In international commercial disputes, ad hoc arbitration offers a flexible alternative to institutional proceedings. It is a process conducted without the administration of a permanent arbitral institution,[1] giving parties greater control over how their dispute will be managed.
This model is often chosen by users who prioritise autonomy, procedural efficiency, and the ability to tailor the arbitration to the specific features of their dispute.
Understanding the Ad Hoc Arbitration Model
To begin with, there are two primary models of arbitration: institutional arbitration and ad hoc arbitration. Unlike institutional arbitration, administered by bodies such as the ICC or the LCIA, ad hoc arbitration operates without the oversight of a permanent arbitral institution. The UNCITRAL Model Law on International Commercial Arbitration (the “UNCITRAL Model Law”) expressly validates this approach by defining arbitration to include proceedings “whether or not administered by a permanent arbitral institution.”[2]
In essence, ad hoc arbitration may take three forms:
- Purely ad hoc: no procedural rules are agreed in advance; the tribunal designs the procedure entirely based on the facts and needs of the case.[3]
- Tailor-made rules: the parties draft and insert detailed, bespoke arbitration rules directly into their arbitration clause.[4]
- Rule-based ad hoc: the parties rely on a recognized set of rules designed for non-administered proceedings, most famously the UNCITRAL Arbitration Rules, but also the CPR Rules for Non-Administered Arbitration of International Disputes.[5]
Advantages of Ad Hoc Arbitration
Due to its flexible structure, ad hoc arbitration offers several advantages that are particularly attractive to parties seeking autonomy, efficiency, and greater control over the procedure.
Maximum Procedural Flexibility and Party Autonomy
First, ad hoc arbitration offers maximum procedural autonomy, allowing the parties to design a process precisely suited to their dispute.[6] Instead of following a fixed institutional regime, they retain complete control over fundamental elements such as the procedural rules, the arbitral seat, the composition of the tribunal, and the overall timetable.
This ability to shape the procedure enables the parties to adapt the process to the complexity of the case, the characteristics of the industry, and their strategic priorities. It is particularly valuable in specialized sectors, such as finance, energy, or multi-party consumer disputes, where institutional rules may not fully accommodate technical or bespoke requirements.[7]
Ad hoc arbitration also permits the parties and the tribunal to adjust the procedural schedule as needed. Steps may be accelerated or deadlines extended where appropriate, for example, when a state entity requires additional time to appoint counsel.[8]
Potential for Cost Savings
Second, ad hoc arbitration can be more cost-effective.[9] Parties avoid the often-substantial administrative fees charged by arbitral institutions, an essential consideration for smaller claims or cost-sensitive matters.[10]
Enhanced Neutrality and Confidentiality
Third, parties sometimes prefer the confidentiality offered by ad hoc arbitration, as fewer individuals are involved in managing the proceedings.[11] It is also often argued that ad hoc arbitration provides greater neutrality, since it is not affiliated with any specific arbitral institution that might be perceived, rightly or wrongly, as favoring specific industries or approaches.[12]
Procedural Efficiency and Time Savings
Finally, ad hoc proceedings can move faster[13] because they bypass institutional checks, approvals, and administrative steps.
Challenges of Ad Hoc Arbitration
However, these advantages come with notable challenges – chiefly the need for genuine party cooperation, the absence of institutional support, and the increased procedural burdens placed on the tribunal. If not properly managed, each of these factors can lead to significant delays and additional costs.
Dependence on Party Cooperation
First, the effectiveness of ad hoc arbitration relies heavily on the cooperation of the parties and their counsel, supported by an adequate legal framework at the seat of arbitration.[14]
Where a party acts in bad faith, it may attempt to undermine the process. For instance, by refusing to appoint an arbitrator, failing to participate, or raising obstructive objections to the conduct of the proceedings.[15] In Aceris Law’s experience, respondents frequently refuse to appoint an arbitrator once a dispute has arisen, frequently necessitating court intervention simply to constitute the arbitral tribunal, which wastes time and costs.
Lack of Predictability and Procedural Burden
Second, ad hoc arbitration proceedings may also entail a degree of unpredictability.[16] In the absence of institutional support, the arbitral tribunal must assume a range of administrative tasks that would otherwise be handled by administrative professional staff.[17]
These responsibilities can include managing arbitration funds, sometimes involving complex tax, regulatory, or sanctions-related issues, and overseeing day-to-day administrative operations.[18] In some cases, the time and resources required for this work may generate costs comparable to, or even exceeding, those of institutional administration.[19]
Requirement for Well-Drafted Agreements
Third, ad hoc arbitration proceedings can be significantly undermined by a poorly drafted arbitration agreement, which may be difficult to interpret or implement once a dispute arises.[20] Furthermore, negotiating a complete set of procedural rules after the onset of the dispute is often burdensome and frequently unrealistic when the parties are already in an adversarial posture.[21]
The Hybrid Solution: Ad Hoc Arbitration Under UNCITRAL Rules
Given these challenges, many parties adopt a hybrid model to secure the advantages of ad hoc arbitration while mitigating its risks.
The most reliable, and often the best-advised, approach is to adopt the UNCITRAL Arbitration Rules (the “UNCITRAL Rules”).[22] These Rules expressly allow parties to designate an appointing authority, with a fallback mechanism empowering the Secretary-General of the Permanent Court of Arbitration (PCA) to act as appointing authority if the parties do not agree.[23]
This tried and tested model preserves procedural flexibility while ensuring expert oversight in several critical areas, including:
- Appointment of Arbitrators: The appointing authority may intervene when the parties fail to constitute the tribunal.[24] This safeguard is essential, since a dispute cannot be adjudicated in the absence of a properly constituted arbitral tribunal.
- Challenges to Arbitrators: Issues concerning impartiality or independence can be resolved without recourse to national courts.[25]
- Review of Fees: The appointing authority may review the tribunal’s proposed fees and expenses, adding predictability and protecting parties from unreasonable cost demand.
Consequently, the hybrid UNCITRAL model has become the preferred structure for users seeking a balance between autonomy and reliability.
Conclusion
While many practitioners prefer institutional arbitration for its structure and administrative support, ad hoc arbitration remains a powerful option for parties who value flexibility, control, and tailor-made procedures. With a well-drafted clause and the support of reliable rules, such as the UNCITRAL Arbitration Rules, ad hoc arbitration can be both efficient and highly effective.
[1] UNCITRAL Model Law, Art. 2(a).
[2] G. Born, International Arbitration and Forum Selection Agreements, Drafting and Enforcing (7th edn., 2025), p. 47.
[3] C. Oetiker, Arbitration in Switzerland (2nd edn., 2018), p. 895.
[4] C. Oetiker, Arbitration in Switzerland (2nd edn., 2018), p. 895.
[5] C. Oetiker, Arbitration in Switzerland (2nd edn., 2018), p. 895.
[6] C. Oetiker, Arbitration in Switzerland (2nd edn., 2018), p. 895.
[7] J. Merizalde, Chapter 58: Institutional Arbitration Versus Ad Hoc Arbitration in C. Lotfi et al. (eds.), International Arbitration in Practice, p. 653.
[8] J. Merizalde, Chapter 58: Institutional Arbitration Versus Ad Hoc Arbitration in C. Lotfi et al. (eds.), International Arbitration in Practice, p. 653.
[9] C. Oetiker, Arbitration in Switzerland (2nd edn., 2018), p. 896.
[10] C. Oetiker, Arbitration in Switzerland (2nd edn., 2018), p. 896.
[11] C. Oetiker, Arbitration in Switzerland (2nd edn., 2018), p. 896.
[12] J. Merizalde, Chapter 58: Institutional Arbitration Versus Ad Hoc Arbitration in C. Lotfi et al. (eds.), International Arbitration in Practice, p. 653.
[13] C. Oetiker, Arbitration in Switzerland (2nd edn., 2018), p. 895.
[14] C. Oetiker, Arbitration in Switzerland (2nd edn., 2018), p. 896.
[15] J. Merizalde, Chapter 58: Institutional Arbitration Versus Ad Hoc Arbitration in C. Lotfi et al. (eds.), International Arbitration in Practice, p. 654.
[16] G. Born, International Arbitration and Forum Selection Agreements, Drafting and Enforcing (7th edn., 2025), p. 79.
[17] C. Oetiker, Arbitration in Switzerland (2nd edn., 2018), p. 896.
[18] J. Merizalde, Chapter 58: Institutional Arbitration Versus Ad Hoc Arbitration in C. Lotfi et al. (eds.), International Arbitration in Practice, p. 655.
[19] G. Born, International Arbitration and Forum Selection Agreements, Drafting and Enforcing (7th edn., 2025), p. 78.
[20] G. Born, International Arbitration and Forum Selection Agreements, Drafting and Enforcing (7th edn., 2025), p. 78; C. Oetiker, Arbitration in Switzerland (2nd edn., 2018), p. 896.
[21] J. Merizalde, Chapter 58: Institutional Arbitration Versus Ad Hoc Arbitration in C. Lotfi et al. (eds.), International Arbitration in Practice, p. 654.
[22] G. Born, International Arbitration and Forum Selection Agreements, Drafting and Enforcing (7th edn., 2025), p. 79.
[23] 2021 UNCITRAL Rules, Art. 6.
[24] 2021 UNCITRAL Rules, Art. 8 and 9.
[25] 2021 UNCITRAL Rules, Art. 13(4).
