Originally from Business Disputes In China - 3rd Edition

With arbitration increasingly becoming the mechanism of choice for resolving many international commercial disputes, the number of arbitral institutions that facilitate the conduct of arbitration proceedings are also on the rise. Faced with an array of possibilities, how are users to select the appropriate institution? In the first instance, is it necessary for them to select an institution through which to conduct their proceedings?

In this chapter, the benefits, as well as the potential drawbacks, of institutional involvement in the arbitration process are discussed. We then turn to consider some of the key factors that parties should note in choosing their arbitral institution, bearing in mind the needs and circumstances of each case.

Institutional versus Ad Hoc Arbitration

At the outset, it may be helpful to distinguish between institutional and ad hoc arbitration. Typically, an institutional arbitration takes place with the assistance of an arbitral institution and more often than not, under the arbitration rules of that institution. An example of that would be an arbitration administered by the International Chamber of Commerce (ICC) Secretariat and conducted under its Rules of Arbitration.

In contrast, ad hoc arbitrations typically take place with minimal or no assistance from an arbitral institution. Thus, the arbitration will be entirely administered by the arbitrators and parties (and possibly, with the assistance of a secretary). Parties may determine their own rules to govern the conduct of the proceedings (including as to how the arbitral tribunal is appointed, the scope of the tribunal’s powers and the respective parties’ rights and obligations etc) or they may adopt, as is frequently the case, the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL).