Arbitration rewired: The Arbitration Act 2025 

The Arbitration Act 2025 introduces a series of targeted reforms designed to maintain London’s status as a leading hub for international arbitration.  

Following extensive consultation and careful consideration of the evolving landscape of dispute resolution, the 2025 Act modernises the framework set out in the Arbitration Act 1996 while preserving its core strengths.    

Khaled Moyeed, Dispute Resolution Partner, delves into the act and its key reforms and what it means going forward. 

Background  

The reform process began in 2021, when the Law Commission launched a public consultation to review the 1996 Act. After two rounds of consultations, the Commission published its final recommendations and draft Bill in 2023. The Bill’s progress was delayed by the 2024 general election, but it ultimately received Royal Assent in February 2025. The new provisions will come into effect on a future date, applying only to arbitrations commenced after that date.  

What’s new: key reforms  

1. Governing law of arbitration clauses: The Act establishes a new default rule that the law governing an arbitration clause is the law of the seat, unless expressly agreed otherwise. This resolves uncertainty created by the Supreme Court decision in Enka v Chubb [2020] UKSC 38 and provides greater clarity for contracting parties.  

2. Summary disposal: Arbitral tribunals are now empowered to summarily dispose of claims or defences with no real prospect of success, mirroring the English courts’ power to grant summary judgment. This change promotes procedural efficiency and may deter parties from advancing hopeless claims to delay proceedings.  

3. Arbitrator duty of disclosure: The Act codifies an arbitrator’s duty to disclose circumstances that might give rise to justifiable doubts about their impartiality. This duty, clarified in Halliburton v Chubb [2020] UKSC 48, is now enshrined in statute, reinforcing trust in the arbitration process. The duty is grounded in what the arbitrator should reasonably be expected to know, rather than merely their actual knowledge.  

4. Extended arbitrator immunity: Arbitrators now benefit from immunity in relation to resignations (unless unreasonable) and applications for their removal (except in cases of bad faith). This reform aims to protect arbitrators from undue pressure and litigation risk.  

5. Enhanced court powers in support of arbitration: The new Act strengthens the English courts’ authority to issue orders in support of arbitration, including the power to grant relief against third parties (e.g., for preserving or obtaining evidence) and the right for third parties to appeal such orders. Courts also have the power to enforce the orders of emergency arbitrators, similar to those of regular arbitrators or tribunals.  

6. Simplified court review of jurisdictional challenges: The Act streamlines the process for challenging awards on jurisdictional grounds under Section 67 of the 1996 Act, particularly where the tribunal has already ruled on the objection and the challenging party participated in the arbitration. New grounds or evidence cannot be introduced unless it could not reasonably have been raised before, and the court will generally not rehear evidence already presented to the tribunal, unless in the interests of justice.  

Although the enactment of the Act is unlikely to result in immediate, significant changes to arbitral practice or procedure, there are several practical implications for parties and others involved in arbitration to consider. For instance:  

1. Arbitration agreement: Parties may want to explicitly include the law governing the arbitration agreement in their contracts, particularly if the contract is governed by English law but the seat of arbitration is outside of England.  

2. Jurisdictional objections: Parties intending to raise jurisdictional objections should carefully assess their strategy, considering available options such as filing a preliminary objection under Section 32, participating in the arbitration and raising the challenge during the proceedings, or waiting to bring a Section 67 challenge post-arbitration.  

3. Summary disposal: Parties might want to evaluate whether invoking the tribunal’s power of summary disposal is appropriate in their case.  

4. Arbitrators’ duty of disclosure: While the codification of arbitrators’ duty of disclosure does not significantly alter current practices, it serves as a reminder for arbitrators to thoughtfully consider the disclosures they make and to conduct inquiries when necessary.  

5. Arbitral institutions: Arbitral institutions may wish to review their rules to ensure consistency with the Act, particularly in relation to provisions on summary disposal and the law governing the arbitration agreement.  

What’s Missing?  

While the new Act makes important improvements, some areas remain unaddressed:  

1. Confidentiality: Despite its significance in arbitration, confidentiality remains uncodified, relying instead on common law principles. A statutory presumption of confidentiality would have strengthened London’s appeal as an arbitral seat. Jurisdictions such as Scotland and New Zealand have addressed this issue in their arbitration legislation.   

2. Third-Party funding and AI regulation: The Act overlooks the increasing role of third-party funding and the growing use of AI tools in arbitration. Addressing these issues would have helped future-proof the legislation.  

3. Corruption in arbitration: Although not part of the Law Commission’s review, recent high-profile cases have highlighted the need for clearer provisions addressing corruption. The government opted to leave this to arbitral institutions and professional bodies, but statutory guidance could have provided stronger safeguards.  

Final thoughts 

The Arbitration Act 2025 introduces thoughtful, incremental reforms that strengthen the efficiency, integrity, and flexibility of arbitration in England. While the omission of provisions on confidentiality, third-party funding, and corruption feels like a missed opportunity, the reforms that did make it into the Act will undoubtedly enhance the user experience and cement London’s reputation as a world-class arbitration centre. As parties, practitioners, and institutions adapt to the changes, the Act’s success will be measured by its ability to balance innovation with tradition — and so far, it looks well-placed to do just that.