English Arbitration Act 2025: Key Reforms

On 24 February 2025, the English Arbitration Act 2025 (the “2025 Act”) received Royal Assent, concluding a four-year reform process to refine and modernise the arbitration law in England and Wales.

Procedural History and Accompanying Documents

The reform began in March 2021, when the Ministry of Justice tasked the Law Commission with reviewing the English Arbitration Act 1996 (“1996 Act”) to ensure that it remains fit for purpose and continues to reinforce England and Wales as one of the world’s premier seats of arbitration amid legislative updates in competing jurisdictions.

According to the 2025 Act’s accompanying press release dated 24 February 2025, England and Wales host at least 5,000 arbitrations annually (domestic and international), generating over £2.5 billion in fees alone for the UK economy.

Following two consultation papers in September 2022 and March 2023 and a final report with a proposed bill in September 2023 (“Final Report”) (published along with a helpful summary of the Final Report), the Law Commission recommended targeted updates to enhance clarity, efficiency and legal certainty while preserving the 1996 Act’s well-functioning framework.

The proposed bill was initially introduced in the House of Lords in November 2023 but faced delays due to the 2024 general elections. It was later reintroduced after the King’s Speech in 2024, culminating in its final reading on 11 February 2025.

Other accompanying documents related to the 2025 Act include:

• the House of Commons Library Briefing Paper dated 14 February 2025 and the House of Lords Library Briefing Paper dated 25 July 2024, providing politically impartial analysis;
• the Explanatory Notes to the Arbitration Bill dated 6 November 2024;
• the Arbitration Bill Impact Assessment dated 16 July 2024;
• the Arbitration Bill Factsheet dated 19 July 2024;
• the Arbitration Bill Delegated Powers Memorandum dated July 2024;
• the Arbitration Bill European Convention on Human Rights Memorandum dated July 2024.

Entry Into Force Pending

As stated in the press release, the 2025 Act will come into force “as soon as practicable” through regulations. Until then, it does not apply to ongoing arbitrations or related English court proceedings (Section 17(4) (Commencement and Transitional Provision) of the 2025 Act). It will apply to arbitrations and related court proceedings commencing after the date of its entry into force, which will be set by the Secretary of State via regulations (Section 17(2) of the 2025 Act).

For comparison, the 1996 Act received Royal Assent on 17 June 1996 but came into force seven months later, on 31 January 1997, via The Arbitration Act 1996 (Commencement No.1) Order 1996.

Summary of Changes: Refining, Not Overhauling, the 1996 Act

In terms of structure, the 2025 Act, consisting of 18 Clauses, is not a standalone piece of legislation but rather amends the existing 1996 Act.

In terms of substance, the 2025 Act refines rather than overhauls the 1996 Act, introducing several key reforms:

• introducing a default rule that the law of the seat governs arbitration agreements to enhance legal certainty and prevent disputes;
• codifying arbitrators’ duty of disclosure of circumstances that might reasonably give rise to justifiable doubts as to their impartiality, reinforcing transparency and fairness;
• expanding arbitrators’ immunity against liability related to resignations and court applications for their removal, thereby supporting independent decision-making;
• empowering arbitrators to make awards on a summary basis, enabling them to swiftly resolve issues with no real prospect of success, improving procedural efficiency and preventing unmeritorious disputes from prolonging arbitration;
• strengthening court support for arbitration, ensuring that courts can enforce emergency arbitrator decisions and issue orders against third parties, such as preserving evidence or securing witness testimony;
• clarifying that if an arbitral tribunal has already ruled on its own jurisdiction, parties cannot apply to English courts under Section 32 of the 1996 Act (Determination of Preliminary Point of Jurisdiction) for a separate jurisdictional ruling; instead, they may challenge the tribunal’s decision only via Section 67 (Challenging the award: Substantive jurisdiction);
• narrowing the scope of challenging arbitral awards on jurisdictional grounds under Section 67, by preventing losing parties from introducing new evidence or arguments in an attempt to obtain a full rehearing, thereby reducing delays and unnecessary costs;
• allowing tribunals to award costs even if they lack substantive jurisdiction, ensuring that if an arbitration is terminated due to a lack of jurisdiction, the tribunal can still order a party to cover costs incurred up to that point, preventing unfair financial burdens;
• clarifying the start date of the 28-day time limit for challenging an award under Section 70;
• correcting a drafting error to clarify that appeals to the Court of Appeal from High Court decisions are available under all sections of Part 1 of the 1996 Act, except that an appeal requires the permission of the High Court only for those Sections which say so expressly;
• removing certain provisions of the 1996 Act related to domestic arbitration agreements that had never been brought into force.

An in-depth analysis of the incremental changes introduced by the 2025 Act follows below.

Law of the Seat Becomes the Default Law Applicable to Arbitration Agreements

The Act introduces a default rule that the law of the seat governs the arbitration agreement unless the parties agree otherwise (Section 6A(1)).

This rule replaces the common law position set in Enka v Chubb [2020] UKSC 38, which favoured the law of the underlying contract as the default law of the arbitration agreement. Specifically, in Enka, the UK Supreme Court affirmed (and refined) the three-stage test originally established in Sulamerica v Enesa Engenharia [2012] EWCA Civ 638 for determining the law applicable to an arbitration agreement: first, the law chosen by the parties; second, if absent, the law of the underlying contract; and third, if no governing law is specified, the law most closely connected to the arbitration agreement, typically the law of the seat (see further our commentary on Enka).

Unlike the 2025 Act, the national arbitration laws of other leading jurisdictions, such as France, Singapore and Hong Kong, do not have a similar default rule for the law governing the arbitration agreement, relying instead on case law to determine the applicable law. Leading arbitration rules, such as the 2021 ICC Arbitration Rules and the 2025 SIAC Arbitration Rules, also do not prescribe a default law, with the exception of the 2020 LCIA Arbitration Rules (Article 16.4), which adopt the law of the seat by default.

The Act also aptly clarifies in Section 6A(2) that an “agreement between the parties that a particular law applies to an agreement of which the arbitration agreement forms a part does not constitute express agreement that that law also applies to the arbitration agreement.” In other words, a general governing law clause in the underlying contract does not automatically apply to the arbitration agreement unless explicitly stated.

This new default rule enhances legal certainty by reducing disputes over the governing law of the arbitration agreement, thereby streamlining the arbitration proceedings and avoiding unnecessary delays.

Arbitrators’ Statutory Duty of Disclosure 

The 2025 Act introduces a statutory duty of disclosure for arbitrators, reinforcing impartiality and transparency in arbitral proceedings (Section 23A Impartiality: Duty of Disclosure). This reform clarifies and strengthens the common law duty established in Halliburton v Chubb [2020] UKSC 48, ensuring that arbitrators proactively disclose potential conflicts of interest.

Unlike the previous legal framework, where the duty of disclosure was derived from case law, the new provision offers greater legal certainty and uniformity across arbitrations seated in England and Wales. Importantly, the Act also specifies that an arbitrator must disclose not only what they actually know but also what they “ought reasonably to be aware”, addressing concerns that some conflicts might remain undisclosed due to lack of due diligence.

By codifying this duty, the Act reduces the risk of challenges to arbitral awards based on undisclosed conflicts, promoting confidence in the integrity of arbitration in England and Wales.

Expanded Arbitrator Immunity (Resignations and Removal Applications)

The 2025 Act strengthens arbitrator immunity by explicitly protecting arbitrators from liability for resignations and applications for their removal.

Arbitrators cannot be held liable for their resignation unless it is shown to be “unreasonable” (Section 29(4)), shifting the burden of proof onto the complaining party. This reform prevents arbitrators from being unfairly penalised for stepping down in good faith, ensuring they can withdraw from cases when appropriate without fear of financial consequences.

Additionally, the 2025 Act now clarifies that arbitrators are not personally liable for the costs of court proceedings seeking their removal unless they have acted in bad faith (Section 24(5A)). This corrects a problematic line of case law that suggested that an arbitrator can incur liability for the costs of the application of removal (Final Report, para. 5.12 and fn 150, citing, inter alia, Halliburton v Chubb [2020] UKSC 48).

By expanding immunity, the Act reinforces arbitrators’ independence, reducing undue pressure from parties who might attempt to manipulate proceedings through cost threats.

Introduction of Summary Dismissal in Arbitration

Clause 7 of the 2025 Act inserts a new Section 39A to the 1996 Act, empowering arbitrators, upon an application of a party, to summarily dismiss a claim or a particular issue arising in a claim or a defence that has no real prospect of success (Section 39A(1)), “with a view to expediting the proceedings on the claim or issue” (Section 39A(2)). Before making an award on a summary basis, the tribunal “must afford the parties a reasonable opportunity to make representations to the tribunal” (Section 39A(3)).

However, the Act does not prescribe specific procedures, leaving it to the tribunal’s discretion in consultation with the parties, ensuring maximum flexibility. This provision is also not mandatory. Parties can agree to opt out of it (Section 39A(1) mentioning “[u]nless the parties otherwise agree”).

Similar provisions exist in various institutional arbitration rules, including, for instance, the 2020 LCIA Arbitration Rules (the so-called early determination mentioned in Article 22.1(viii)), showing a global trend toward allowing summary dismissal​.

This provision aims to prevent unmeritorious claims or defences from unnecessarily prolonging arbitration proceedings, thus reducing both time and costs. Arbitrators have been hesitant to use summary procedures due to concerns about challenges to awards (due process paranoia), so this explicit statutory provision reassures arbitrators that summary disposal is legally sound.

Strengthened Powers for Emergency Arbitrators

Clause 8 of the 2025 Act extends the enforcement mechanisms available to regular arbitrators to emergency arbitrators.

Under the existing framework, if a party fails to comply with an arbitrator’s order, the arbitrator may issue a peremptory order under Section 41 (Powers of Tribunal in Case of Party’s Default), and if non-compliance continues, the affected party can apply to the court under Section 42 (Enforcement of Peremptory Orders of Tribunal) to enforce the tribunal’s order. Alternatively, the party may seek direct court intervention under Section 44 (Court Powers Exercisable in Support of Arbitral Proceedings). Clause 8 ensures that these enforcement provisions now apply equally to emergency arbitrators, strengthening their authority and ensuring that their urgent decisions, such as those related to evidence preservation or asset protection, are legally enforceable.

While the 2025 Act does not introduce a statutory framework for appointing emergency arbitrators (leaving this to institutional arbitration rules), it clarifies that emergency arbitrators’ decisions can be enforced in the same manner as those issued by fully constituted tribunals. By eliminating uncertainty over the enforceability of emergency arbitrator decisions, the 2025 Act ensures that urgent interim relief, such as preserving evidence or securing assets, remains effective and binding.

Court Powers Against Third Parties

Section 44 (Court Powers Exercisable in Support of Arbitral Proceedings) of the 1996 Act empowers courts to make orders in support of arbitration proceedings on the following matters: taking of witness evidence, preservation of evidence, orders relating to property and sale of goods that are subject to the proceedings, granting of interim injunctions, as well as the appointment of a receiver.

Clause 9 of the 2025 Act now clarifies that the same court powers under Section 44 are available against third parties (i.e., not parties to the arbitration proceedings), aligning the position in arbitration proceedings with the position in court proceedings. For instance, English courts may order third parties to produce evidence or instruct banks to seize funds in support of arbitration proceedings.

Streamlined Court Procedures for Challenging Arbitrator Jurisdiction

Under the principle of kompetenz-kompetenz, arbitral tribunals may decide on jurisdictional objections, but courts at the seat of arbitration have the final say. In England, a party may challenge the tribunal’s jurisdiction in two ways before English courts:

1. Before the Tribunal Rules: Under Section 32 of the 1996 Act, a party may seek a court ruling on jurisdiction before the tribunal decides on the issue.
2. After the Tribunal Rules: Under Section 67 of the 1996 Act, a party can challenge the tribunal’s jurisdiction after the tribunal has issued its ruling.

Clause 5 of the 2025 Act amends Section 32 of the 1996 Act to make it clear that it can only be invoked when the tribunal has not ruled on its own jurisdiction:

In section 32 of the Arbitration Act 1996 (determination of preliminary point of jurisdiction), after subsection (1) insert—
“(1A) 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.”

This means that if the tribunal has already ruled on its jurisdiction, then any challenge can only be brought through Section 67 of the 1996 Act. The 2025 Act essentially streamlines court procedures by ensuring that courts will not reconsider jurisdictional challenges that have already been decided by an arbitral tribunal. While this was the position already on a proper reading of the 1996 Act, this welcome change puts the matter beyond doubt that Section 32 is available only as an alternative to the tribunal ruling on its jurisdiction (Final Report, para. 1.126).

No Full Rehearing in Applications under Section 67 of the 1996 Act 

Under Section 67 of the 1996 Act (Challenging the Award: Substantive Jurisdiction), a party to an arbitration may apply to the English courts to challenge the tribunal’s award on its own jurisdiction or on the merits of the dispute on the basis that the tribunal lacks jurisdiction.

In its decision in Dallah v Pakistan [2010] UKSC 46, the UK Supreme Court held that even where the question of the tribunal’s jurisdiction has been fully debated before the tribunal, a challenge under Section 67 is a full rehearing before the court.

Clause 11 of the 2025 Act amends Section 67 of the 1996 Act and departs from the position in Dallah v Pakistan, providing that “evidence that was heard by the tribunal must not be re-heard by the court” and that there should be no new grounds of objection and no new evidence before the court, unless the applicant did not know and could not with “reasonable diligence” have discovered the ground or put the evidence before the court.

Arbitrators’ Power to Award Costs Even When Lacking Substantive Jurisdiction

Clause 6 of the 2025 Act clarifies that in cases where the tribunal or court rules that the tribunal lacks jurisdiction to resolve a dispute, the tribunal can nevertheless award the costs of the arbitration proceedings up until that point.

Clarification of the Start Date of the 28-Day Time Limit for Challenging an Award 

Under the 1996 Act, an arbitral award can be challenged before English courts because the tribunal lacked jurisdiction (Section 67) or for serious irregularity (Section 68), for instance, failure by the tribunal to deal with all the issues that were put to it. An arbitral award may also be appealed for a point of law (Section 69).

In all three cases, the challenge application or appeal must comply with the further requirements of Section 70, including exhausting (a) any available arbitral process of appeal or review and (b) any available recourse under Section 57 to correct the award or issue an additional award (Section 70(2)). The application or appeal to the court must be made “within 28 days of the date of the award or, if there has been any arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of that process” (Section 70(3)).

Clause 12 of the 1996 Act amends Section 70 to clarify that the time limit of 28 days begins to run as follows:

• in a case where there has been any arbitral process of appeal or review, the date when the applicant or appellant was notified of the result of that process;
• in a case where the tribunal has, under Section 57, made a material correction to an award or has made a material additional award, the date of the correction or additional award;
• in a case where a material application for a correction to an award or for an additional award has been made to the tribunal under Section 57 and the tribunal has decided not to grant the application, the date when the applicant or appellant was notified of that decision;
• in any other case, the date of the award.

Appeals to Court of Appeal from High Court Decisions

Under Part 1 of the 1996 Act, various applications can be made to the High Court, such as an application to stay legal proceedings in favour of arbitration (under Section 9) and an application to appoint an arbitrator (under Section 18(2)). Some provisions, including Section 18(5), explicitly require the High Court’s permission for an appeal to the Court of Appeal, while others, including Section 9, remain silent on this requirement.

Rights of appeal to the Court of Appeal are governed by the Senior Courts Act 1981 (for England and Wales) and by the Judicature (Northern Ireland) Act 1978 (for Northern Ireland). Schedule 3 of the 1996 Act amended these Acts, stating that no appeal was possible under Part 1 except for those sections which expressly required the permission of the High Court. This was a drafting error, however, which was identified by the House of Lords in Inco Europe v First Choice Distribution [2000] UKHL 15, a case involving Section 9, which held that appeals to the Court of Appeal are available under all sections of Part 1 of the 1996 Act, except that an appeal requires the permission of the High Court only for those Sections which say so expressly. Clause 13 of the 2025 Act corrects the drafting error in line with the Inco decision.

Removal of Domestic Arbitration Provisions

Clause 15 of the 2025 Act repeals Sections 85 to 88 of the 1996 Act, which refer to domestic arbitration agreements. Sections 85 to 87 of the 1996 Act have never been brought into force, whereas Section 88 was brought into force but only grants the Secretary of State the power to repeal Sections 85 to 87.

Conclusion: A Strengthened Arbitration Framework for the UK

By refining, rather than overhauling, the existing framework under the 1996 Act, the 2025 Act balances stability with necessary modernisation, enhancing efficiency, transparency and fairness. The reforms bring greater clarity to arbitration agreements, strengthen arbitrator independence and ensure courts can effectively support arbitration proceedings. These changes are expected to bolster business confidence, attract further international investment and reinforce England’s role as a leading seat for international arbitrations.