For nearly three decades, the Arbitration Act 1996 (AA 1996) has served as the foundation for arbitration in England, Wales, and Northern Ireland. However, with major international arbitration hubs such as Singapore, Switzerland, and Germany modernising their arbitration laws, there has been growing pressure for the UK to update its legislative framework to maintain its competitive edge.
Recognising this need, the UK Government tasked the Law Commission in 2021 with reviewing the AA 1996 to ensure that it remains “state of the art” for both domestic and international arbitration. Following an extensive consultation process, the Arbitration Act 2025 (AA 2025) has now been enacted, receiving Royal Assent on 24 February 2025. While the exact date of implementation is yet to be confirmed, the Government has indicated that it will take effect “as soon as practicable.”
Rather than completely replacing the existing legislation, the AA 2025 introduces targeted reforms that refine and enhance the existing legal framework. As Lord Ponsonby aptly described, these changes represent an “evolution, not a revolution.” However, these amendments introduce significant improvements that will strengthen London’s position as a leading international arbitration hub.
This article examines the key reforms introduced by the AA 2025 and their practical implications for arbitration in the UK.
1. Clarification on the Governing Law of Arbitration Agreements
One of the most significant reforms introduced by the AA 2025 concerns the determination of the governing law of arbitration agreements. The AA 1996 was silent on this issue, leading to uncertainty and reliance on common law principles.
Previously, the Supreme Court’s decision in Enka v Chubb [2020] UKSC 38 established a controversial approach whereby, if an arbitration agreement was contained within a contract governed by foreign law, the arbitration agreement itself would also be presumed to be governed by that foreign law unless there was an express choice of law for the arbitration agreement. This created uncertainty and inconsistency, particularly where parties had chosen London as the arbitral seat but were subject to a foreign governing law for the main contract.
The AA 2025 introduces a clear statutory rule, stating that:
• If the parties expressly choose a governing law for the arbitration agreement, that choice prevails.
• If no express choice is made, the law of the arbitral seat applies.
• An express choice of governing law for the main contract does not automatically extend to the arbitration agreement.
This reform eliminates the uncertainty created by Enka v Chubb and ensures that parties selecting London as their arbitral seat can benefit from the full protection of English arbitration law, even if the underlying contract is governed by foreign law. This amendment is expected to enhance London’s attractiveness as a leading arbitration centre.
2. Strengthening Arbitrators’ Powers and Immunity
The AA 2025 introduces key provisions to reinforce arbitrators’ authority and safeguard their independence, ensuring that arbitrators can issue decisive rulings without fear of undue litigation.
a) Express Power for Summary Dismissal of Weak Claims
A longstanding area of uncertainty in UK arbitration law was whether tribunals had the inherent power to summarily dismiss claims or defences that had no real prospect of success. The AA 2025 now expressly confirms that arbitrators have this power, provided that:
• A party applies for summary dismissal on notice to the other parties.
• The tribunal allows the parties a reasonable opportunity to make representations.
• The claim or defence has “no real prospect of success” – mirroring the test used in UK court proceedings.
This provision brings greater efficiency to arbitration proceedings, allowing tribunals to dispose of meritless claims at an early stage, reducing time and costs. It also gives London an advantage over arbitration hubs like France and New York, where summary dismissal powers are not expressly provided for in legislation.
b) Expanded Arbitrator Immunity
The AA 1996 already provided arbitrators with immunity from liability, except in cases of bad faith. However, this immunity had notable gaps, particularly where an arbitrator:
• Resigned from a case, exposing them to potential legal action.
• Was the subject of an unsuccessful removal application, where they could be liable for costs.
The AA 2025 strengthens arbitrator immunity, providing that:
• Resignation alone does not result in liability, unless it is deemed unreasonable.
• Arbitrators cannot be ordered to pay the costs of a removal application, unless bad faith is proven.
These changes are expected to increase arbitrator confidence, ensuring that they can make impartial and decisive rulings without the fear of retaliatory litigation.
3. Enforcement of Emergency Arbitrator Decisions
Another significant gap in the AA 1996 was the lack of statutory recognition for emergency arbitrators. In recent years, emergency arbitration has become an essential tool in international disputes, allowing parties to obtain urgent interim relief before a full tribunal is constituted.
However, the AA 1996 did not provide clarity on whether emergency arbitrators’ orders could be enforced under English law, leading to uncertainty.
The AA 2025 now explicitly empowers emergency arbitrators to:
• Issue peremptory orders (binding interim measures with a set compliance timeframe).
• Apply to UK courts to enforce peremptory orders.
With emergency arbitration increasingly used in international disputes, this reform aligns UK law with global best practices and enhances London’s appeal as a seat for urgent interim relief in arbitration.
4. Restricting Jurisdictional Challenges Under Section 67
The AA 2025 introduces new restrictions on jurisdictional challenges under Section 67 of the AA 1996, which allows parties to challenge an arbitral tribunal’s jurisdiction in UK courts.
Under the previous regime, Section 67 allowed for a full rehearing of the jurisdictional issues, enabling parties to introduce new evidence and arguments not previously raised before the tribunal. This created a risk of delay and strategic misuse of jurisdictional challenges.
The AA 2025 now limits the scope of Section 67 challenges by:
• Preventing new arguments or evidence from being introduced unless the applicant could not reasonably have discovered them during the arbitration.
• Prohibiting the court from rehearing evidence already presented to the tribunal.
• Allowing exceptions only in the “interests of justice”, at the court’s discretion.
These reforms streamline the challenge process, discouraging parties from making frivolous jurisdictional objections and reducing costs and delays in arbitration proceedings.
5. Codifying Arbitrators’ Duty of Disclosure
The AA 2025 formally codifies an arbitrator’s duty to disclose potential conflicts of interest, as established in Halliburton v Chubb [2020] UKSC 48. It states that:
• Arbitrators must disclose any circumstances that could reasonably give rise to doubts about their impartiality.
• This duty applies both before and during the arbitration.
While this amendment mainly reinforces existing best practices, it ensures that UK arbitration law aligns with international standards, such as the UNCITRAL Model Law and ICC Rules.
Conclusion: A Stronger, More Competitive UK Arbitration Framework
The AA 2025 represents a significant evolution of UK arbitration law, addressing longstanding uncertainties and enhancing efficiency, fairness, and enforcement mechanisms. Key reforms, such as the clarification of governing law, arbitrator immunity, and emergency arbitration enforcement, reinforce London’s status as a premier arbitration hub.
With these modernised provisions, the UK is well-positioned to remain a global leader in international arbitration for years to come.
Recognising this need, the UK Government tasked the Law Commission in 2021 with reviewing the AA 1996 to ensure that it remains “state of the art” for both domestic and international arbitration. Following an extensive consultation process, the Arbitration Act 2025 (AA 2025) has now been enacted, receiving Royal Assent on 24 February 2025. While the exact date of implementation is yet to be confirmed, the Government has indicated that it will take effect “as soon as practicable.”
Rather than completely replacing the existing legislation, the AA 2025 introduces targeted reforms that refine and enhance the existing legal framework. As Lord Ponsonby aptly described, these changes represent an “evolution, not a revolution.” However, these amendments introduce significant improvements that will strengthen London’s position as a leading international arbitration hub.
This article examines the key reforms introduced by the AA 2025 and their practical implications for arbitration in the UK.
1. Clarification on the Governing Law of Arbitration Agreements
One of the most significant reforms introduced by the AA 2025 concerns the determination of the governing law of arbitration agreements. The AA 1996 was silent on this issue, leading to uncertainty and reliance on common law principles.
Previously, the Supreme Court’s decision in Enka v Chubb [2020] UKSC 38 established a controversial approach whereby, if an arbitration agreement was contained within a contract governed by foreign law, the arbitration agreement itself would also be presumed to be governed by that foreign law unless there was an express choice of law for the arbitration agreement. This created uncertainty and inconsistency, particularly where parties had chosen London as the arbitral seat but were subject to a foreign governing law for the main contract.
The AA 2025 introduces a clear statutory rule, stating that:
• If the parties expressly choose a governing law for the arbitration agreement, that choice prevails.
• If no express choice is made, the law of the arbitral seat applies.
• An express choice of governing law for the main contract does not automatically extend to the arbitration agreement.
This reform eliminates the uncertainty created by Enka v Chubb and ensures that parties selecting London as their arbitral seat can benefit from the full protection of English arbitration law, even if the underlying contract is governed by foreign law. This amendment is expected to enhance London’s attractiveness as a leading arbitration centre.
2. Strengthening Arbitrators’ Powers and Immunity
The AA 2025 introduces key provisions to reinforce arbitrators’ authority and safeguard their independence, ensuring that arbitrators can issue decisive rulings without fear of undue litigation.
a) Express Power for Summary Dismissal of Weak Claims
A longstanding area of uncertainty in UK arbitration law was whether tribunals had the inherent power to summarily dismiss claims or defences that had no real prospect of success. The AA 2025 now expressly confirms that arbitrators have this power, provided that:
• A party applies for summary dismissal on notice to the other parties.
• The tribunal allows the parties a reasonable opportunity to make representations.
• The claim or defence has “no real prospect of success” – mirroring the test used in UK court proceedings.
This provision brings greater efficiency to arbitration proceedings, allowing tribunals to dispose of meritless claims at an early stage, reducing time and costs. It also gives London an advantage over arbitration hubs like France and New York, where summary dismissal powers are not expressly provided for in legislation.
b) Expanded Arbitrator Immunity
The AA 1996 already provided arbitrators with immunity from liability, except in cases of bad faith. However, this immunity had notable gaps, particularly where an arbitrator:
• Resigned from a case, exposing them to potential legal action.
• Was the subject of an unsuccessful removal application, where they could be liable for costs.
The AA 2025 strengthens arbitrator immunity, providing that:
• Resignation alone does not result in liability, unless it is deemed unreasonable.
• Arbitrators cannot be ordered to pay the costs of a removal application, unless bad faith is proven.
These changes are expected to increase arbitrator confidence, ensuring that they can make impartial and decisive rulings without the fear of retaliatory litigation.
3. Enforcement of Emergency Arbitrator Decisions
Another significant gap in the AA 1996 was the lack of statutory recognition for emergency arbitrators. In recent years, emergency arbitration has become an essential tool in international disputes, allowing parties to obtain urgent interim relief before a full tribunal is constituted.
However, the AA 1996 did not provide clarity on whether emergency arbitrators’ orders could be enforced under English law, leading to uncertainty.
The AA 2025 now explicitly empowers emergency arbitrators to:
• Issue peremptory orders (binding interim measures with a set compliance timeframe).
• Apply to UK courts to enforce peremptory orders.
With emergency arbitration increasingly used in international disputes, this reform aligns UK law with global best practices and enhances London’s appeal as a seat for urgent interim relief in arbitration.
4. Restricting Jurisdictional Challenges Under Section 67
The AA 2025 introduces new restrictions on jurisdictional challenges under Section 67 of the AA 1996, which allows parties to challenge an arbitral tribunal’s jurisdiction in UK courts.
Under the previous regime, Section 67 allowed for a full rehearing of the jurisdictional issues, enabling parties to introduce new evidence and arguments not previously raised before the tribunal. This created a risk of delay and strategic misuse of jurisdictional challenges.
The AA 2025 now limits the scope of Section 67 challenges by:
• Preventing new arguments or evidence from being introduced unless the applicant could not reasonably have discovered them during the arbitration.
• Prohibiting the court from rehearing evidence already presented to the tribunal.
• Allowing exceptions only in the “interests of justice”, at the court’s discretion.
These reforms streamline the challenge process, discouraging parties from making frivolous jurisdictional objections and reducing costs and delays in arbitration proceedings.
5. Codifying Arbitrators’ Duty of Disclosure
The AA 2025 formally codifies an arbitrator’s duty to disclose potential conflicts of interest, as established in Halliburton v Chubb [2020] UKSC 48. It states that:
• Arbitrators must disclose any circumstances that could reasonably give rise to doubts about their impartiality.
• This duty applies both before and during the arbitration.
While this amendment mainly reinforces existing best practices, it ensures that UK arbitration law aligns with international standards, such as the UNCITRAL Model Law and ICC Rules.
Conclusion: A Stronger, More Competitive UK Arbitration Framework
The AA 2025 represents a significant evolution of UK arbitration law, addressing longstanding uncertainties and enhancing efficiency, fairness, and enforcement mechanisms. Key reforms, such as the clarification of governing law, arbitrator immunity, and emergency arbitration enforcement, reinforce London’s status as a premier arbitration hub.
With these modernised provisions, the UK is well-positioned to remain a global leader in international arbitration for years to come.