English Arbitration Act 2025 – Bill Becomes Law

The long-awaited Arbitration Act 2025 (the “2025 Act”) finally received Royal Assent on 24 February 2025, paving the way for significant refinement of the Arbitration Act 1996 (the “1996 Act”) and the conduct of arbitration in England & Wales.^[1]

Background

The amendments have been described as “evolution not revolution”, reflecting the widely held views that the Arbitration Act (which applies to all London seated arbitrations) remains largely fit for purpose despite nearly being 30 years old.

The Government’s hope is that the changes brought about by the 2025 Act will streamline the arbitral process and further enhance London’s attractiveness as the arbitral seat of choice as against competitors such as Singapore, Hong Kong and Paris.^[2]

Key changes

• Summary disposal – the 2025 Act introduces a new statutory power for tribunals to make awards on a summary basis, where a tribunal is of the view that a party has no real prospect of succeeding on a claim or issue or defending a given claim or issue. However, parties may choose to expressly remove this jurisdiction by making such provision in the arbitration agreement, or by agreement following a dispute.
• Court orders in support of arbitration –the 2025 Act clarifies the court’s powers to make orders in support of arbitral proceedings. This includes the power to: (i) make orders against third parties in support of arbitration by way of interim relief (for example, to preserve evidence or take witness evidence), unless otherwise agreed by the parties; and (ii) convert peremptory orders issued by emergency arbitrators into court orders.
• Immunity for arbitrators – the 2025 Act significantly strengthens arbitrator immunity in the context of resignation or removal. Under the 1996 Act, arbitrators risk losing their immunity and incurring liability if they resign from their position, or if a party applies to the court for their removal. Under the 2025 Act, however, arbitrators will incur liability for resignation only where it is shown that their resignation was unreasonable in the circumstances, or in the case of their removal, where they are shown to have acted in bad faith.
• Arbitrator’s duty of disclosure – the 2025 Act codifies the common law position (established in Halliburton v Chubb) that arbitrators have a continuing duty to disclose any circumstances which might reasonably give rise to doubts as to their impartiality in relation to proceedings, as soon as is reasonably practicable to do so. An arbitrator is required to disclose any such relevant circumstances of which they are aware, or of which they ought reasonably to be aware. This duty of disclosure extends to pre-appointment discussions.
• Governing law – the 2025 Act will give force to an agreement of the parties as to what law will govern the agreement to arbitrate itself. In the absence of such express provision, the 2025 Act introduces a default rule, whereby the arbitration agreement will be governed by the law of the selected arbitral seat. This approach applies irrespective of the governing law of the underlying contract and, therefore, displaces the current position under English case law (following the Supreme Court decision in Enka v Chubb).

• Jurisdictional challenges – the 2025 Act amends section 32 of the 1996 Act (concerning determination of jurisdiction as a preliminary point) so that parties can only make such an application where a tribunal has not made a ruling on jurisdiction.

  In addition, the 2025 Act simplifies the process for challenging arbitral awards under section 67 of the 1996 Act on grounds of jurisdiction.  Where a challenging party has participated in an arbitration in which the tribunal ruled on a jurisdictional objection, that party will be unable to raise any new grounds or evidence at court and any evidence already heard by the tribunal will generally not be reheard (unless the court makes a ruling to the contrary, in the interests of justice).  This is a significant departure from the current position, as established in Dallah v Government of Pakistan, that a challenge under section 67 must be by way of full rehearing (potentially including the submission of new evidence and arguments).  It should be noted that these are mandatory provisions and cannot be amended or waived by the parties.

Conclusions and next steps

These changes, brought about by the 2025 Act, will bring greater efficiency and finality to arbitration in the UK, ensuring that London remains a popular arbitral seat.  However, parties should carefully consider these reforms when negotiating contracts (and updating their own standard forms) to ensure that arbitration agreements are drafted appropriately.  With the 2025 Act having received Royal Assent, the Secretary of State will now determine an “effective date” for the 2025 Act.  However, the 1996 Act will continue to apply to any arbitration commenced before this effective date.