Partner Dubai
"On 1 August 2025, the Arbitration Act 2025 came into force, marking the most significant update to the UK’s arbitration framework since the Arbitration Act 1996."
On 1 August 2025, the Arbitration Act 2025 (the “2025 Act”) came into force, marking the most significant update to the UK’s arbitration framework since the Arbitration Act 1996 (the “1996 Act”). Designed to reinforce London’s status as a global arbitration hub, the reforms are particularly relevant for clients whose agreements contain an English-seated arbitration agreement.
The key reforms introduced by the 2025 Act are:
- a default governing law of the arbitration agreement where no express choice of law has been made;
- a statutory obligation on arbitrators to disclose any circumstances that may raise doubts about their impartiality;
- a streamlined procedure for jurisdictional challenges under section 67 of the 1996 Act;
- powers for tribunals to summarily dismiss claims or defences with no real prospect of success; and
- powers for emergency arbitrators to issue peremptory orders.
Key Changes
Governing Law of Arbitration Agreements
Section 1 of the 2025 Act (which amends section 6A of the 1996 Act) introduces a new default rule in relation to the law governing the arbitration agreement: if parties do not specify the governing law of the arbitration agreement, the law of the seat of arbitration will apply. This reverses the previous common law position set out in the UK Supreme Court’s decision in Enka Insaat Ve Sanayi A.S. v OOO Insurance Company Chubb [2020] UKSC 38, which held that in the absence of an express choice of law of the arbitration agreement, the governing law of the contract may apply.
Section 1 of the 2025 Act therefore strengthens the importance of the arbitral seat when assessing the applicable law in arbitration proceedings. It also provides clarity and intends to reduce costly preliminary disputes and jurisdictional challenges.
For contracts where the seat and governing law differ, parties should now explicitly state the governing law of the arbitration agreement to avoid uncertain or unintended outcomes.
Arbitrator Duties
Section 2 of the 2025 Act introduces a new section 23A to the 1996 Act by codifying an arbitrator’s duty to disclose any circumstances that might reasonably give rise to justifiable doubts as to their impartiality. This duty applies to both appointed and prospective arbitrators and builds on the common law standard established by the UK Supreme Court decision in Halliburton Company v Chubb Bermuda Insurance [2020] UKSC 48.
Importantly, parties cannot contract out of this duty. As such, if parties agree to waive the disclosure requirements, the arbitrator remains legally bound to disclose circumstances which may give rise to justifiable doubts as to their impartiality.
"If parties do not specify the governing law of the arbitration agreement, the law of the seat of arbitration will apply."
The consequences of not complying with section 23A of the 1996 Act may result in: (i) if discovered during the proceedings, an application under section 24(1)(a) of the 1996 Act to remove the arbitrator which may include, among others, a finding that the arbitrator has breached its duty to act fairly and impartially under section 33 of the 1996 Act;¹ and/or (ii) if discovered after the arbitral award has been issued, an application under section 68 of the 1996 Act to challenge the arbitral award on the ground that a serious irregularity has affected the tribunal, the proceedings, or the award itself.²
Parties should therefore conduct thorough due diligence on arbitrators’ backgrounds and avoid routine or repeated appointments of the same arbitrator to minimise the risk of partiality.
Summary Disposal Powers
Tribunals now have express authority to summarily dismiss claims or defences that have no real prospect of success. This aligns arbitration with English court procedures and enables the faster resolution of spurious claims and defences. Under section 7 of the 2025 Act (which amends section 39A of the 1996 Act), tribunals may now issue an award on a summary basis – either dismissing a claim or defence entirely or resolving a specific issue – provided that the parties have not agreed to exclude this power.
Section 7 of the 2025 Act is a welcome development for parties seeking to avoid the time and costs associated with fully contested proceedings where a party’s case is clearly without merit, or in disputes where a party has an indisputable right to recover amounts owed by its counterparty (as commonly seen in commercial lending claims).
Emergency Arbitrators
The 2025 Act introduces a new statutory framework for emergency arbitrators. This reform aligns the UK’s arbitration framework with international best practices and has a particular impact in sectors where emergency measures are often required to protect commercial interests (for instance, in the transport, financial services and construction sectors).
Section 8 of the 2025 Act introduces a new section 41A to the 1996 Act, which formally recognises the power of emergency arbitrators to decide interim relief applications before the full tribunal is constituted. Such powers extend to the issuance of peremptory orders – binding directions enforceable by courts in the same way as orders from a fully constituted tribunal.
Section 8(5) of the 2025 Act also amends section 44(4) of the 1996 Act to allow courts, in non-urgent cases, to grant orders – such as asset freezes, injunctions, or preservatory measures – with the permission of an emergency arbitrator, not just with the consent of the fully constituted tribunal.
Streamlined Jurisdictional Challenges
"The introduction of a more streamlined jurisdictional challenge aligns with the principle that the courts of the arbitral seat should act in a supervisory – not substantive – capacity."
Under section 67 of the 1996 Act, parties can challenge an arbitral award on the basis that the tribunal lacked substantive jurisdiction. This often led to full a rehearing in court, where parties could reintroduce evidence and arguments already considered by the tribunal – resulting in duplicative proceedings, increased costs and delays.
The 2025 Act significantly reforms the process, introducing under section 11 of the 2025 Act a review-based model rather than a rehearing. First, if the tribunal has already ruled on its jurisdiction and the objecting party participated in that process, any subsequent challenge under section 67 of the 1996 Act will now be treated as a review, not a full rehearing. This means the court will generally not rehear evidence or arguments already adduced as part of the arbitration proceedings. Second, parties may only introduce new grounds or evidence if they could not, with reasonable diligence, have discovered them during the arbitration. Third, the reform aims to respect the tribunal’s decision-making and reduce the risk of arbitration becoming a ‘dress rehearsal’ for litigation.
The introduction of a more streamlined jurisdictional challenge aligns with the principle that the courts of the arbitral seat should act in a supervisory – not substantive – capacity.
Should you wish to discuss how these reforms may impact your arbitration agreements or ongoing disputes, please reach out to the authors or your regular contact at WFW.
[1] Section 1(a) of the 1996 Act establishes one of its founding principles: that disputes should be resolved fairly by an impartial tribunal.
[2] Section 3(2) of the 2025 Act (which incorporates a new section 24(5A) to the 1996 Act) states that an arbitrator will not be liable to pay costs arising out of an application for removal unless the arbitrator has acted in bad faith.
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