The Arbitration Act 2025 and maintaining London’s competitive edge

8 Apr 2025Opinion

Matthew Weiniger KC and Ali Amerjee share their thoughts on the key reforms being brought in by the Arbitration Act 2025 aimed at ensuring that London maintains its status as the leading destination for global arbitration

London is arguably the world’s most preferred destination for arbitration. It benefits from a combination of robust Arbitration Act 1996 (the ‘1996 Act’) provisions that regulate English arbitration proceedings and the pragmatic English court decisions concerning arbitration. But London faces stiff competition from other market-leading arbitral seats like Singapore, Paris, Dubai and Geneva. To stay ahead of the competition and streamline the principles arising out of certain English court decisions, the UK parliament enacted the Arbitration Act 2025 (the ‘2025 Act’).

The 2025 Act introduces many reforms to the 1996 Act and received Royal Assent on 24 February 2025. The substantive provisions of the 2025 Act will take effect on a future date to be appointed by UK’s Secretary of State and will apply to arbitrations (or any court proceedings related to such an arbitration) commenced after they come into force. While the 2025 Act introduces many amendments to the 1996 Act, we discuss the reforms that, in our view, are key to maintaining London’s status as the leading arbitral destination.

The key reforms

First, the 2025 Act inserts a default power of summary disposal that may be exercised by an arbitral tribunal on application by a party. A successful application would have to pass the test of ‘no real prospect of success’ on the relevant issue. This will address the critique that arbitral tribunals may be cautious about using procedural discretions to summarily dispose of matters for due process concerns.

Arbitration users (the parties) will also welcome this reform given their (understandable) focus on quicker and cost-effective dispute resolution. While some arbitral institutions already provide for such procedures, statutory recognition of this power will also benefit ad hoc English-seated arbitration.

Second, reforms have been introduced to aid the enforcement of the orders of emergency arbitrators (who can order urgent short-term measures) by giving them powers to: (1) issue peremptory orders following non-compliance, which can be enforced by the court; and (2) permit applications by parties to support the arbitral proceedings (e.g., for preserving assets or evidence). By strengthening the emergency arbitrators’ powers, the 2025 Act has reassured arbitration users about the robustness of the institution of emergency arbitrators.

Third, the amendments make clear that all orders of the court in support of arbitral proceedings (e.g., witnesses) can be made against third parties. Previously, there was uncertainty about the extent to which such orders can be used against third parties. For example, court decisions took different views, ruling that extent of their powers may even depend on the precise power exercised.

The critique

However, not all of the 2025 Act’s amendments have been well received by the arbitration community. For example, changes to the ability of the English court to hear a preliminary point of jurisdiction or a point of English law mean that the court no longer needs to consider whether certain requirements have been met (like whether the court’s intervention would save costs).

This amendment may be considered contrary to the usual aim of minimising court intervention in the tribunal’s decision making, as there is a possibility that it encourages more applications for preliminary decisions by the court. However, given that parties can opt-out of this provision, it may not do much harm.

The 2025 Act did not reinforce the confidentiality regime of arbitral proceedings. Consequently, parties will need to grapple with the wide-ranging approaches to confidentiality and the important exceptions afforded in the arbitral rules they select. But in the legislature’s defence, the Law Commission did not recommend reform in this regard.

Conclusion

In any event, even the 2025 Act’s staunchest critic cannot deny that overall, it has taken on board most of the Law Commission’s 2023 recommendations and brought wide-ranging reform to the 1996 Act. These reforms will help London remain a pre-eminent destination for global arbitration and may even help it steal a march over its competitors, ensuring that arbitration only continues to add to the c.£2.5 billion that it already contributes in arbitral and legal fees to the British economy.

Legal News desk contact: editorial@solicitorsjournal.com|

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