The Arbitration Act 2025 (the 2025 Act) received Royal Assent on Monday 24 February 2025 and is now law. The substantive provisions of the 2025 Act will take effect on a future date to be appointed by the Secretary of State and will apply to arbitrations commenced after they come into force.

Largely based on the recommendations of a Law Commission Final Report, the 2025 Act makes several discrete amendments to the Arbitration Act 1996 (the 1996 Act) with the aim of finessing rather than overhauling the framework of rules governing English-seated arbitration. 

What are the key changes?

• Governing law of the arbitration agreement: A new default rule provides that an arbitration agreement will be governed by the law of the arbitral seat unless the parties agree otherwise. This replaces the common law position¹ which was complex and favoured the law governing the contract in the first instance. The new rule will not apply to arbitration provisions contained in treaties or foreign legislation.
  
  The law governing the arbitration agreement determines fundamental issues regarding its validity and scope. To avoid unintended outcomes, parties who opt for a non-English seat but intend that English law should govern the entirety of their contract (including the arbitration clause) will need to clearly specify this choice. 
• Restrictions on jurisdictional challenges under section 67: Currently, where parties challenge an arbitral award on jurisdictional grounds under section 67 of the 1996 Act, the English courts conduct a full rehearing of the jurisdictional issues rather than confining themselves to reviewing the arbitral tribunal's award. The 2025 Act introduces the following new provisions: (i) parties are prevented from relying on new grounds or evidence which had not been relied upon before the tribunal; and (ii) the court will not rehear evidence already heard by the tribunal, other than where the court rules otherwise in the interests of justice.
• Duty of disclosure: The 2025 Act codifies an arbitrator's common law obligation² to disclose any circumstances that might reasonably give rise to doubts as to their impartiality. The duty is a continuing one and includes matters which the arbitrator should reasonably know (in addition to what is known to them).
• Power of summary disposal: Arbitrators are empowered to summarily dispose of claims which have no real prospect of success, akin to the summary judgment powers exercised by the courts. This is not a mandatory provision and parties are therefore free to exclude these powers.
  
  Similar powers are contained in the rules of major arbitral institutions such as the LCIA, SIAC and HKIAC, and so this will be most relevant where parties have not incorporated those procedural rules into their arbitration.
• Interim relief and powers in support of emergency arbitration: The 2025 Act confirms that the courts' ability to make orders in support of arbitration under section 44 of the 1996 Act extends to third parties.
  
  In a reflection of developments in arbitral rules since the enactment of the 1996 Act, the 2025 Act also strengthens the powers of emergency arbitrators and the courts in emergency arbitration by empowering emergency arbitrators to issue peremptory orders and enabling the courts to make orders requiring compliance. 

Comment

The long-awaited reforms to the 1996 Act described above are expected to bring welcome clarity and increased efficiency to London-seated arbitration and help maintain its position as a leading arbitral seat. Parties intending to resolve their disputes through arbitration seated in London (or who are considering the advantages of different seats) should have regard to the implications of these changes on their drafting. In particular: 

• Parties should note the change in rules relating to the governing law of the arbitration agreement. It is no longer safe to avoid expressly specifying a governing law for the arbitration agreement on the assumption that it will follow the law governing the main agreement, since the law of the arbitration agreement will now follow the seat. Particular care is needed where there is misalignment between the choice of seat and the choice of governing law.
• Parties intending to raise jurisdictional challenges in the course of their arbitration will need to give careful thought to the more limited ability to raise new objections or evidence subsequently under section 67.
• Parties who may previously have been reluctant to choose arbitration because of the perceived absence of an ability to obtain summary disposal of claims should now look more favourably on this form of dispute resolution where there is a London seat (or by incorporating institutional rules which also expressly permit this).

1. As set out in the Supreme Court's decision in Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38.↩
2. As established in Halliburton v Chubb [2018] EWCA Civ 817↩