Arbitration Act 2025: What can international parties learn?

The UK Arbitration Act 2025 (“The Arbitration Act”), effective from 1 August 2025, represents an evolution in arbitration law, modernising procedures and reinforcing party autonomy while promoting efficiency, clarity, and certainty. For international parties operating in, for example, India and Dubai, the reforms are particularly relevant both for enhancing domestic arbitration frameworks and when considering London as the seat of arbitration. The Arbitration Act introduces clear rules on governing law, tribunal powers, interim relief, and arbitrator duties, providing parties with confidence that disputes seated in London will be handled efficiently, predictably, and fairly. By understanding these changes, parties can make informed choices about arbitration clauses, manage risks effectively, and protect their interests in cross-border disputes.

One of the key reforms in the Arbitration Act is the clarification regarding the governing law of arbitration agreements. In the absence of an express choice by the parties, the law governing the arbitration agreement is now clearly tied to the seat of arbitration, replacing the previously complex case law. For India and Dubai, explicitly codifying a seat-centric default rule would provide much-needed certainty, reducing costly disputes over which law applies to the arbitration clause itself, particularly where the main contract law differs from the law of the seat. While India’s landmark BALCO judgment (Bharat Aluminium Co. Ltd. v. Kaiser Aluminium Technical Service, Inc, 2012) leans toward a seat-centric approach, a statutory provision along the lines of the UK’s Section 6A would formalise this clarity.

The Arbitration Act also introduces the tribunal’s power to summarily dispose of claims or issues that have no real prospect of success. This mechanism for early dismissal allows tribunals to quickly reject unmeritorious claims without a full hearing, significantly reducing delays and legal costs. By contrast, India’s Arbitration and Conciliation Act, 1996, and onshore Dubai’s UAE Federal Law No. 6 of 2018 lack an express statutory power for summary disposal. While some institutional rules (e.g., ADIAC) provide similar mechanisms, tribunals often hesitate to use them under national law, fearing challenges for denial of due process. Incorporating a clear statutory basis for summary disposal, as the UK has done, would significantly strengthen the arbitration frameworks in both India and Dubai by providing tribunals with the necessary legal certainty to manage proceedings more robustly.

A notable reform in the Arbitration Act is streamlining jurisdictional challenges (under Section 67), a key mechanism for promoting arbitral finality. The Arbitration Act limits the court’s ability to rehear evidence or permit the introduction of new grounds that could have reasonably been presented to the tribunal. This statutory restriction profoundly respects the autonomy and fact-finding role of the arbitral process. For jurisdictions like India and Dubai, where excessive post-award judicial scrutiny remains a concern, adopting similar restrictions would be highly beneficial. Codifying rules that compel parties to present their strongest case at the arbitration stage, rather than holding back for a later court challenge, would drastically reduce post-award judicial interference, thus expediting the enforcement of awards and significantly enhancing predictability within their respective arbitration frameworks.

The Arbitration Act also provides statutory recognition of emergency arbitrators, formally confirming their authority to issue binding interim orders enforceable by courts. While India’s draft bill touches on emergency arbitrators, explicit statutory enforceability is crucial to ensure that urgent, pre-tribunal relief is meaningful and immediately effective. For Dubai, extending such statutory backing outside the free zones would strengthen interim relief mechanisms, aligning domestic law with international best practices.

By clarifying the powers of courts to support arbitration against third parties, the Arbitration Act resolves previous legal ambiguities. It confirms that court-ordered measures, such as evidence preservation, witness examination, or asset freezing, can be directed at ‘any other person,’ extending support even to non-signatories to the arbitration agreement. For India and Dubai, empowering courts to provide similar support is vital in complex commercial disputes where assets or evidence may be controlled by associated entities. This ensures that arbitration is not only efficient but also effective, bridging the gap between procedural autonomy and practical enforcement.

The Arbitration Act also codifies an objective duty of disclosure for arbitrators, requiring them to reveal any circumstances that could reasonably give rise to doubts about impartiality. Introducing a similar objective standard in India and Dubai would promote transparency, pre-empt challenges based on perceived bias, and enhance confidence in the integrity of the arbitration process. Finally, the Arbitration Act strengthens arbitrator immunity, protecting arbitrators from liability for resignation or bearing the costs of removal applications unless they act in bad faith. Strengthened immunity in India and Dubai would encourage experienced arbitrators to accept complex cases without fear of vexatious legal action, thereby safeguarding tribunal independence and confidence in decision-making.

In conclusion, the Arbitration Act demonstrates a careful balance between party autonomy, procedural efficiency, and judicial support. For India and Dubai, the lessons are clear: codify seat-centric rules, introduce mechanisms for early dismissal, strengthen interim relief and court support against non-parties, formalise arbitrator disclosure duties, and reinforce immunity protections. Implementing similar reforms would enhance the credibility, efficiency, and international competitiveness of domestic arbitration frameworks, making them more attractive for global parties seeking reliable dispute resolution.

For international parties, these reforms also provide practical guidance when negotiating arbitration clauses or selecting a seat. Understanding the Arbitration Act helps parties anticipate procedural rules, enforce interim measures quickly, and ensure their claims or defences are managed efficiently. By applying these insights, businesses can reduce uncertainty, control costs, and navigate cross-border disputes with the confidence and clarity needed when considering London as an arbitration seat.

If you need expert legal advice, contact Andre here.