Institutional and Ad Hoc Alternative Dispute Resolution

The distinction concerns administration rather than substance. In an ad hoc reference the parties and the tribunal supply everything themselves: the rules, the timetable, the fees and the logistics. In an institutional reference an arbitral institution supplies all of it under published rules which the parties adopt by naming the institution in their contract. Indian practice has historically been overwhelmingly ad hoc, and the reform effort of the last decade, from the Srikrishna Committee onwards, has been directed at changing that.

1. The Two Models

The functions that an institution performs and that the parties must otherwise perform themselves

An institution does not decide the dispute. It appoints or confirms the tribunal, administers the reference under its rules, fixes and collects the fees, provides the secretariat and hearing facilities, monitors the timetable and, in some systems, scrutinises the draft award for defects of form before it is released. The tribunal remains the decision maker throughout. The institution's contribution is machinery, and the value of that machinery is felt most sharply when a party is uncooperative.

2. Points of Comparison

3. The Case for Institutional Arbitration

• A defaulting party cannot stall the reference. Where one side refuses to appoint or to pay, the institution's rules supply the answer; in an ad hoc reference the other party must go to court under Section 11, which adds months or years at the threshold.
• Fees are known in advance. An ad valorem schedule removes the awkwardness of the tribunal negotiating its own remuneration with the parties, which is a recurring source of dispute in ad hoc references conducted on a per-sitting basis.
• The timetable is monitored. Section 29A of the Arbitration and Conciliation Act, 1996 fixes twelve months from the completion of pleadings, but nothing within the section keeps the individual steps moving; an institutional case manager does.
• Quality control. Scrutiny of the draft award for internal inconsistency, omitted issues and arithmetical error reduces the risk of a successful challenge under Section 34.
• Neutrality in cross-border matters. A foreign party is more likely to accept an Indian seat if the reference is administered by a recognised institution under published rules.

The case for ad hoc arbitration is narrower but real. Where both parties are cooperative and the dispute is small, the institutional charge is an avoidable expense; where the parties have a settled relationship with a particular arbitrator, the machinery adds little; and the parties retain complete freedom to design a procedure that fits the dispute rather than accepting rules drafted for the general case.

4. The Indian Reform Effort

The High Level Committee chaired by Justice B.N. Srikrishna, which reported in 2017, identified the predominance of ad hoc arbitration as the central weakness of the Indian system, and attributed to it the cost, delay and unpredictability that had led parties to choose foreign seats. Its recommendations produced two lines of legislation.

1. The Amendment Act of 2019 introduced the concept of arbitral institutions designated by the Supreme Court and the High Courts for the purpose of appointment under Section 11, so that the appointment function could move from the courts to institutions, and provided for the Arbitration Council of India to grade institutions and accredit arbitrators.
2. The New Delhi International Arbitration Centre Act, 2019, under which the India International Arbitration Centre was established and declared an institution of national importance, taking over the undertaking of the former International Centre for Alternative Dispute Resolution.

Institutional capacity has grown alongside. The Mumbai Centre for International Arbitration, the Delhi International Arbitration Centre attached to the Delhi High Court, the Indian Council of Arbitration, and a number of High Court annexed centres administer domestic references; Indian parties also use the Singapore International Arbitration Centre and the London Court of International Arbitration for cross-border matters. On the mediation side, Chapter VIII of the Mediation Act, 2023 creates the framework for recognising mediation institutes and mediation service providers, and the Mediation Council of India was established by notification dated 27 August 2026.

5. Institutional Mediation

The same distinction applies to mediation, although the vocabulary is less settled. An ad hoc mediation is one in which the parties choose a mediator and agree the process between themselves. An institutional mediation is administered by a mediation service provider recognised under the Mediation Act, 2023, which maintains a panel, applies its own rules on confidentiality, fees and timelines, and provides the venue and the record. The court-annexed mediation centres attached to the High Courts and district courts perform the same function within the judicial system, and the legal services authorities do so for pre-institution mediation under Section 12A of the Commercial Courts Act, 2015.

6. Choosing between the Models

• Name an institution where the contract is of significant value or long duration, where the counterparty may not cooperate, where more than two parties or more than one contract are involved, or where one party is foreign.
• An ad hoc reference remains sensible for a small domestic dispute between parties who are cooperating, or where a sole arbitrator known to both is appointed after the dispute has arisen.
• Whatever the model, the clause should fix the seat, the number of arbitrators, the language and the governing law, and should avoid giving either party control over the appointment, which is invalid following Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760 and the Constitution Bench decision in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV), (2025) 4 SCC 641.

7. Related Topics and Provisions