29.07.2025
The Arbitration Act 2025 (“2025 Act”) received Royal Assent on 24 February 2025, will come into force on 1 August 2025 and will apply to arbitrations and arbitration-related court proceedings that are commenced on or after that date. The Act makes some limited but significant changes to the Arbitration Act 1996 (“1996 Act”), reinforcing London’s position as a leading international arbitration centre while maintaining party autonomy, providing greater legal clarity, and preserving the fundamental principles established by the 1996 Act. The reforms aim to attract international businesses to resolve their disputes in London and boost the already significant arbitration sector. Additionally, the new provisions focus on making arbitration more efficient, reducing costs, and simplifying existing procedures.
Governing Law
The 2025 Act introduces a new Section 6A to clarify the governing law of arbitration agreements. It remedies the uncertainty created by the Supreme Court decision in Enka v Chubb, which raised the possibility that an arbitration agreement with an English seat could be governed by a law other than English law. The default rule is now that the law of the arbitration's seat applies, unless the parties expressly agree otherwise. This change provides reassurance to parties choosing London as the seat of arbitration.
Arbitrators’ Duty of Disclosure
Not fundamentally different from the requirements of many arbitral institutions, this new section puts the decision in Halliburton Company v Chubb Bermuda Insurance Ltd. on a statutory footing. Arbitrators are now under a statutory duty to disclose any circumstances that might raise doubts about their impartiality. This is a continuing obligation that applies both before and during the appointment and is mandatory.
Summary Disposal
The new Section 39A gives tribunals powers similar to those of English courts to dismiss claims that have “no real prospect of succeeding” through summary awards. Though already available under some institutional rules, this reform provides statutory reassurance to tribunals that they may exercise this power where appropriate. It introduces an efficient mechanism to dismiss claims lacking substantive merit, reducing unnecessary time and cost in arbitration proceedings.
Tribunal Jurisdiction
Previously, parties could challenge a tribunal’s jurisdiction either during the proceedings or under Section 67. The 2025 Act introduces key changes to reduce duplicative proceedings by giving more weight to the tribunal’s initial jurisdiction ruling while maintaining the courts’ ultimate authority to make a final determination. Courts will now limit the rehearing of evidence presented to the tribunal, and any new evidence will be restricted. Further, Section 32 is now only available as an alternative to the tribunal’s own jurisdiction ruling. Arbitral tribunals can now award costs even if they are ultimately found to lack substantive jurisdiction.
Emergency Arbitrators
The express legal recognition of emergency arbitrators—previously addressed only in institutional rules—is now explicitly provided for in law. The reforms empower emergency arbitrators to make enforceable peremptory orders and to grant permission for certain court applications.
Arbitrator Immunity
The new legislation enhances arbitrators’ ability to act independently by expanding their immunity. Arbitrators cannot be held liable for costs unless they act in bad faith or their resignation is found to be unreasonable.
Court's powers in support of arbitral proceedings and third parties
Section 44 of the 1996 Act has been amended so that court powers in support of arbitration (e.g. for the preservation of evince) can be exercisable in relation to third parties.
Correction of Awards
Amending Section 70, the 2025 Act clarifies that the 28-day appeal period for the purposes of Sections 67, 68, or 69 starts from the date of any material correction or additional award, unless the parties have agreed otherwise.
Unchanged Areas
Although considered during the Law Commission's consultation, the 2025 Act does not introduce changes to Section 69 of the 1996 Act regarding appeals on a point of law. It also omits statutory provisions on confidentiality, continuing instead to rely on the obligations established by institutional rules and party agreement.
Practical Considerations
While not revolutionary, the 2025 Act offers greater clarity and efficiency in the arbitration process. These amendments are unlikely to cause immediate or dramatic shifts in practice, but they do streamline procedures and may lead to changes over time. Parties will need to be more explicit about their choice of governing law, especially if it differs from the seat. Tactically, the introduction of summary disposal is likely to have a notable impact on how arbitrations are conducted in England and Wales.
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