Arbitration Act 2025 receives Royal Assent

The new Arbitration Act 2025 stems from the draft Arbitration Bill published by the Law Commission in September 2023, along with its final report on its review of the Arbitration Act 1996. The final report and Bill followed an extensive consultation exercise by the Law Commission. The Law Commission concluded that the Arbitration Act 1996 generally works well, but made a number of recommendations for targeted reform.  The Arbitration Bill was introduced in November 2023, but its passage was delayed by the election last summer. 

The key reforms include:

1. The governing law of an arbitration clause: section 1 of the Act introduces a new default rule that the law governing an arbitration clause is the law of the seat of the arbitration, unless the parties expressly agree otherwise. This is a welcome amendment which resolves the uncertainty over the previous position, which was set out in the Supreme Court decision of Enka v Chubb [2020] UKSC 38. 
   
   
2. Summary disposal: the Act introduces a power for arbitral tribunals to summarily dispose of claims or defences that have no real prospect of success. This is similar to the power of the English courts to grant summary judgment, and uses the same threshold.
   
   
3. Arbitrator duty of disclosure: the Act codifies a new statutory duty of disclosure.  An arbitrator (or potential arbitrator who has been approached about being appointed) must disclose to the parties to the arbitration any circumstances that might reasonably give rise to justifiable doubts as to their impartiality in relation to the proceedings, as soon as reasonably practical.  An arbitrator is required to disclose any such relevant circumstances of which they know, or of which they ought reasonably to know.  The 1996 Act did not previously include a duty of disclosure, however the Supreme Court had decided that such a duty existed at common law in Halliburton v Chubb [2020] UKSC 48.
   
   
4. Arbitrator immunity: the Act extends the immunity of arbitrators to cover liability resulting from (i) an arbitrator's resignation, unless the resignation is shown to have been unreasonable; and (ii) an application for removal of the arbitrator, except where the arbitrator has acted in bad faith.
   
   
5. Powers of the courts to make orders in support of arbitration: the new Act introduces several provisions which enhance the powers of the English courts to issue orders in support of arbitration proceedings. These include:
   
   
1. Orders against third parties: the Act clarifies that unless otherwise agreed by the parties, the courts have similar powers to order relief against third parties in support of arbitration as they do in support of proceedings in court (for example, in relation to the preservation of evidence and obtaining evidence of witnesses).  Third parties have the right to appeal orders made against them.

2. Emergency arbitrators: the Act clarifies that the courts have powers to make orders enforcing the orders of emergency arbitrators, similar to the courts' powers to make orders enforcing the orders of ordinary arbitrators / tribunals.
   
   

6. Court review of jurisdictional challenges to awards: the Act simplifies challenges to awards under section 67 of the 1996 Act on the grounds that the tribunal did not have jurisdiction, where the tribunal has previously ruled on the jurisdictional objection and the challenging party participated in the arbitration.  In those circumstances: (i) the challenging party cannot raise any new grounds or evidence for the objection (unless the new grounds or evidence could not reasonably have been put before the tribunal), and (ii) evidence that was heard by the tribunal will not be reheard by the court; except where the court rules otherwise in the interests of justice. 

We covered the key reforms considered by the Law Commission in our previous article here. 

The final version of the Act can be found here. For more information, please contact a member of our Dispute Resolution team.