The Arbitration Act 2025 Receives Royal Assent
The Arbitration Bill has successfully completed its legislative journey, receiving Royal Assent on 24 February 2025. This marks a significant milestone in modernizing the UK’s arbitration framework, reinforcing its position as a leading global dispute resolution hub.
Legislative Background
The Arbitration Act 1996 has served as the foundation for arbitration in England and Wales for nearly three decades. However, a comprehensive review by the Law Commission in 2022 identified areas for improvement, leading to seven key reform initiatives.
Initially introduced by the previous Conservative government and subsequently reintroduced by the Labour government, the Arbitration Act 2025, rather than replacing the 1996 Act, amends and modernizes key provisions, enhancing efficiency, fairness, and clarity in arbitration proceedings. These reforms now apply to any arbitration commenced on or after 24 February 2025 making it essential for parties to familiarise themselves with the changes.
Key Provisions of the Arbitration Act 2025:
1. Governing Law of the Arbitration Agreement
The Act introduces a default rule that, unless parties explicitly agree otherwise, the arbitration agreement is governed by the law of the seat of arbitration. This change aims to eliminate previous uncertainties regarding the applicable law.
2. Arbitrator Impartiality and Duty of Disclosure
The Act codifies the duty of Arbitrators (or potential arbitrators) to disclose any circumstances that might reasonably raise doubts about their impartiality before accepting an appointment.
3. Extended Arbitrator Immunity
The new Act extends the scope of arbitrator immunity. Arbitrators are now immune from liability for resignations, provided the resignation is reasonable.
Immunity is also extended to costs applications relating to their removal, unless the Arbitrator has acted in bad faith.
4. Summary Disposal
Arbitrators are now granted the express power to summarily dismiss claims or defences that lack real prospects of success, streamlining proceedings and reducing unnecessary delays.
5. Court Powers in Support of Arbitration:
The Act clarifies and, where necessary, expands the powers of courts to support arbitration proceedings, including the enforcement of interim measures and the appointment of arbitrators in certain circumstances.
6. Emergency Arbitrators
The Act has been modernised to give emergency arbitrators the same means as other arbitrators (i) to enforce their peremptory orders, and (ii) to grant parties permission to apply to court for a s44 order.
7. Challenges to Jurisdiction (Section 67)
Under Section 67, courts now have broader powers when determining challenges to an arbitral award based on jurisdictional grounds.
The challenge procedure includes amendments that limit a party’s ability to introduce new evidence at a late stage or reargue matters already considered.
Final remarks
The Arbitration Act 2025 represents a modernized, streamlined, and internationally competitive legal framework. By improving procedural clarity, strengthening arbitrator duties, and enhancing court support, the Act reinforces the UK’s attractiveness as a leading seat for arbitration. Arbitration practitioners and stakeholders should familiarize themselves with these changes to ensure compliance and optimize the benefits of the new legal framework.
For more information on the Arbitration Act 2025, get in touch with Sara Paradisi or Leonardo Carpentieri.
Key contacts
Sara Paradisi, Partner, Co-Head International Arbitration
Leonardo Carpentieri, Partner, Co-Head International Arbitration