The New English Arbitration Act 2025

A new English Arbitration Act 2025 and the main changes to the position under the Arbitration Act 1996

The new English Arbitration Act 2025 (“2025 Act”) received Royal Assent on 24 February 2025 after its passage through the UK Parliament, meaning that it becomes law and will come into force. The 2025 Act introduces amendments to the Arbitration Act 1996, which governs many maritime arbitrations. The changes in the 2025 Act are limited and it is far from a complete overhaul of the 1996 Act, which was found to be working well. The new legislation follows from the Law Commission’s review of the 1996 Act and is closely based on the Law Commission’s recommendations.

The key changes brought about by the 2025 Act are as follows:

1. The statutory rule for the law applicable to the arbitration agreement. 

Under the 2025 Act, if the parties have not specified which law applies to the arbitration agreement, then the law of the seat of the arbitration will automatically apply (with one exception relevant to investor-State arbitrations). That is a change from the current position (set out in case law rather than in a statute) which is that in the absence of specific provision by the parties, the law of the contract will generally be implied to govern the arbitration agreement. The new approach should be simpler and provide more certainty. It will result in more arbitration agreements being governed by English law when the seat of the arbitration is in England and Wales. 

2.  Arbitrators’ statutory duty of disclosure. 

The 2025 Act contains a new statutory requirement for arbitrators and potential arbitrators to disclose any “relevant circumstances” which they are aware of or become aware of. Relevant circumstances are “circumstances that might reasonably give rise to justifiable doubts as to the individual’s impartiality in relation to the proceedings, or potential proceedings”. While there is a similar duty at common law, the Law Commission recommended codifying the duty in the Act itself. Under the 2025 Act, an individual will be treated as being aware of circumstances of which they ought reasonably to be aware. In other words, the duty of disclosure goes beyond actual knowledge. The Law Commission recommended that this higher standard is appropriate given the importance of disclosure to maintaining (the appearance of) impartiality in arbitrators.

3.  Tribunal’s power to make an award on a summary basis

This new power is similar to a judge’s power to give summary judgment in the English courts. This allows a party to apply for an award on a summary basis on a claim or issue where the other party has “no real prospect of succeeding” on the issue or in defending the issue. There is little guidance on how this process is to work in practice in the 2025 Act itself, and the Law Commission recommended that the procedure should be a matter for the tribunal, having consulted with the parties. Summary disposal can provide an efficient method of resolving suitable disputes, and it is thought that putting summary disposal on a statutory footing might provide reassurance to arbitrators, and to foreign courts asked to enforce English arbitration awards.

4.  Court Determination of the Tribunal’s Jurisdiction

The 2025 Act clarifies that a court cannot consider an application to determine the tribunal’s substantive jurisdiction if the tribunal has already ruled on the same issue. This reform strengthens the tribunal’s autonomy and limits judicial interference in matters already decided by arbitrators.

5.  Jurisdictional Challenges to Awards Under Section 67

The 2025 Act introduces significant amendments to Section 67 of the 1996 Arbitration Act, which governs challenges to an award on jurisdictional grounds. Notably, where a party has objected to the tribunal’s jurisdiction and the tribunal has ruled on the matter, any subsequent Section 67 challenge by a party who participated in the arbitration will now only be by way of review and not result in a full rehearing of the evidence.

The court will not consider new grounds for objection or fresh evidence unless:
(i) Doing so is in the interests of justice, and
(ii) The objecting party neither knew nor could have reasonably discovered the grounds or evidence at the time of the arbitration.

This amendment aims to prevent unnecessary duplication of proceedings and reinforces the tribunal’s authority.

6.  New Powers to Emergency Arbitrators

The 2025 Act extends to emergency arbitrators under Section 41A, the existing power under the 1996 Arbitration Act – which provided that if a party failed to comply with any order or directions from the tribunal, the tribunal could issue a peremptory order requiring compliance within a prescribed timeframe. 

Additionally, the new law empowers emergency arbitrators to grant permission for a party to apply to the court for a Section 44 order. This may include orders for the preservation of evidence, the taking of witness testimony, or other urgent matters. Furthermore, the court is now expressly authorized to issue orders in support of emergency arbitrators, aligning its powers with those already available in regular (non-emergency) arbitration proceedings under the 1996 Act.

7.  Immunity of Arbitrators

The 2025 Act also strengthens an arbitrator’s immunity by amending Sections 24 and 29 of the 1996 Act. Under the new law:

1. An arbitrator cannot be held liable for costs in removal proceedings unless they acted in bad faith.
2. An arbitrator’s resignation does not give rise to liability unless it is shown to be unreasonable.

These changes enhance arbitrators’ protections, reducing the risk of vexatious claims and reinforcing the integrity of arbitration proceedings.