Arbitration Act 2025

The Arbitration Act 2025 (the “2025 Act”) is the first major update to the law of arbitration in England, Wales and Northern Ireland since the Arbitration Act 1996 (the “1996 Act”).

The 2025 Act received Royal Assent on 24 February 2025, but its substantive amendments to the 1996 Act came into force on 1 August 2025.

The key changes are discussed below.

Law applicable to an arbitration agreement

1. The most important reform introduced by the 2025 Act concerns the choice of law applicable to an arbitration agreement.

2. In cross-border contracts, different systems of law often govern different aspects of the arbitral process. In broad terms:

1. The law which applies to an arbitration agreement governs issues relating to its scope and validity.
2. The law of the seat of arbitration governs the procedure of the arbitration and whether awards can be challenged.
3. The law of the underlying contract governs the substantive issues referred to arbitration.

3. Before the 2025 Act came into force, the principles for determining the law applicable to an arbitration agreement were found in the common law. The test developed by the courts, notably by a majority of the Supreme Court in Enka v Chubb,[1] provides that:

1. The law applicable to the arbitration agreement will be: (i) the law expressly or impliedly chosen by the parties or (ii) in the absence of such choice, the system of law “most closely connected” to the arbitration agreement.[2]
2. In determining whether the parties have made a choice of law, the court should construe the arbitration agreement and the contract containing it by applying rules of contractual interpretation of English law as the law of the forum.[3]
3. Where the parties have not specified the law applicable to the arbitration agreement, but they have chosen the law to govern the contract containing the arbitration agreement, this choice will generally apply to the arbitration agreement.[4]
4. Where the parties have made no choice of law to govern the arbitration agreement, either specifically or by choosing the law which is to govern the contract as a whole, the court must determine the law with which the arbitration agreement is most closely connected. In general, the arbitration agreement will be most closely connected with the law of the seat of arbitration.[5]

4. This approach was criticised, including in the Law Commission’s 2023 report on recommended reforms to the 1996 Act.

5. Section 1(2) of the 2025 Act provides welcome clarity by establishing that the law applicable to an arbitration agreement is:

1. the law that the parties expressly agree applies to the arbitration agreement; or
2. where no such agreement is made, the law of the seat of the arbitration in question.

6. This change is significant for parties entering contracts containing arbitration agreements, particularly where they have chosen a foreign seat of arbitration.

7. If, for example, the parties choose English law as the governing law of the underlying contract, Paris as the seat of arbitration and make no express choice of law governing the arbitration agreement:

1. the underlying contract will be governed by English law; but
2. the arbitration agreement will be governed by French law.

8. To avoid any unintended consequences, the parties should specify in clear terms:

1. the law which governs the underlying contract;
2. the seat of arbitration; and
3. the law which governs the arbitration agreement.

Arbitrator’s duty of disclosure

9. Arbitrators already owe a common law duty to disclose any circumstances that might reasonably give rise to justifiable doubts as to their impartiality in relation to proceedings.[6]

10. This duty has been codified in section 2(1) of the 2025 Act.

Immunity of arbitrators

11. The 2025 Act strengthens the immunity enjoyed by arbitrators by narrowing the situations in which it could previously be lost under section 29 of the 1996 Act.

1. Section 3(2) of the 2025 Act provides that the court may not order an arbitrator to pay costs in an application for their removal unless any act or omission of the arbitrator in connection with the proceedings is shown to have been in bad faith.
2. Section 4(2) of the 2025 Act provides that an arbitrator will not be liable for the costs of their resignation, unless the resignation is proved, in all the circumstances, to have been unreasonable.

Jurisdiction of the tribunal

12. Section 5 of the 2025 Act introduces a prohibition on applications under section 32 of the 1996 Act in respect of a question on which the tribunal has already ruled. 

13. Section 6 of the 2025 Act amends section 61 of the 1996 Act to clarify that a tribunal can make a costs award even if the tribunal has ruled, or the court has held, that the tribunal has no substantive jurisdiction.

Summary disposal of disputes which lack merit

14. Before the 2025 Act came into force, there was a degree of uncertainty about whether arbitral tribunals have the power to determine claims on a summary basis.

15. Section 7 of the 2025 Act confirms that unless the parties agree otherwise, tribunals may make an award on a summary basis in relation to a claim, or a particular issue arising in a claim, if the tribunal considers that:

1. a party has no real prospect of succeeding on the claim or issue, or
2. a party has no real prospect of succeeding in the defence of the claim or issue.

Emergency arbitrators

16. Section 8 of the 2025 Act empowers emergency arbitrators to make peremptory orders (unless the parties agree otherwise) and parties to apply to the court for orders in support of such peremptory orders.

17. This change removes uncertainty about the enforceability of orders made by emergency arbitrators.

Court powers in support of arbitration in respect of third parties

18. Section 9 of the 2025 Act confirms that unless otherwise agreed by the parties, the court has the same power to order relief against third parties in support of arbitration as it does in court litigation.

19. This change clarifies long-standing uncertainty about the court’s power to give relief against third parties in support of arbitration.

Procedure to challenge an award

20. The 2025 Act streamlines the process for jurisdictional challenges under section 67 of the 1996 Act.

21. Before the 2025 Act came into force, a section 67 challenge involved a de novo review by the court, potentially including new arguments and evidence not heard by the tribunal.

22. Under section 11 of the 2025 Act:

1. A ground for the objection that was not raised before the arbitral tribunal must not be raised before the court unless the applicant shows that, at the time the applicant took part in the proceedings, the applicant did not know and could not with reasonable diligence have discovered the ground.
2. Evidence that was not put before the tribunal must not be considered by the court unless the applicant shows that, at the time the applicant took part in the proceedings, the applicant could not with reasonable diligence have put the evidence before the tribunal.
3. Evidence that was heard by the tribunal must not be re-heard by the court.

23 . Section 10 of the 2025 Act empowers the court to remit an award to the tribunal for reconsideration upon a successful challenge under section 67 of the 1996 Act. Before the 2025 Act came into force, the options available to the court were to confirm, vary or set aside the award in whole or in part.

24. Section 12 of the 2025 Act clarifies when time starts to run for the parties to challenge an award under sections 67, 68 and 69 of the 1996 Act.

Appeals from High Court decisions

25. Section 13 of the 2025 Act clarifies the right of appeal to the Court of Appeal from High Court decisions under Part 1 of the 1996 Act.

Miscellaneous minor amendments

26. Section 14 of the 2025 Act simplifies the requirements for the court to consider applications under section 32 of the 1996 Act (determination by court of a preliminary point of jurisdiction) and section 45 (determination by court of a preliminary point of law). Either the agreement of the parties or the permission of the tribunal is required.

27. Lastly, section 15 of the 2025 Act repeals sections 85 to 88 relating to domestic arbitration agreements, which were never brought into force and for which there has been no demand.

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[1] Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38

[2] Enka v Chubb, [27].

[3] Enka v Chubb, [29]-[34].

[4] Enka v Chubb, [43]-[52].

[5] Enka v Chubb, [118]-[119].

[6] Halliburton Co v Chubb Bermuda Insurance Ltd [2020] UKSC 48.