The Arbitration Act 2025: fab or fail?

Within 2 minutes of me hitting ‘send’ the QC recipient of my email rang and told me, in no uncertain terms, my idea would not fly: we couldn’t apply for summary dismissal in our arbitration. As a (then) trainee solicitor I was used to learning from more experienced lawyers, but I remember being rather taken aback to hear that English seated arbitrations (which I was taught were often faster and more cost effective than litigation) did not have an equivalent to strike out (CPR 3.4) or summary judgment (CPR 24.3) in court litigation.

I now know the position is more nuanced than the QC suggested on that brusque, late evening call 20-odd years ago. But the reality is the absence of an express power in the Arbitration Act 1996 (the ‘1996 Act’) to dismiss wholly unmeritorious claims summarily will have stayed the hand of many a tribunal for fear of challenge under section 68 (serious irregularity), despite English High Court indications (Travis Coal Restructured Holdings LLC v Essar Global Fund Ltd [2014] EWHC 2510 (Comm) at [44], [50]) that summary disposal may be within the scope of an arbitrator’s powers and duty of fairness.

The Arbitration Act 2025

Following wide consultation, the Arbitration Act 2025 (the ‘2025 Act’), which received Royal Assent on 24 February 2025 and the main provisions of which will come into force at some unspecified date in the future, will make a modest number of tweaks to the 1996 Act.

The change introduced by the 2025 Act that most pleases me is the grant to the tribunal of an express power to make (unless the parties agree otherwise) an award on a summary basis, both for individual issues and for entire claims and in response to entire defences with no real prospect of success. This very welcome legislative tweak strikes the balance between providing a tribunal with flexibility to adopt the method (subject, of course, to any applicable arbitral rules) it sees as most appropriate for determining appropriate issues and claims summarily, and ensuring safeguards and certainty of parameters via the considerable amount of jurisprudence behind the civil litigation ‘real prospect of success’ test for summary judgment. 

Had this amendment to the 1996 Act been made at the beginning of my career, I would have avoided that frosty call from a QC and, significantly, my client may well have obtained a successful award in that arbitration more speedily and at lower cost, whilst still affording appropriate safeguards to my client’s opponent.

What prompted this change now?

Traditionally, international arbitration was reluctant to recognise summary determination expressly (even though, in principle, arbitral tribunals have always had the tools as part of their broad case management powers). Arbitral rules and national laws tended not to include express provisions about it and tribunals therefore showed understandable reluctance to make summary determinations for fear of the award being exposed to challenge for failure to follow due process (e.g., the duty at section 33 of the 1996 Act). But the last decade has seen quite a shift, with numerous arbitral institutions (including HKIAC, ICC, LCIA, SIAC, SCC) joining ICSID (until then, an outlier in this respect) by explicitly affirming the arbitral tribunal’s power of summary determination. Although most national laws still do not deal with this issue expressly, the Law Commission recognised the benefits of doing so in our national legislation as a modernising amendment to the 1996 Act. 

Other notable changes 

Other changes to be introduced by the 2025 Act include:

• A new rule by which, absent express agreement by the parties, the arbitration agreement will be governed by the law of the arbitral seat. This is aimed at reducing disputes about the validity and interpretation of arbitration agreements;
• Codification of arbitrators’ duty of disclosure;
• Extension of the scope of arbitrator immunity by protecting them from liability for resignation unless that resignation was unreasonable and from the costs of an application for their removal unless they have acted in bad faith;
• Expressly granting emergency arbitrators the same powers as a fully constituted tribunal, regarding both peremptory orders and to permit the parties to apply to the court for orders in support of arbitral proceedings; and
• Narrowing the scope for new grounds of objection, new evidence, or rehearing evidence in court when hearing jurisdiction challenges to an arbitral award.

Conclusion

Taken together, will the reforms to be introduced by the 2025 Act have a significant impact? The government’s press release accompanying the 2025 Act will have us believe these changes will ‘turbocharge UK’s position as the world-leader in arbitration’. Rather, the 1996 Act is widely recognised as working well, so radical change was not needed. The 2025 Act is instead aimed at fine tuning and modernising aspects of arbitration in this country. It achieves that aim. 

As the government’s press release goes on to say: ‘[m]odernising arbitration law will ensure the UK remains the global destination of choice for the legal sector, outstripping competitors such as Singapore, Hong Kong and Paris.’ I agree. Although the 2025 Act is unlikely to lead to a sudden flood of additional cases into our jurisdiction, it should help to secure for the next decades our world-leading reputation in the growing international arbitration market.