Arbitration is an excellent alternative to litigation. It is a time and cost-efficient method of resolving disputes where the parties oust the jurisdiction of the courts and instead take their dispute to one or more third persons chosen by them—in a word, the arbitrator(s). It provides the parties autonomy, and the proceedings are confidential in nature. It also provides for flexible procedures to be followed, unlike litigations, that can be agreed upon between the parties.  Arbitration can be broadly categorised into:
Ad hoc Arbitration
This kind of arbitration is generally independent of any arbitration institution. Ad hoc arbitrations are particularly more appropriate for disputes involving governments. It allows the parties more flexibility and provides them with more control over the arbitration. Generally, ad hoc arbitration clauses are longer and more detailed than institutional arbitration clauses, especially in terms of the procedure for the arbitration such as how the arbitrators are to be appointed, how many arbitrators should be there etc. United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules are the most common suspect for the conduct of this kind of arbitral proceedings.  If the parties do not agree on any rules or the procedure, usually default provisions of the law of the place of arbitration will be applicable. 
The difference between ad hoc and institutional arbitration has been described as the difference between a ‘tailor-made’ suit and one that is bought ‘off the peg’ if the parties cooperate.  An added advantage of ad hoc arbitration is that if an arbitral institute is not involved then the cost of the arbitrations can be reduced. On the other hand, one of the disadvantages is that only when an arbitral tribunal is in existence or a set of rules has been established, it will be able to proceed if one of the parties fails or refuses to play its part in the proceedings. 
In this kind of arbitration, the parties must select and refer their dispute to an arbitration institution and its rules in their arbitration agreement. When a dispute arises, the named arbitration institution administers and manages the smooth conduct of the arbitration from the appointment of arbitrators to (sometimes) scrutinise the arbitral awards under its rules of arbitration. This form of arbitration is increasingly being preferred by the parties over ad hoc arbitrations.  Some Asian nations ambitious to become a robust hub for international arbitration like India have also made provisions in their domestic law giving preference to institutional arbitrations. 
An important advantage of institutional arbitration is that it avoids the discomfort of the parties and the arbitrators discussing, agreeing and fixing their remuneration. This means that the arbitrators can maintain a certain level of material detachment from the parties.  The arbitration may proceed, and an award may be made, even if a party fails or refuses to take part in the arbitration. Moreover, a leading international arbitration commentator argues that the specialised staff of an arbitral institution provide better service than ad hoc decisions by national courts with little, if any, experience or institutional resources for such matters. 
While on the other hand, the disadvantage of institutional arbitration is the unrealistically short timelines due to which the respondent(s) is almost always pressed against time. The requirement of the advance payment up-front by the arbitral institution can also be a cause of delay especially when that is the intention of the respondent(s), and it may refuse to pay its share.
Another difficulty generally faced by the respondent(s) is that the date of submission of the answer to the request for arbitration (the “Answer) or response to the notice of arbitration (the “Response”) is fixed by the rules of the arbitration institution but the date of payment for the advance fee may be extended from time to time. Sometimes, the date for the payment of the advance fee may fall after the last date for the submission of the Answer or the Response. However, in this situation, the respondent(s) might not even be inclined to file its Answer or Response till the time the claimant pays the required fee because if the claimant fails to pay it, the arbitration institution will not proceed with the arbitration. If this is the case, by the time the claimant would pay the fee, the last date for submission of the Answer or Response might have already lapsed and the respondent(s) might no longer be allowed to file its Answer or Response.
A counter to this could be that, in an ideal situation, the respondent(s) should simply pay its share of the advance fee, or the respondent(s) should file the Answer or Response before the last date irrespective of the fact that the claimant pays the required fee before that date or not. However, if the respondent(s) file its Answer or Response pending the payment of the required fee by the claimant but later the claimant fails to pay the required fee and consequently, the arbitration is discontinued then it would be a wastage of the costs incurred by the respondent(s) in relation to its Answer or Response. Therefore, perhaps the rules and the approach of the arbitration institutions should be more flexible to take into account the practical difficulties that may arise during the arbitration.
In sum, institutional arbitrations are becoming increasing popular in most parts of the world and are expected to continue doing so. For instance, India alone has thirty-six domestic and regional arbitration institutions. 
Author: Vikrant Nehra
 Arbitration: In a Nutshell, available at: https://www.legal500.com/developments/thought-leadership/arbitration-in-a-nutshell/ (last visited on October 11, 2022).
 Jeffrey Maurice Waincymer, Procedure and Evidence in International Arbitration, (Kluwer Law International 2012) p. 210 (“[some essentially ad hoc arbitrations still provide for resort to be had to an institution for certain key matters such as appointment of a tribunal.”)
 2021 International Arbitration Survey, p. 9 (the UNCITRAL Arbitration Rules were amongst the most frequently used ad hoc regimes by 76% of the respondents).
 Julian D. M. Lew, Loukas A. Mistelis, et al., Comparative International Commercial Arbitration, (Kluwer Law International 2003) p. 32.
 Nigel Blackaby, Constantine Part asides, et al., Redfern and Hunter on International Arbitration (6th ed.), (Kluwer Law International; Oxford University Press 2015) p. 43.
 Id. at 44.
 79% of the arbitrations are administered by the arbitration institutions (2015 International Arbitration Survey, p. 17).
 The (Indian) Arbitration and Conciliation Act, 1996 was amended in 2019 to provide for the appointment of arbitrators exclusively by the arbitral institutions. The erstwhile provisions provided this power also to the courts (section 11). Section 43-I was inserted for grading the arbitral institutions.
 Julian D. M. Lew, Loukas A. Mistelis, et al., Comparative International Commercial Arbitration, (Kluwer Law International 2003) p. 37.
 Gary B. Born, International Commercial Arbitration (2nd ed.), (Kluwer Law International 2014) p. 170.
 What’s in a Name? The Story of The New Delhi International Arbitration Centre (Amendment) Bill, 2022, available at: https://www.lexology.com/library/detail.aspx?g=0cf39901-5db8-4e7e-9685-67015ea8b78f (last visited on October 11, 2022).