If arbitration is chosen, the parties should decide to submit to ad hoc arbitration or choose an appropriate arbitration institute. If the potential disputes under a contract are likely to be ‘simple’ or capable of being resolved relatively easily, it is perfectly fine to provide for ad hoc arbitration. In that case, the arbitration law of the place of arbitration will determine how the arbiter or arbitral tribunal will be appointed, unless the parties have provided for their own appointment mechanism.
Which institute? Normally, the parties will agree on an arbitration institute to administer their arbitration. Which arbitration institute should be chosen? Arguments regarding specific expertise or the location of the institute’s principal office, as well as a link with the applicable law, might influence the choice. A contract drafter will encounter competition among the major arbitration institutes: ICC, AAA, LCIA, the Stockholm or the Swiss chambers of commerce, the NAI, ‘Singapore’ and CIETAC – each have their particular benefits. It may be helpful if you establish a contracting policy as regards the arbitration institute you appoint when the agreement ‘moves out of your jurisdiction’. In the U.S., one would often choose either the ICC or ICDR (International Centre for Dispute Resolution), the international division of the AAA (pronounced: ‘triple A’) or JAMS.
Which arbitration clause? After the choice of an arbitration institute, it is recommended to include the model arbitration clause of the elected institute in the contract. If you change arbitration institute during contract negotiations, the arbitration clause should be amended according to the agreed institute’s model clause.