The Arbitration Act 2025: a welcome update for English arbitration law

The Arbitration Act 2025 (AA25) received Royal Assent on 24 February 2025 and will come into force on a date to be announced. It makes few amendments to the Arbitration Act 1996 (AA96), which has served well and stood the test of time. However, English arbitration legislation has now been thoroughly reviewed in light of modern practice and developments elsewhere, and receives a shiny new update. It will assist in securing London’s place as a leading seat for international arbitration, and the inward investment that this brings.

The one disappointment is that, as with AA96, AA25 does not deal with confidentiality. Any clarifications to the law in this regard must continue to come from the English courts. 

Key updates

The law applicable to the arbitration agreement 

Under AA25, the law of the seat of arbitration will govern arbitration agreements (other than those formed under treaties or foreign investment legislation) unless the parties expressly agree otherwise. Simply stating a governing law for the underlying contract will not displace this default rule. This is a welcome simplification of the law given the uncertainty and confusion that followed the Supreme Court’s decision in Enka v Chubb.   

New framework for jurisdictional challenges 

AA25 adopts a pragmatic approach to jurisdictional challenges. From a purist standpoint, if a tribunal lacks jurisdiction any decision it reaches should be disregarded. However, proceeding on that basis can waste a lot of time and costs, providing the losing party with ‘two bites of the cherry’. AA25 sets out a regime that strikes a practical balance. In particular, subject to the court’s flexibility to act in the ‘interests of justice’, a party objecting to jurisdiction that participated in the arbitration proceedings will not be able to: (a) raise a ground of objection that was not put to the arbitral tribunal (unless they did not previously know and could not with reasonable diligence have discovered the ground); (b) rely on new evidence (unless they could not, with reasonable diligence, have put this to the tribunal); and (c) ask the court to reconsider evidence that was heard by the tribunal.

Summary disposal powers 

AA25 provides that, unless the parties otherwise agree, an arbitral tribunal can, on a party’s application, summarily dismiss claims or defences that have ‘no real prospect of succeeding’.

Where it is clear that there is no legal basis for a claim or defence, a tribunal should be able dismiss it. However, in recent years, concerns that tribunals may not feel confident in reaching that decision until the end of a long arbitration process have led to various arbitration rules introducing express powers for a tribunal to reach such an early determination; for example, the London Court of International Arbitration provision for claims or defences which are ‘manifestly without merit’. The introduction of an express statutory power provides welcome clarity and should strengthen the resolve of tribunals in making determinations at an earlier stage of proceedings. It may also encourage parties to use arbitration for financial disputes, where the availability of summary judgment in the courts has long been seen as an advantage. 

Interesting questions include whether the statutory test of ‘no real prospect of succeeding’, which is closer to the English court test for summary judgment than formulations such as ‘manifestly without merit’, will prove an easier threshold to meet, and whether the approach to summary judgment by the courts will be replicated by tribunals.

Other provisions of particular note

AA25 introduces a statutory obligation upon arbitrators to make a disclosure of circumstances that might reasonably give rise to justifiable doubts as to their impartiality, which essentially codifies the existing position, but provides welcome clarity.

Provision is also made for emergency arbitrators, which did not exist when the AA96 was enacted, and which will now be able to make peremptory orders that can be enforced by the courts.  

The immunity of arbitrators has also been extended to protect them when they resign (unless this was unreasonable) and against the court costs of their removal.

Finally, AA25 clarifies that the court’s powers in support of arbitration under Section 44 of the AA96 can be exercised in relation to third parties.