Arbitration is a form of Alternate Dispute Resolution (ADR) in which the disputes are resolved outside the court of law. According to the Halsbury’s Laws of England “the process by which a dispute or difference between two or more parties as to their legal right and liabilities is referred to a determined judicially and with binding effect by the application of law by one or more person instead by a court of law.” Arbitration is an alternative to litigation. It co-exits with the judicial machinery rather than replacing it. The object of arbitration is to provide the disputes with impartial and fair resolution and avoid unnecessary delay. In the present day, it is the most popular form of Alternative Dispute Resolution (ADR).

There exist two forms of arbitration, Ad hoc and institutional arbitration. Parties have the liberty to choose the type of arbitration they want to follow according to the facts and circumstances of the case. Both the forms have its own merits and demerits. Ad hoc Arbitration is flexible. This flexibility factor enables the parties to decide the procedure for dispute resolution. This process requires more effort, expertise of the parties and co-operation. When there is a lack of co-operation it may frustrate the parties from resolving their dispute through Ad hoc Arbitration. If there are certain rules which can be implemented such problems can avoided. this method is preferred in cases involving state parties. It is a less expensive method. In institutional arbitration, issues arise between the parties in their choice of institution. The merit of this type of arbitration is it saves the parties from drafting an arbitration clause and determining the procedure for arbitration. Another advantage is that in this type of arbitration, the parties have the choice of choosing their arbitrators from a panel of experts. While in ad
hoc method, the arbitrators are chosen based on trust and faith, in institutional arbitration, they can be chosen based on their qualification and expertise. The parties, however, can only select the arbitrators and not appoint them. Another merit in the institutional method is that court intervention can be avoided, but in case of Ad hoc method, the parties must approach court to take the proceeding forward. It is usually said that the masters of arbitration in the institutional method are the parties to the arbitration.

Ad hoc arbitration can only be effective only when the disputes involve small claims and the parties are less affluent. There is always an endless debate as to which method is more suitable and advisable. In conclusion, it can be said that the Institutional method of arbitration

is more superior to the Ad hoc method of arbitration. Or it can also be vice-versa. This superiority again depends on the facts and circumstances of the case.