The Arbitration Act 2025: Key Reforms Explained

On 1 August 2025, the long-awaited Arbitration Act 2025 will come into full force, bringing with it a set of modernising reforms to the UK’s arbitration. The new Act introduces amendments to the Arbitration Act 1996, addressing specific issues that have emerged over the past three decades. The changes, while targeted, are significant and aim to streamline procedures, clarify ambiguities, and strengthen the UK’s position as a leading global arbitration hub.

One of the most notable innovations is the introduction of a new statutory rule on the governing law of the arbitration agreement. Under the 1996 Act, the governing law was not explicitly defined, leading to uncertainty and a reliance on judicial interpretation. The Supreme Court’s decision in Enka v Chubb (2020) added complexity, suggesting that a general choice of law clause in a contract could extend to the arbitration agreement, potentially displacing the law of the seat and with it, key procedural protections.

The 2025 Act addresses this directly through Section 6A, which provides that the law of the seat will govern the arbitration agreement unless the parties expressly agree otherwise. This is a welcome clarification that aligns with international best practice and ensures that parties can confidently predict which legal framework applies.

Summary Disposal

Another significant development is the explicit recognition of tribunals’ power to summarily dismiss claims or defences that have no real prospect of success. Previously, the 1996 Act made no mention of summary disposal, which led to uncertainty around whether and how such powers could be exercised.

The 2025 Act introduces Section 39A, giving arbitrators a clear statutory mandate, provided the parties do not agree to exclude it. This mirrors the courts’ own summary judgment mechanisms and is a practical tool to enhance efficiency by allowing weak or speculative claims to be dealt with swiftly. The parties may now be more willing to make an application for summary dismissal of a claim or defence, and the tribunal may be more willing to dispose of claims or defences at an early stage in the arbitration proceedings.

This new provision could result in cost and time savings for the parties, but on the other hand, the parties will need to assess carefully the merits of their claims or defences as there is a risk that they will have to pay costs if these claims or defences are disposed of summarily. However, the parties could also decide to opt-out of this mechanism of summary disposal, when drafting contracts.

Streamlining Jurisdictional Challenges

The 1996 Act allowed parties to challenge a tribunal’s jurisdiction in court under Section 67, often resulting in a full rehearing of jurisdictional issues, even where those issues had already been addressed by the tribunal. This process could be time-consuming and duplicative.

Under the 2025 Act, this has been significantly curtailed. The new rules limit such challenges to a review of the tribunal’s decision, rather than a complete re-litigation. Fresh evidence will be permitted only in exceptional cases, and only where justice requires it. This change aims to reduce delay and expense while respecting the tribunal’s competence to rule on its own jurisdiction.

Emergency Arbitrators and Court Support

While emergency arbitrators have become a common feature under institutional rules (such as those of the LCIA and ICC), their powers were not previously recognised under the 1996 Act. The 2025 Act closes that gap, giving statutory recognition to emergency arbitrators and enabling the courts to enforce their interim and peremptory orders.

Further, Section 44 has been updated to extend the court’s powers to grant interim measures not only against parties to the arbitration but also against third parties. This is especially relevant in complex commercial disputes where third parties, such as banks holding assets, may be indirectly involved.

Arbitrators’ Duties and Protections – Codification and Clarification

Two important provisions in the new Act relate to arbitrators themselves. First, the duty of disclosure, long recognised in case law (notably Halliburton v Chubb), is now codified in Section 23A. Arbitrators must disclose any circumstances likely to give rise to justifiable doubts as to their impartiality, including matters they ought reasonably to know. This ensures transparency and helps protect the integrity of the arbitration process.

Second, the Act clarifies arbitrators’ immunity from liability, particularly when they resign or are removed. Arbitrators are now protected from claims for costs or damages unless they act in bad faith or resign unreasonably bringing greater confidence to those accepting arbitral appointments.

Conclusion:

The Arbitration Act 2025 does not overhaul the UK’s arbitration regime, but rather enhances its functionality, predictability, and global competitiveness. By codifying key principles, introducing practical procedural tools, and aligning more closely with international expectations, the Act affirms the UK’s commitment to maintaining a modern, efficient, and user-friendly arbitration framework.

For parties, arbitrators, and practitioners, now is the time to revisit arbitration clauses, procedural strategies, and institutional rules to ensure alignment with the new statutory regime.

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