A colleague of ours remembers going on a one-day course on the “new” arbitration act when it had just come into force. That was nearly thirty years ago and – on the whole – the Arbitration Act 1996 has generally served us all well over the last three decades. Nevertheless, some updates were needed to meet the needs of arbitration users, as well as the challenges which arbitration proceedings sometimes face. The provisions introduced by the new Act reflect, by and large, what has been decided in caselaw or – on the other hand – they are designed to get around caselaw.

The reforms introduced by the Arbitration Act 2025 are designed to enhance the efficiency, clarity, and global competitiveness of England and Wales as the leading jurisdiction for international arbitration.

The 2025 Act will govern all arbitration proceedings initiated after its entry into force on 1 August 2025, as well as any related court proceedings brought in relation to arbitration proceedings commenced thereafter. The new Act introduces new sections to the Arbitration Act 1996, which is still in force. The Arbitration Act 1996 is still very much fit for purpose and our clients can incorporate English Law and Arbitration into their contracts with confidence.

Key reforms introduced by the Arbitration Act 2025: What do you need to know?

Introduction of New Tribunal Power for Summary Dismissal

Strengthening the Powers of the Court in Relation to Arbitration

In our opinion, there are two key provisions introduced by the new Act – in other words, provisions which have teeth and will have a day-to-day impact in a number of arbitrations.

The new power for arbitrators is the first of them. In our view, this new power should be most welcome and parties should be encouraged to agree to their arbitrators having this power. Many of us over the years have had to run arbitrations (sometimes for a long time) and incur costs for clients where the other party (claimant or respondent) has a case which has no real prospect of success. A new section, 39A, to the 1996 Act expressly empowers tribunals (subject to party agreement) to issue summary awards on claims or defences that have no real prospect of success. This provision aims to streamline proceedings and reduce unnecessary costs, aligning English arbitration practice with those of leading arbitral institutions.

Strengthening the Court’s powers is the second key provision. The English High Court has specific powers under section 44 of the 1996 Act in support of arbitration. Section 44 is now amended to allow the Court to make Court Orders in support of the arbitration against third parties as well as the parties to the arbitration. This is a fundamentally useful tool for parties, and it will be interesting to see how the Court exercises its use of this new power.

As to other key take-aways:

1. Clarification of the Governing Law of Arbitration Agreement

In our experience, it is not often that parties forget to include a governing law for their agreements, but this can happen. However, following the decision of the Supreme Court in Enka v Chubb, the position was that where there was no agreement on governing law, then the governing law for an arbitration agreement would be the law with which the agreement was most closely connected. This, of course, would not always give an easy or guaranteed answer. The 2025 Act introduces a new section 6A to the 1996 Act, which provides that an arbitration agreement will be governed by the law expressly agreed by the parties to apply, failing which, it will be governed by the law of the seat of the arbitration i.e. where the agreement says that the arbitration is to take place.

2. Codification of Arbitrators’ Duty of Disclosure

Following the high-profile Supreme Court judgment in Halliburton that there is a legal duty on an arbitrator to disclose circumstances which might give rise to justifiable doubts as to their impartiality, a new section 23A to the 1996 Act codifies the common law duty of arbitrators to disclose such circumstances. This duty is ongoing and includes matters that the arbitrator ought reasonably to be aware of, thereby promoting transparency and trust in the arbitration process.

3. Introduction of New Tribunal Power to Award Costs Despite No Substantive Jurisdiction

Even if a Tribunal does not have substantive jurisdiction over an arbitration, it can still award costs. Again, this is a welcome power.

4. Introduction of New Power for Emergency Arbitrators

Some sets of arbitral rules (e.g. the LCIA Rules) allow for the appointment of an emergency arbitrator. A new section, 41A, to the 1996 Act removes any doubt that these arbitrators do not have the same powers as a fully constituted tribunal to issue peremptory orders and permit the parties to apply to the court under Section 44 (i.e., the provision which empowers the court to make orders in support of arbitral proceedings). This reform reinforces the effectiveness and enforceability of interim measures ordered by emergency arbitrators.

5. Revised Framework for Jurisdictional Challenges

The 2025 Act introduces new sections 67(3B) and 67(3C) into the 1996 Act, which limit the circumstances in which a party may challenge an award on the grounds of a tribunal’s lack of substantive jurisdiction. Specifically, a party may not rely on:

(i) new grounds of objection or new evidence, unless such material could not, with reasonable diligence, have been presented to the tribunal; or

(ii) evidence already considered by the tribunal in each case, subject to the court ruling otherwise in the "interests of justice".

What this means, in reality, is that the Court in deciding on matters under section 67 will not conduct a full rehearing of the arbitration – section 67(3C) specifically says “evidence that was heard by the tribunal must not be re-heard by the court”. This moves away from the position of the Supreme Court, which was that parties challenging a tribunal’s jurisdiction were entitled to a full re-hearing. The Court will only conduct a review of things. How this will work out in practice remains to be seen, but the positive is that costs will be saved.

6.Time Limit for Challenging an Arbitration Award

Time is calculated differently, depending on the circumstances.

(a) in a case where there has been any arbitral process of appeal or review, the date when the applicant or appellant was notified of the result of that process;

(b) in a case where the tribunal has, under section 57, made a material correction to an award or has made a material additional award, the date of the correction or additional award;

(c )in a case where a material application for a correction to an award or for an additional award has been made to the tribunal under section 57 and the tribunal has decided not to grant the application, the date when the applicant or appellant was notified of that decision;

(d) in any other case, the date of the award.

Conclusion

The Arbitration Act 2025 represents a targeted refinement of the Arbitration Act 1996, addressing key areas to enhance the English arbitration process. By taking onboard the needs and requirements of parties to an arbitration, these reforms aim to maintain England and Wales’ competitiveness and attractiveness as a premier destination for international arbitration.

The 2025 Act can be found here: Arbitration Act 2025