Understanding the UK Arbitration Act 2025

July 2025 | FEATURE | LITIGATION & DISPUTE RESOLUTION

Financier Worldwide Magazine

July 2025 Issue

Significant changes are on the horizon for arbitration in the UK, and it is essential that all stakeholders are well-prepared for the reforms introduced by the Arbitration Act 2025. Having received Royal Assent on 24 February 2025, the Act marks a pivotal moment in the evolution of arbitration law across England, Wales and Northern Ireland.

The Arbitration Act 2025 represents a carefully considered update to the UK’s arbitration framework, replacing the Arbitration Act 1996, which, while effective and widely respected, had begun to show its age. Over the past decade, there has been growing recognition of the need to modernise the 1996 Act, particularly as other leading arbitration jurisdictions – such as Singapore, Switzerland and Germany – have undertaken substantial reforms to enhance their own legal frameworks. The UK, keen to maintain its status as a global hub for commercial arbitration, has now responded with a suite of targeted legislative updates.

The new Act applies to arbitration proceedings commenced after its entry into force, as well as to any related court proceedings. It is the culmination of an extensive review and consultation process led by the Law Commission, which was tasked with assessing whether the 1996 Act remained fit for purpose. The Commission’s approach was evolutionary rather than revolutionary, aiming to fine-tune the existing legislation rather than replace it wholesale. This measured strategy reflects the consensus that the 1996 Act has served the arbitration community well, but that certain refinements were necessary to ensure continued relevance and competitiveness.

Key reforms introduced by the 2025 Act

Among the most notable reforms introduced by the 2025 Act is the express confirmation of arbitral tribunals’ power to issue summary awards. This allows a tribunal, upon application by a party, to dismiss claims or defences that have no real prospect of success. This procedural tool is expected to enhance efficiency and reduce costs, particularly in cases where one party’s position is clearly untenable.

Another key development is the introduction of a default rule regarding the governing law of arbitration agreements. In the absence of an express choice of law, the law of the seat of arbitration will now govern the arbitration agreement. This change promotes legal certainty and aligns with the expectations of parties that choose London as the seat of arbitration, reinforcing the primacy of English law in international commercial disputes.

The Act also introduces a revised framework for jurisdictional challenges under section 67. Under the new provisions, courts will be discouraged from re-hearing evidence already presented to the arbitral tribunal and will be limited in their ability to entertain new grounds or evidence. This reform is designed to streamline proceedings and reduce the scope for tactical litigation aimed at delaying enforcement.

“The Arbitration Act 2025 represents a carefully considered update to the UK’s arbitration framework, replacing the Arbitration Act 1996, which, while effective and widely respected, had begun to show its age.”

Further clarity has been provided regarding the powers of courts in support of arbitral proceedings, including those involving emergency arbitrators. The Act strengthens the role of emergency arbitrators by granting them the authority to issue peremptory orders and ensuring that such orders can be enforced by the courts in the same manner as those issued by regular tribunals. This enhancement is particularly valuable in urgent cases where interim relief is required before the constitution of the full tribunal.

The 2025 Act also codifies the duty of disclosure for arbitrators. Arbitrators are now under a statutory obligation to disclose any circumstances that might reasonably give rise to doubts about their impartiality. This codification reflects the principles established in the Supreme Court’s decision in Halliburton Company v Chubb Bermuda Insurance Ltd and aims to bolster confidence in the integrity of arbitral proceedings.

In addition, the Act strengthens arbitrator immunity in relation to resignation and removal. Arbitrators will now benefit from enhanced protection against liability arising from their resignation or from applications for their removal, thereby supporting the independence and impartiality of the arbitral process.

Practical implications

While the reforms introduced by the Arbitration Act 2025 are relatively modest in scope, they carry significant practical implications. The Law Commission itself acknowledged that the 1996 Act continues to function effectively and that comprehensive reform was neither necessary nor desirable. Nevertheless, the changes introduced will have a tangible impact on arbitral practice. For instance, parties will now have greater access to summary dismissal procedures, which may encourage more efficient resolution of disputes. Additionally, parties that choose English law to govern their contracts but opt for a different arbitral seat should now consider expressly specifying the law governing the arbitration agreement to avoid unintended consequences.

Arbitrators, too, must adapt to the new regime. They will need to be more vigilant in assessing potential conflicts of interest and in making timely disclosures. The enhanced disclosure obligations and immunity provisions are designed to support fair and impartial decision making, while also protecting arbitrators from undue legal exposure.

The Arbitration Act 2025 ensures that the UK’s arbitration legislation remains modern, effective and aligned with international best practices. By clarifying the law applicable to arbitration agreements, streamlining jurisdictional challenges and empowering tribunals with new procedural tools, the Act reinforces London’s position as a leading seat for arbitration. These reforms, though evolutionary in nature, are a timely and necessary response to the evolving demands of international commerce and dispute resolution.

As global competition among arbitral seats intensifies, the UK’s commitment to maintaining a robust and forward-looking arbitration framework will be crucial. The Arbitration Act 2025 is a clear signal of that commitment, and it will undoubtedly play a central role in shaping the future of arbitration in the UK and beyond.

Richard Summerfield