected by the parties which have been drafted by the chosen institution, for example, the TIPC Arbitration Rules, LCIA Rules, UNCITRAL Rules, HKIAC Rules,…., which will establish the parameters of the arbitration procedure from start – submission of Notice of Arbitration to conclusion – Issuance of the Award.
Ad Hoc Arbitration
An ad hoc arbitration is not administered by any specialised institution but are arranged solely between the parties and the arbitrators. Thus, there is no administrative assistance as is the case in an institutional arbitration. On the other hand, the parties do not incur the additional administrative expenses associated with an institutional arbitration.
While an ad hoc arbitration is acknowledged to be less expensive, potentially more flexible and faster in execution compared to an institutional arbitration, it is also known to be dependent on the level of cooperation of the parties and the case management by the arbitral tribunal. To avoid any such risk, the parties may choose to adopt an internationally accepted set of rules, e.g. the UNCITRAL Arbitration Rules, for the arbitration. . Alternatively, the proceedings may be conducted in line with a set of bespoke rules, agreed by the parties specifically for that particular case.