Neil Newing, Philipp Kurek, and Pietro Grassi discuss the Arbitration Act 2025 in The Law Society Gazette

For nearly three decades, the Arbitration Act 1996 (the “1996 Act”) has provided a robust legal framework for arbitrations seated in England, Wales, and Northern Ireland [1]. However, concerns over ambiguities and procedural inefficiencies in certain areas prompted a review of the Act, culminating in several measured amendments introduced via the Arbitration Act 2025 (the “2025 Act”), which received royal assent on 24 February 2025.

Discussed below, the amendments modernise England’s arbitration laws while preserving the core principles that have long underpinned London’s position as a leading seat for international arbitration.

New Default Rule on Governing Law of Arbitration Agreements

One of the most significant changes introduced by the 2025 Act concerns the governing law of arbitration agreements. Previously, the Supreme Court in Enka v. Chubb set out that, where parties had not expressly specified the governing law of their arbitration agreement, the law governing the main contract would typically apply. This position was, however, subject to various exceptions, causing concerns that this created uncertainty leading to unnecessary disputes.

The 2025 Act introduces a new clear rule that, unless parties have expressly agreed otherwise, the governing law of the arbitration agreement will default to the law of the seat. This is the opposite of the position taken in Enka and, importantly, the 2025 Act makes it clear that party agreement on the law governing a contract in which the arbitration agreement is contained does not constitute express agreement that that law also applies to the arbitration agreement. Parties are therefore strongly advised to expressly specify the law governing their arbitration agreement additionally and separately to any general applicable law provision in the main contract.

It is also important to note that, while the 2025 Act will not apply retrospectively to arbitrations commenced before its implementation[2], certain provisions – notably those relating to the governing law of arbitration agreements – will also apply to agreements predating the 2025 Act’s commencement. Parties with existing English law-governed contracts, but a seat in another jurisdiction, should therefore consider reviewing and, if necessary, amending those contracts to specify explicitly the governing law of the arbitration agreement.

Introduction of Summary Dismissal Powers

Unlike courts, arbitral tribunals under the 1996 Act previously lacked an unequivocal statutory basis for summarily dismissing unmeritorious claims or defences at an early stage, creating inefficiencies as arbitrators sometimes hesitated to dispose of obviously weak claims without a full hearing.

Unless the parties agree otherwise, the 2025 Act now expressly provides arbitrators with the power to make an award on a summary basis in relation to a claim or issue in the arbitration. The new statutory provision allows tribunals, upon application by a party, to dismiss claims, defences, or issues that have “no real prospect of succeeding” (i.e., the same standard applied in English court proceedings for summary dismissal).

This power is not entirely new as it aligns with existing practice under most institutional rules, which already permit early determination of manifestly unmeritorious claims, but will hopefully give arbitrators more confidence in exercising it.

Formal Recognition of Emergency Arbitrators

The 1996 Act predated the practice of emergency arbitrators that has developed in institutional rules and thus did not contain any provisions addressing it. The 2025 Act provides a welcome update to the law, ensuring that emergency arbitrators hold the same authority as tribunals constituted in the usual manner. In this respect, the 2025 Act confirms the ability of emergency arbitrators to issue enforceable peremptory orders, and to authorise applications to court in support of arbitration proceedings.

Enhanced Arbitrator Disclosure Obligations

The 2025 Act codifies an arbitrator’s duty to disclose any circumstances that might reasonably call their impartiality into question. This duty, which builds on principles established in Halliburton v. Chubb, applies both before and during an arbitrator’s appointment. It also extends to circumstances the arbitrator ought reasonably to be aware of. By enshrining this duty in legislation, the 2025 Act seeks to ensure a consistent approach to impartiality across arbitrations seated in England.

Limiting Jurisdictional Challenges of Awards

The 2025 Act introduces significant changes to jurisdictional challenges under Section 67 of the 1996 Act. Previously, such challenges could result in a full rehearing by the court, allowing parties to reargue jurisdictional disputes already considered by the tribunal.

The revised framework limits the scope of objections and evidence that may be advanced in court. A full rehearing will only be permitted where necessary in the interests of justice. This change aims to prevent unnecessary delays (and increased costs) and ensure that jurisdictional challenges are resolved efficiently.

Other Notable Amendments

The 2025 Act also: amends Section 44 of the 1996 Act to clarify that court powers in support of arbitration (e.g. ordering witness testimony) may be exercised with respect to third parties as well as to the parties to the arbitration; and expands the immunity available to arbitrators, shielding them from liability for costs arising from their resignation or removal (unless unreasonable or in bad faith).

Conclusion: Incremental Changes Rather than Wholesale Reform

The amendments introduced by the 2025 Act represent a considered evolution of the existing arbitration framework rather than a radical overhaul. They take into account how arbitration practice has developed (particularly in various institutional rules) over the past three decades and ensure the Act reflects those changes, while maintaining the fundamental structure which has stood the test of time. By enhancing clarity and efficiency while maintaining party autonomy, the 2025 Act reinforces England’s position as a leading jurisdiction for international arbitration.

[1] Arbitration in Scotland is governed by the Arbitration (Scotland) Act 2010.

[2] NB the Secretary of State has yet to confirm when its substantive provisions will come into force.