A more thorough explanation:

Ad hoc arbitration is a type of arbitration that involves resolving only one issue. Arbitration is a method of resolving disputes where one or more neutral third parties make a binding decision that the disputing parties agree to abide by. Ad hoc arbitration is different from other types of arbitration, such as grievance arbitration or interest arbitration, which involve resolving multiple issues or negotiating a new contract.

• Two companies are in a dispute over a breach of contract. They agree to use ad hoc arbitration to resolve the issue of damages owed.
• A landlord and tenant are in a dispute over the return of a security deposit. They agree to use ad hoc arbitration to resolve the issue.

In both examples, the parties are using ad hoc arbitration to resolve a specific issue rather than a broader dispute or negotiation. This allows them to focus on the specific issue at hand and come to a binding decision without the need for a lengthy legal process.