The English Arbitration Act 2025: 8 Key Reforms and Practical Implications

Introduction to The English Arbitration Act 2025

The English Arbitration Act 2025 received Royal Assent on 24 February 2025, marking a significant step in modernizing arbitration law in England and Wales. However, as of March 2025, the main substantive provisions of the Act have not yet come into force. Only specific sections related to "Extent," "Commencement and transitional provision," and "Short title" took effect immediately on 24 February 2025. The UK government has indicated that the remaining provisions will come into effect "as soon as practicable", but no official date has been announced.

Once implemented, the 2025 Act will apply to arbitrations commenced after the enforcement date, meaning that ongoing arbitrations and related court proceedings will continue under the previous 1996 Act. These reforms aim to enhance legal clarity, streamline arbitration procedures, and reinforce England’s reputation as a global leader in dispute resolution.

Key changes include:

• Clarifying the default governing law of arbitration agreements

• Codifying arbitrators' duties of disclosure and expanding their immunity

• Introducing summary disposal powers to dismiss weak claims early

• Refining the process for jurisdictional challenges and appeal rights

• Strengthening court support, including enforcement of emergency arbitrator decisions

In this article, we will explore the major reforms introduced by the English Arbitration Act 2025, referencing specific clauses, and assess their practical implications for businesses, legal practitioners, and parties engaged in arbitration under English law.

1. Governing Law of Arbitration Agreements

Clause Reference: Section 1 of the 2025 Act inserts a new Section 6A into the Arbitration Act 1996.

The Act establishes that, in the absence of an express agreement between the parties, the law of the seat of arbitration will govern the arbitration agreement. This clarifies the previously uncertain area regarding the applicable law when it was not explicitly stated.

Practical Implications:

• Contract Drafting: Parties must be diligent in specifying the governing law of their arbitration agreements to ensure alignment with their intentions, especially in international contracts where the seat and governing law may differ.

• Legal Certainty: This provision reduces ambiguity, providing a clear default rule that enhances predictability in arbitration proceedings.

2. Arbitrators' Duty of Disclosure

Clause Reference: Section 2 of the 2025 Act introduces Section 23A to the Arbitration Act 1996.

The Act codifies the arbitrators' duty to disclose any circumstances that might reasonably give rise to justifiable doubts about their impartiality, both prior to and during the arbitration proceedings.

Practical Implications:

• Transparency: Arbitrators are now under a statutory obligation to disclose potential conflicts of interest, promoting transparency and trust in the arbitration process.

• Challenge Grounds: Parties have clearer grounds to challenge arbitrators who fail to disclose such circumstances, potentially leading to their removal.

3. Arbitrator Immunity Regarding Costs

Clause Reference: Section 3 of the 2025 Act amends Section 24 of the Arbitration Act 1996.

The Act stipulates that arbitrators are not liable for costs in removal proceedings unless their actions are shown to have been in bad faith.

Practical Implications:

• Independence: Arbitrators can perform their duties without the fear of incurring personal costs, provided they act in good faith, thereby preserving their independence and impartiality.

• Removal Applications: Parties may be more cautious in filing removal applications, knowing that arbitrators are protected from cost liabilities absent bad faith.

4. Arbitrator Immunity on Resignation

Clause Reference: Section 4 of the 2025 Act amends Section 25 of the Arbitration Act 1996.

The Act provides that an arbitrator's resignation does not attract liability unless it is shown to be unreasonable in all the circumstances.

Practical Implications:

• Resignation Considerations: Arbitrators can resign without undue concern about liability, encouraging them to step down in appropriate situations without fear of legal repercussions.

• Party Protections: Parties are protected from unreasonable resignations that could disrupt proceedings, as arbitrators may still be held liable in such cases.

5. Summary Disposal of Claims and Defenses

Clause Reference: Section 7 of the 2025 Act introduces Section 39A to the Arbitration Act 1996.

The Act empowers arbitral tribunals to make awards on a summary basis when a claim or defence has no real prospect of success, unless the parties agree otherwise.

Practical Implications:

• Efficiency: This provision allows for the swift dismissal of unmeritorious claims or defences, reducing time and costs associated with protracted proceedings.

• Strategic Planning: Parties must carefully assess the strength of their positions before initiating claims or Defences, knowing that weak arguments can be summarily dismissed.

6. Recognition of Emergency Arbitrators

Clause Reference: Section 8 of the 2025 Act introduces Section 41A to the Arbitration Act 1996.

The Act formally recognizes the role of emergency arbitrators, allowing them to grant urgent relief prior to the constitution of the full tribunal.

Practical Implications:

• Immediate Relief: Parties can obtain urgent interim measures more swiftly, addressing immediate concerns without waiting for the full tribunal's formation.

• Enforceability: Orders made by emergency arbitrators are enforceable under the Act, providing assurance that urgent relief will be effective.

7. Court Powers in Support of Arbitration Involving Third Parties

Clause Reference: Section 9 of the 2025 Act amends Section 44 of the Arbitration Act 1996.

The Act clarifies that courts have the power to make orders in support of arbitral proceedings, including against third parties, unless otherwise agreed by the parties.

Practical Implications:

• Broadened Scope: Courts can issue orders to preserve evidence or compel witness testimony from third parties, enhancing the effectiveness of arbitration.

• Party Autonomy: Parties retain the ability to limit such court powers through their arbitration agreements, maintaining control over the arbitration process.

8. Challenges to Jurisdictional Awards

Clause Reference: Section 11 of the 2025 Act amends Section 67 of the Arbitration Act 1996.

The Act restricts parties from introducing new grounds or evidence in court challenges to a tribunal's jurisdictional ruling that were not raised during the arbitration, unless justified by exceptional circumstances.

Practical Implications:

• Comprehensive Presentation: Parties must thoroughly present all jurisdictional objections during arbitration, as opportunities to introduce new arguments or evidence

Practical Considerations for Businesses and Legal Practitioners

1. Reviewing Existing Contracts

• Companies should review their existing arbitration agreements to determine whether they align with the new law.

• If an arbitration clause references the 1996 Act, it should be assessed to see if the new provisions apply.

• 
  

2. Drafting Future Arbitration Agreements

• Contracts should now explicitly specify the governing law of the arbitration agreement if it differs from the seat of arbitration.

• Dispute resolution clauses should be updated to reflect the summary disposal provisions, ensuring alignment with the new framework.

  
  

3. Handling Summary Disposal Provisions

• Legal teams should be prepared to quickly present strong arguments to avoid summary dismissal.

• Businesses should consider including provisions in arbitration agreements that clarify whether summary disposal procedures will be used.

4. Preparing for Jurisdictional Challenges

• Companies engaged in arbitration must raise all jurisdictional arguments early, as courts will limit fresh challenges.

• Law firms should train arbitration practitioners to effectively present jurisdictional objections at the tribunal stage.

5. Managing Arbitrator Appointments

• Businesses should vet arbitrators carefully to ensure they comply with the new disclosure obligations.

• Firms should maintain records of arbitrators’ disclosures to support any potential future challenges.

6. Strengthening Emergency Arbitration Strategies

• Given the enhanced enforceability of emergency arbitrator decisions, parties should consider using emergency arbitration mechanisms for urgent disputes.

• Legal teams must be familiar with court procedures for enforcing emergency awards.

Conclusion

The English Arbitration Act 2025 represents an evolution rather than a revolution in arbitration law. The changes focus on efficiency, clarity, and finality, reinforcing England’s reputation as a leading arbitration hub. Businesses and legal practitioners must proactively review and update arbitration agreements, adapt dispute resolution strategies, and ensure compliance with the new framework.

These reforms will likely reduce frivolous claims, streamline arbitration proceedings, and increase confidence in the enforceability of arbitral awards. The enhanced role of courts, coupled with greater procedural clarity, ensures that arbitration remains a reliable and efficient dispute resolution mechanism for global commerce.

FAQs

1. Does the English Arbitration Act 2025 apply to existing contracts?

Existing contracts referencing the 1996 Act should be reviewed, as some may automatically incorporate successor legislation, while others may not.

2. How does the new default governing law rule affect arbitration agreements?

If the arbitration agreement does not specify a governing law, the law of the seat will now apply by default.

3. What impact does the summary disposal provision have on arbitration?

Arbitrators can dismiss weak claims early, saving time and costs by preventing meritless disputes from proceeding.

4. Can jurisdictional challenges still be brought in court?

Yes, but new evidence or arguments are restricted, meaning all jurisdictional objections should be raised during arbitration.

5. How does the Act strengthen emergency arbitration?

The Act ensures that English courts can enforce emergency arbitrator decisions, making interim relief mechanisms more effective.

Avinder Laroya is a Senior Consultant Solicitor, Mediator and Arbitrator and conflict coach, she is an expert in International Dispute Resolution. If you enjoyed this article you can subscribe to my newsletter.