Ad Hoc Arbitration

Ad hoc arbitration is the default form of arbitration under the Arbitration and Conciliation Act, 1996 — where no administering institution is designated and the parties manage the arbitration themselves.

How ad hoc differs from institutional arbitration

In institutional arbitration, an administering body (IIAM, DIAC, MCIA, LCIA India, and others) provides:

• A roster of qualified arbitrators
• Pre-set procedural rules
• A secretariat that manages scheduling, communications, and fee deposits
• A ready-made appointment mechanism if a party defaults or disputes arise
• Emergency arbitrator provisions in some cases

In ad hoc arbitration, the parties handle all of this themselves under the Act. If a party fails to participate in appointing an arbitrator, the other party must apply to the High Court under Section 11 — which adds time and cost.

Advantages of ad hoc

• Flexibility. The parties can design any procedure they want, including adopting specialist rules (such as the UNCITRAL Rules) without institutional administration.
• Cost. No institutional fee, which can be significant for high-value disputes.
• Privacy. No institution's records or registers capture the dispute.

Disadvantages of ad hoc

• No default appointment mechanism. If a party obstructs the appointment of an arbitrator, court intervention is required.
• No case management. The parties must handle their own logistics and timelines.
• Quality control. Institutional panels have quality filters; parties in ad hoc arbitration must vet arbitrators themselves.
• Default obstruction risk. A party who wants to delay can do so more easily in ad hoc proceedings by simply not cooperating.

For most domestic commercial disputes between parties of roughly equal sophistication, institutional arbitration is now generally preferred — the marginal cost of an institution is usually outweighed by the procedural predictability it provides.

For contracts with an overseas party, see cross-border commercial disputes connected with India.