Eagerly anticipated, the Arbitration Act 2025 (the "2025 Act")1 comes into force on 1 August 2025. The 2025 Act makes "targeted improvements" to the Arbitration Act 1996 (the "1996 Act") rather than a wholesale replacement and deals with issues that have arisen over the past 25 years. It follows a lengthy consultation period and a Law Commission review of the 1996 Act.2
There are six key changes to the 1996 Act which we detail below:
1. Law of the arbitration agreement
Section 1 of the 2025 Act introduces a new default position on the law of the arbitration agreement. It is either
- The law expressly chosen by the parties, or
- Where no choice is made, the law of the seat of arbitration
The governing law of the underlying contract does not affect the law of the arbitration agreement. Following the "complex and unpredictable"3 outcome of Enka -v- Chubb [2020]4, the benefit of this change is simplicity. This change should mean that more arbitration agreements are governed by the law of England and Wales, which is a jurisdiction supportive of arbitration.
2. Codification of an arbitrator's duty of disclosure
An arbitrator's duty to disclose circumstances which might cause doubts about impartiality previously existed in common law only. The Halliburton -v- Chubb [2020]5 Supreme Court case highlighted the issues with this approach. The 2025 Act codifies the duty of disclosure. To maintain flexibility, the 2025 Act does not prescribe what information needs to be disclosed in compliance with this duty. However, the IBA's guidelines on conflicts of interest in international arbitration, issued last year6 provide a lot more guidance and set the standard for disclosure.
3. Summary disposal
Although number of arbitration forums' rules allowed awards to be issued on a summary basis, no explicit right of summary disposal existed under the 1996 Act. To allow for more efficient disposal of disputes, the 2025 Act introduces a new section 39A which grants this express power. The threshold for granting summary disposal is the same as for summary judgment in the civil courts in England and Wales – i.e. a claim or defence which has 'no real prospect of success'.
4. Challenges to tribunal's jurisdiction
Section 67 of the 1996 Act allows a party to challenge an award on the basis that the tribunal lacked substantive jurisdiction. In Dallah -v- Government of Pakistan [2010]7, the Supreme Court held that a challenge under section 67 must be considered at a full rehearing. This rule applied even if a full hearing took place during the arbitration itself. To simplify this process, the 2025 Act prevents a party which took part in the arbitration from:
- Raising any new grounds or evidence for their objection, and/or
- Asking the court to re-consider any evidence that was heard by the tribunal
5. Immunity
The 2025 Act extends the immunity of arbitrators to arbitrators who have resigned, unless the resignation is shown to be unreasonable. It also extends arbitrator's immunity to arbitrators who have been removed, unless the arbitrator has acted in bad faith. These two changes extend arbitrator's immunity to all but the most egregious cases.
6. Section 44 Orders in support of arbitration
The 2025 Act introduces provisions which expand and clarify the court's ability to make orders in support of arbitration. Orders supporting arbitration have always been possible against the parties to the arbitration, however, the position regarding third-parties was unclear. To rectify this uncertainty, the 2025 Act makes it clear that orders under section 44 of the 1996 Act can be made against third-parties. This brings arbitration more in line with English civil proceedings where the courts have long been able to make orders against a third party. The 2025 Act provides third parties full rights of appeal against all orders made.
Gaps in the Act
The 2025 Act does not introduce any statutory confidentiality provision. It also does not make any amendments to Section 69 of the 1996 Act which allows appeals of awards on points of law. Section 69 expressly permits the parties to opt out or agree that there is no right of recourse to appeal an award on a question of law.
The 2025 Act offers welcome changes and enhances England and Wales as a pro-arbitration jurisdiction.
[1] A copy of the Arbitration Act 2025 can be found here.
[2] For more detailed information on the Law Commission report which led to the 2025 Act, see DAC Beachcroft's article Refinement not revolution – Law Commission publishes its final report on changes to the Arbitration Act 1996.
[3] Law Commission – Review of the Arbitration Act 1996: Final report and Bill, paragraph 12.22
[4] [2020] UKSC 38
[5] [2020] UKSC 48
[6] The IBA's guidelines are available here. For more information see our article on the Key Insights on the 2024 IBA Guidelines.
[7] [2010] UKSC 46
