The UK Arbitration Act 2025: key changes and summary disposal

June 2025  |  SPECIAL REPORT: INTERNATIONAL DISPUTE RESOLUTION

Financier Worldwide Magazine

June 2025 Issue

For almost 30 years, the Arbitration Act 1996 has provided a framework for arbitration in England, Wales and Northern Ireland, enhancing the jurisdiction’s reputation as a hospitable venue for arbitration. To ensure the 1996 Act remains state of the art and continues to uphold the jurisdiction’s leading role in international arbitration, the Law Commission initiated a review of the Act in September 2022, spearheading specific areas of reform.

In February 2025, the highly anticipated English Arbitration Bill received Royal Assent, with the Bill enacted as the Arbitration Act 2025. The UK government has indicated that the 2025 Act will be commenced through regulations “as soon as practicable”.

Once in force, the 2025 Act will apply to all English litigation and arbitration proceedings from that date onward, with the stated aim of its new provisions to make arbitration “fairer and more efficient by simplifying procedures to reduce costs and protecting arbitrators from unreasonable lawsuits” and “strengthen[ing] the court’s powers to support emergency arbitration” to allow for time sensitive decision making.

As Sir Peter Fraser, chair of the Law Commission, has remarked: “The passage of the Arbitration Act 2025 marks a significant milestone in further enhancing the UK’s arbitration landscape, and bolstering the primary position of English law globally in this important field. By enacting the Law Commission’s recommendations and proposed changes to the Arbitration Act 1996, we not only strengthen the arbitration framework but also reaffirm the UK’s position as providing the best choice of law for commercial arbitration across the world. This will help to keep the UK a leading destination for commercial arbitration.”

This article will address the impact of the 2025 Act for arbitration proceedings, with a focus on the benefits of the new provisions relating to summary judgments, and the power awarded to arbitral tribunals to make an award on a summary basis and quickly dispose of claims that they regard as having no real prospect of success.

As parties to litigation proceedings have long utilised the mechanism available under the Civil Procedure Rules (CPR) of applying for summary judgments, we also set out the grounds for summary judgment in litigation, the advantages that case law has demonstrated and what the 2025 Act has implemented from the English court process.

These provisions are of particular importance as summary judgment can bring matters or issues to an end early on, thereby avoiding lengthy proceedings and saving parties from incurring unnecessary costs including legal, expert and court fees, as well as expenses relating to disclosure processes.

Impact of the 2025 Act for arbitration proceedings

The 2025 Act will apply to any newly commenced arbitration proceedings, subject to any agreed modifications by parties, and includes noteworthy changes that will enhance arbitration proceedings and provide commercial clarity, including with respect to the governing law applicable to arbitration agreements (section 1).

The 2025 Act states that, in the absence of express agreement between the parties, the law applicable to an arbitration agreement will be “the law of the seat of the arbitration in question”. The only caveat being where arbitration agreements are formed under treaties or foreign investment legislation.

These new provisions reverse the Supreme Court’s decision in Enka v Chubb (2020), which held that where there is an express or implied governing law provided for in the underlying contract, the same law will apply to the arbitration agreement, and where there is no express or implied choice of law, the law of the seat of the arbitration will apply. The 2025 Act provides welcome clarity and relieves the emphasis placed on the law of the underlying contract, as this choice of law will no longer constitute an express governing law of the arbitration agreement.

The arbitral tribunal also face new duties of disclosure and impartiality, as foreshadowed by the Law Commission’s recommendations (section 2). These statutory duties include, without exception, disclosing to persons that approach them regarding their appointment as arbitrator and to the parties to the proceedings “circumstances that might reasonably give rise to justifiable doubts as to [their] impartiality in relation to the proceedings, or potential proceedings, concerned”, as soon as reasonably practical to do so. Although the 2025 Act now codifies the existing common law duties, it is typically acknowledged that arbitrators had previously been forthcoming and readily made disclosures in a timely manner.

Additional provisions affecting arbitrators include further clarification of the provisions relating to arbitrator immunity, such as with respect to applications for the removal of an arbitrator (section 3) and arbitrator resignations (section 4).

With regard to the jurisdiction of the tribunal, new provisions include placing limitations on applications for a determination of a preliminary point of jurisdiction, noting that “an application under this section must not be considered to the extent that it is in respect of a question on which the tribunal has already ruled” (section 5) and further clarification of the tribunal’s power to award costs (section 6).

The crucial provisions relating to the arbitral tribunal’s powers to make an award on a summary basis are discussed in detail below (section 7).

The 2025 Act also provides further clarification of the scope of the provisions relating to emergency arbitrators (section 8), including that the provisions apply where “the parties have agreed to the application of rules that provide for the appointment of an individual as an emergency arbitrator” and “an emergency arbitrator has been appointed pursuant to those rules”.

In addition, unless otherwise agreed by the parties, “if without showing sufficient cause a party fails to comply with any order or directions of the emergency arbitrator, the emergency arbitrator may make a peremptory order to the same effect, prescribing such time for compliance with it as the emergency arbitrator considers appropriate”. Further provisions include clarification that the scope applies to emergency arbitrators as well as tribunals, and adjustments to the courts’ powers exercisable in support of arbitral proceedings in respect of third parties (section 9).

In relation to challenging an arbitral award, the 2025 Act amends the remedies available to the court to include further remedies, such as “remit the award to the tribunal, in whole or in part, for reconsideration” and “declare the award to be of no effect, in whole or in part” (section 10), clarifies the procedure regarding challenges under section 67 of the Act 1996 (section 11) and varies the time limits to consider when challenging an award (section 12).

Grounds for summary judgment in litigation

Under part 24 of the CPR, parties can apply to the English courts for summary judgment where they are able to show there is no real prospect of a party succeeding on the claim, defence or issue in question, and there is no other compelling reason why the case or issue would be disposed of at trial.

English courts have established guidelines for granting summary judgment. Courts will focus on whether the claimant has a “realistic” prospect of success rather than a “fanciful” one. A “realistic” claim is one with some degree of conviction, meaning it is more than just arguable. The court will avoid a “mini-trial”, but will critically assess factual assertions, especially if contradicted by contemporaneous documents.

When making a decision, the court must consider the current and potential trial evidence and should hesitate to finalise a judgment if there are reasonable grounds to believe that a thorough factual examination could affect the outcome. A prompt decision is advised for straightforward legal points with sufficient evidence. The court should determine legally weak cases quickly to prevent unnecessary proceedings.

In suitable cases, applying summary judgment powers under part 34 of the CPR supports part 1’s “overriding objective”: reducing costs, speeding up proceedings, conserving resources and promoting justice, with early notification benefitting respondents if their case is doomed to fail.

Timing of summary judgment in litigation proceedings

Typically in English court proceedings, a claimant may not apply for summary judgment until the defendant has submitted an acknowledgment of service or a defence, although the court may grant the claimant permission to do so in certain cases.

In contrast, a defendant can request summary judgment at any point after proceedings start, without needing to file an acknowledgment of service or a defence first. The respondent to an application for summary judgment must be notified, at least 14 days before the hearing, of the hearing date and issues to be determined by the court, although this notice period can be shortened by the court.

The court can issue several orders when deciding a summary judgment application, including: (i) summary judgment on the claim or issue; (ii) strike out or dismissal of the claim; (iii) dismissal of the application; (iv) conditional orders; and (v) orders addressing costs.

Benefits of summary judgment for litigation proceedings

The sort of matters which can be suitable for summary judgment include cross-border debt claims, where a judgment will likely be more readily recognised and enforced in other jurisdictions than a default judgment.

For example, in a 2020 English High Court case, the claimant German banks applied for summary judgment to enforce a $97m ship finance loan agreement against the defendant borrowers, two Liberian companies, and the guarantor, their Greek beneficial owner. The claimants applied for permission to seek summary judgment, on the basis that a judgment on the merits was more readily enforceable than a default judgment, and the applications were granted.

More recently, the English High Court granted a claimant bank permission to apply for summary judgment, despite the fact the defendant debtors failed to file an acknowledgement of service or defence. The claimant bank applied for summary judgment rather than default judgment on the basis that the former would be more readily enforceable.

This was necessary given the defendant debtors were incorporated in other jurisdictions and the claimant bank was largely unaware of the location of the borrower’s assets it wished to enforce against. As such, summary judgments remain valuable to financial institutions aiming to maximise their chances of enforcing an English Court judgment in cross-border claims across different jurisdictions.

Benefits of summary judgment for arbitration proceedings

While tribunals had a duty to avoid “unnecessary delay or expense” under section 33(1) of the 1996 Act, there were no explicit provisions under the 1996 Act which empowered tribunals to issue an award on a summary basis.

Tribunals have, to date, been able to rely on the rules of particular arbitral institutions, such as those of the London Court of International Arbitration, the Singapore International Arbitration Centre and the Hong Kong International Arbitration Centre, to summarily dismiss cases where a claim is manifestly outside the jurisdiction of the tribunal or manifestly without merit. However, not all arbitral institutions made provision for summary disposal.

In line with the Law Commission’s recommendation, the 2025 Act now expressly empowers arbitral tribunals to make an award on a summary basis where appropriate, with article 7 of the 2025 Act providing an addition to the 1996 Act that confers the power to make an award on a summary basis.

Unless parties otherwise agree, the arbitral tribunal may, on an application made by a party to the proceedings (upon notice to the other parties), make an award on a summary basis in relation to a claim, or a particular issue arising in a claim, if the tribunal considers that a party has no real prospect of succeeding on the claim or issue, or a party has no real prospect of succeeding in the defence of the claim or issue.

For the purposes of subsection 1, an arbitral tribunal makes an award “on a summary basis” in relation to a claim or issue if the tribunal has exercised its power under section 34(1) (to decide all procedural and evidential matters) with a view to expediting the proceedings on the claim or issue.

Before exercising its power under section 34(1) as mentioned in subsection 2, an arbitral tribunal must afford the parties a reasonable opportunity to make representations to the tribunal.

Notably, however, these provisions are not made mandatory, despite the clear benefits with respect to efficiency, time management and costs. In this regard, the parties may apply to opt-out of the summary disposal powers granted to an arbitral tribunal, and the tribunal can agree to disapply them, and waive their right.

Conclusion

The 2025 Act will be welcomed by parties looking to expediently dispose of unmeritorious disputes through summary disposal, including financial institutions (FIs) that, anecdotally, have tended toward court proceedings rather than arbitration.

Tribunals in English-seated arbitrations may now be more inclined to consider applications for summary disposal, given they are expressly empowered to do so. Such applications are especially suited to cases involving undisputed facts, such as debt claims filed by FIs.

Further changes introduced by the 2025 Act will also be welcomed by FIs and parties that seek to conduct arbitration proceedings efficiently. Notably, revisions relating to the governing law of arbitration agreements (section 1) will reduce the potential for disputes over governing law, which can prolong arbitration proceedings.

Furthermore, authority given to emergency arbitrators to issue peremptory orders (section 8) will allow parties to more easily compel compliance with these orders, in situations where the tribunal is not yet fully constituted.

 

Sophia Cafoor-Camps and Elysia Stellakis are associates at King & Spalding. Ms Cafoor-Camps can be contacted on +971 (4) 377 9948 or by email: scafoorcamps@kslaw.com. Ms Stellakis can be contacted on +44 (0)20 7551 2155 or by email: estellakis@kslaw.com.

© Financier Worldwide

BY

Sophia Cafoor-Camps and Elysia Stellakis

King & Spalding

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