A New UK Arbitration Act 2025

The much anticipated new Arbitration Act 2025 received royal assent on 24 February 2025 and is now a new piece of legislation ("the 2025 Act"). However, it has not yet come into force. It is not currently clear when that will be, although the government has stated that "the new law will be commenced through regulations as soon as practicable."  

The 2025 Act updates and makes several important amendments to the previous Arbitration Act 1996 ("the 1996 Act"). 

The Legislative Journey

The process of reform of the 1996 Act initially began in November 2021 when a consultation process was initiated by the Law Commission, resulting in a published report in 2022 and final recommendations in a proposed Arbitration Bill in 2023. The bill was first introduced to Parliament in November 2023. However, its passage was halted due to the UK general election and ultimate change of government in July 2024.  The bill was resurrected again by the new labour government and received its final reading in parliament in February 2025 before recently receiving royal assent.

Some of the key reforms which the 2025 Act introduces include:

Law Applicable to Arbitration Agreements

Pursuant to the Supreme Court’s ruling in Enka v Chubb (citation UKSC/2020/0091) an arbitration agreement is typically governed by the law of the underlying contract unless expressly stated otherwise. However, section 1 of the 2025 Act introduces a notable change to the law governing arbitration agreements where no express choice of law is specified in the arbitration agreement, the default governing law will now be the law of the seat of the arbitration.

Arbitrators’ Duty of Disclosure Codified

Section 2 of the 2025 Act requires arbitrators to disclose both prior to their appointment and during the course of the arbitration any relevant circumstances that might reasonably give rise to justifiable doubts as to their impartiality. 

Tribunal Powers for Summary Dismissal

Section 7 of the 2025 Act empowers tribunals seated in England and Wales  to summarily dismiss claims or defences that have "no real prospect of success" which aligns with the threshold test used for summary judgment in the English courts. 

Limited Court Review of Jurisdictional Challenges

Under section 11 of the 2025 Act a stricter framework for challenging arbitrators’ decisions on jurisdiction under section 67 of the 1996 Act is introduced providing that, where the tribunal has already ruled on its own substantive jurisdiction because of an application by a party to the arbitral proceedings, the court should not re-hear the evidence or hear new evidence (unless it is newly available), and should not hear new objections (unless they were not previously known to the applicant or reasonably discoverable), unless the court considers that doing so is in the interests of justice.

It is envisaged that this particular change will reduce the duration and costs of many jurisdictional challenges in the English courts and minimise circumstances in which losing parties can effectively engineer a re-hearing of the case before the courts. 

Practical Implications

Whilst the Law Commission indicated that it was “.. mindful of the consensus that [the 1996 Act] works well, and that root and branch reform is not needed or wanted” [1], the 2025 Act has been designed to modernise and fine tune the arbitration process by simplifying court procedures related to arbitration to increase clarity as well as reduce delays and costs for parties. The expectation is that this will help keep London as a world-leading seat of arbitration in the future, both domestically and internationally.