The Different Types of Arbitration

Most people are confused about arbitration when they hear it for the first time. However, in simple words, arbitration is a process in which a dispute is submitted by the different parties and resolved as well. If you have sifted through the web, you must have heard about the different types of arbitration such as domestic arbitration or international arbitration. People also look for binding arbitration definition when they have to find a solution to their disputes. So, what do these arbitrations mean? If you want to know about each one of them, you’ve come to the right spot. Here, we will discuss the different types of arbitrations:


1. Institutional Arbitration

As the name implies, in this kind of arbitration the specific institution is given the responsibility of taking care of the arbitration process and managing the case altogether. Bear in mind, every institution is bound by a certain set of rules that have to be followed and implemented for any case. The framework is provided to everyone when an arbitration process is initiated. The obvious benefit of this type of arbitration is the assistance that is provided by the institution itself.  For example, if a certain institution has been assigned the responsibility of a certain case, they will make sure that everything related to the arbitration case is taken care of from beginning till the end. This means, from filing the case to completing every part of the paperwork, the institution will handle all the affairs.

2. Domestic and International Arbitration

Although domestic and international arbitration doesn’t carry much significance, still it is valued by the arbitrators because it is also a part of legal disputes. A few years back, there was a strong demarcation between the domestic and international arbitration clauses. However, later they both were put under the same umbrella. Therefore, now we have a single regime that governs both cases under one roof. Today, domestic and international arbitrations are only used to describe the disputes of the different parties and will acknowledge the solutions. According to the new ordinance, only some parts of the old ordinance are acceptable under this law. Not many people will settle for this type of arbitration because it is very rare. In fact, it is hard for most people to find an arbitrator who specializes in this kind of arbitration. Therefore, it is good to consider other options for settling a dispute.

3. Ad Hoc Arbitration

On the flip side of the story, we have what is known as ad hoc arbitration. This type of arbitration is not run by any institution. This means the parties will determine the aspects of the dispute and also come across the right way to solve them. During an ad hoc arbitration, the parties also get to choose the arbitrator and see, which rules are applicable in their case.  Bear in mind, without any administering institution, the parties get to make important choices themselves. So, when no procedural rules are agreed upon, the arbitrator will settle for the right type of arbitration for a certain case, what they deem fit. If you don’t know, this type of arbitration can also be converted into institutional arbitration.  Especially if the parties believe they require the intrusion of professionals, they might choose to convert the case into a different form altogether.

It is important for you to also note that ad hoc arbitration is not common in many jurisdictions. For example, if you consider the rules in Mainland China, you will be astonished to know that this type of arbitration must be designated via a commission. Recently, many governments across the globe have acknowledged this type of arbitration because it can be beneficial for the business. Today, it is very common for all kinds of businesses to engage in legal disputes, which is why arbitration of this kind becomes the need of the hour. Today, as the number of disputes is on the rise, arbitration is a healthy method to get rid of archaic situations and come across healthy solutions. No wonder, with the advent of arbitration, it is easy for businesses to solve their issues with dignity instead of getting in trouble with the legal proceedings.

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