Ad Hoc Arbitration is a form of dispute resolution conducted without the administration of a permanent arbitral institution (such as the ICC or LCIA). In this model, the parties create their own procedural rules or adopt ready-made standards (e.g., UNCITRAL Rules) and manage the logistics of tribunal appointment and proceedings themselves. Ad Hoc arbitration offers unique flexibility and confidentiality, making it attractive for specific commercial disputes. However, the absence of institutional oversight means that parties and their lawyers bear significantly greater responsibility for avoiding procedural errors.
Ad Hoc arbitration can be faster and less costly as parties avoid paying institutional administrative fees. However, a poorly managed process can become protracted and chaotic. Therefore, the involvement of an experienced lawyer who can act as a de facto administrator and ensure the smooth running of the process is critical. Specialists featured on Legal.ge offer qualified support in organizing and conducting Ad Hoc arbitration, covering the full cycle from drafting the arbitration agreement to enforcing the award.
What does the Ad Hoc Arbitration service cover?
- Drafting Ad Hoc Arbitration Clauses: Developing a clause in the contract that details the method of appointing arbitrators and designates an Appointing Authority to avoid deadlock situations.
- Defining Procedural Rules: Negotiation and agreement between parties on which rules (e.g., UNCITRAL) or individual procedures will guide the tribunal.
- Tribunal Administration: Managing communication with arbitrators, agreeing on fees, organizing logistics for hearings, and acting as a secretary.
- Arbitrator Selection and Appointment: Finding qualified arbitrators and, if necessary, applying to the court for the forced appointment of an arbitrator.
- Preparation of Procedural Documentation: Full legal representation — preparing the statement of claim, defense, and evidence.
- Enforcement of Award: Handling procedures for the recognition and enforcement of the Ad Hoc arbitral award in Georgian or foreign courts.
Common scenarios requiring this service
Ad Hoc arbitration is often used in disputes between two large corporations when they desire maximum confidentiality and do not want third-party (institutional) involvement. This format is also popular in maritime disputes (e.g., charter party agreements), where specialized Ad Hoc procedures are traditionally used. For small and medium-sized businesses, Ad Hoc arbitration can be a solution when the dispute amount is not large enough to justify expensive institutional fees, yet parties still wish to avoid public courts. Another scenario is a post-dispute agreement where parties agree on a specific arbitrator to resolve an existing conflict.
Georgian Legal Framework
The Law of Georgia on Arbitration fully supports Ad Hoc arbitration. The law contains "Default Rules" that apply if parties have omitted any issue in the arbitration agreement (e.g., the method of appointing arbitrators). According to the law, if parties cannot agree on an arbitrator in an Ad Hoc setting, the court is authorized to appoint one so that the process is not hindered. Furthermore, under the New York Convention, an Ad Hoc arbitral award has exactly the same legal force and enforceability as an institutional award, provided procedural norms are observed.
Step-by-step service process
The process begins with sending a Notice of Arbitration. Following this, the critical stage is tribunal formation. Since there is no institution, parties must sign an agreement with the arbitrators directly, specifying their fees and timelines. Then, a first hearing is held to establish the procedural timetable. Parties exchange documentation, followed by a hearing. The process concludes with the issuance of a reasoned award.
Why choose a specialist on Legal.ge?
Ad Hoc arbitration requires high-level legal expertise because there is no safety net provided by an institution. On Legal.ge, you will find lawyers with practical experience in setting up and managing the process from scratch. With their help, you can utilize the flexibility and speed of Ad Hoc arbitration while minimizing risks.
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