Every year, over 5,000 domestic and international arbitrations take place in England and Wales, generating more than £2.5 billion annually in fees to the UK economy[1]. For more than 25 years, these arbitrations have been governed by the Arbitration Act 1996, a statute that codified and consolidated English arbitration law.
In recognition of the need to keep pace with developments at other important arbitral seats (for example Singapore, Hong Kong, Sweden and Dubai) which have modernised their arbitration laws, in 2022 the UK government requested that the Law Commission review the 1996 Act. Following a comprehensive consultation process, the Arbitration Act 2025 ('the Act') received royal assent on 24 February 2025[2].
The Act seeks to enhance efficiency and maintain England and Wales as a leader in arbitration enabling individuals and businesses to resolve legal disputes with greater flexibility and confidentiality than traditional court proceedings. Below we consider five key amendments introduced by the Act: (1) the law applicable to the arbitration agreement, (2) arbitrators' duty of disclosure, (3) awards on a summary basis, (4) jurisdictional challenges and (5) immunity of arbitrators.
Law applicable to the arbitration agreement
Even though an arbitration agreement forms an integral part of a contract, it is not automatically governed by the same law that applies to the substantive terms of that contract. The Act now provides clarity in Section 6A as to which law will govern the arbitration agreement if the parties to an arbitration have not expressly agreed on the applicable law in their contract.
The Act determines that, in the absence of an express choice, the law applicable to the arbitration agreement will be the law of the arbitral seat chosen by the parties. Thus, the choice of the arbitral seat is an important one as, if the contract is otherwise silent, it also designates the legal jurisdiction the parties have chosen in their arbitration agreement or underlying contract. The seat can be anywhere in the world, but popular "seats" include London, Paris, Stockholm and Vienna. So, if the parties have chosen London as seat, English law will govern any legal issues in relation to the (often the construction of) arbitration agreement.
Arbitrators' Duty of disclosure
Section 23A of the Act codifies an arbitrator's mandatory duty to disclose any relevant circumstances that might give rise to justifiable doubts as to their impartiality in relation to the proceedings before accepting an appointment as arbitrator. The Act now reflects the precedent set in Halliburton v Chubb[3] which establishes that an arbitrator has a duty to disclose their conflicting appointments. This duty is ongoing, which means that an arbitrator has to make such disclosures during a pending arbitration if circumstances have changed since their appointment.
The Commission recommended that the duty of disclosure in relation to impartiality does not extend to independence. The decision was based on the understanding that absolute independence for arbitrators is unattainable; what truly matters is that arbitrators are transparent about any relevant connections to the parties and/or their lawyers in safeguarding their impartiality. Prioritising impartiality over independence is a pragmatic approach in a system where it is common for counsel from the same chambers to appear on opposing sides or serve as arbitrators or judges. Although the consequences of failure to disclose are not set out in statute, caselaw has indicated that arbitral awards may be set aside as a result of this failure. Therefore, it is paramount for arbitrators to make the relevant disclosures as early as possible in the process.
Award on a summary basis
Section 39A of the Act allows the arbitral tribunal to make an award on a summary basis, subject to an application made by a party to the proceedings. If a party applies for early determination and can demonstrate that the case before the arbitral tribunal has 'no real prospects of success' (the test adopted by the English Court in the context of CPR 24 applications), the arbitral tribunal has the power to render an award on a summary basis.
Summary disposal can be seen as an appealing mechanism, as it encourages the streamlining of disputes and helps avoid unnecessary costs associated with unmeritorious claims. A key concern to this reform is that it may disproportionately favour well-resourced firms representing influential clients, who are less likely to be deterred by the risks of early dismissal. In contrast, smaller or less financially equipped parties may perceive the process as vulnerable to misuse – potentially allowing strong opponents to prematurely shut down legitimate claims without thorough examination.
Jurisdictional challenges
The Act has implemented a new regime for jurisdictional challenges, which were primarily made under section 67 of the 1996 Act. The Act now limits the way parties, who have had points determined by a tribunal, can have those points reconsidered by a court on appeal on the basis the tribunal lacked jurisdiction.
A full re-hearing would have allowed parties to have the entire case heard for a second time in front of a court, including both factual and legal issues. Proponents of this argued that because the tribunal lacked jurisdiction in the first place, any award by the tribunal was null and void. There was therefore no disadvantage to having everything reheard. Opponents of re-hearings argued that they drove up costs and potentially undermined the arbitral process.
In the event, the Act now sets limits to how parties can challenge an award on jurisdictional grounds. These seek to restrict new evidence and new grounds, as well as evidence and grounds already considered by the tribunal, from being reconsidered by the court. That is unless the new evidence or grounds were not known by, or could not, with reasonable diligence, have been discovered by, the applicant at the time of the arbitration.
Immunity of arbitrators
Section 3 of the Act has broadened the immunity afforded to arbitrators so that they incur no liability for resignation, unless resignation is proved to be unreasonable, and the arbitrator will bear no costs for an application of removal, unless they have acted in bad faith.
These reforms uphold the integrity and finality of the arbitral process. The reform will also safeguard the principle that arbitrators are to act independently and sustain impartiality without any costs or liability consequences.
Conclusion
The Act has introduced welcome changes on issues that needed clarity, but does not radically change the arbitration landscape in this jurisdiction.
By codifying previously ambiguous areas of arbitral practice—such as the power to summarily dispose of claims and the framework for jurisdictional challenges—the Act provides greater clarity and predictability for parties. These changes not only streamline proceedings but also reduce the scope for procedural disputes, thereby saving time and costs. Furthermore, the codification of arbitrators’ duties and immunities reflect a commitment to strengthening the integrity and responsiveness of the arbitral system. In doing so, the Act reinforces the UK’s position as a leading global hub for arbitration and ensures that its legal framework remains fit for purpose in a rapidly evolving commercial landscape.
[1] Arbitration Bill: factsheet - GOV.UK
[2] Arbitration Act 2025 - Parliamentary Bills - UK Parliament
[3] Halliburton Company (Appellant) v Chubb Bermuda Insurance Ltd [2020] UKSC 48
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