Key Changes under the Arbitration Act 2025 Now in Force

The Arbitration Act 2025 came into force on 1 August 2025, updating the Arbitration Act 1996. These changes follow a Law Commission review intended to strengthen London’s role in international arbitration and align UK law with recent global reforms.

The substantive provisions of the Arbitration Act 2025 (the “2025 Act”) came into effect on 1 August 2025 via the Arbitration Act 2025 (Commencement) Regulations 2025. The 2025 Act amends the Arbitration Act 1996 following a Law Commission review aimed at reinforcing London’s position as a centre for international arbitration and aligning UK arbitration law with recent global reforms. You can read more about the journey to reform in our previous article here.

Key changes in the 2025 Act include:

• Governing Law of the Arbitration Agreement
  The 2025 Act introduces a new default rule: if parties have not expressly chosen the governing law of the arbitration agreement, then the law of the arbitration seat will apply. This replaces the previous common law approach from Enka v. Chubb Russia and Chubb Europe, [2020] UKSC 38, 9 October 2020, where the governing law of the main contract could be implied to govern the arbitration agreement even without an express choice. Under the new rule, the main contract’s law will no longer automatically apply unless explicitly agreed by the parties.                                                                                                                                                                                                            
• Statutory Duty of Disclosure
  Arbitrators now have a codified duty to disclose any circumstances that might reasonably raise doubts about their impartiality. This duty applies both before and after their appointment and aligns with the standard set in Halliburton v. Chubb Bermuda [2020] UKSC 48, 27 November 2020.                                                                                                                                                                              
• Extension of Arbitrator Immunity
  Arbitrators are protected from liability for costs arising from removal proceedings unless bad faith is proven. They are also shielded from liability if they resign, except where the resignation is deemed unreasonable.                                                                                                                                                                                                                                                                                               
• Summary Awards and Emergency Arbitrators
  Arbitral tribunals can now issue summary awards when a claim or defence has no real prospect of success. Parties may agree to exclude this power. The 2025 Act also recognises emergency arbitrators. They can issue urgent orders before the tribunal is fully constituted. Courts have the power to enforce these orders.                                                                                                                                                                                                                                                                                  
• Court Powers over Third Parties
  The 2025 Act confirms that courts can make orders affecting third parties in arbitration, such as preserving or gathering evidence. Third parties also have a clear right to appeal these orders without needing the court’s permission. This change brings arbitration proceedings more in line with regular court cases.                                                                                                                                                                                                                                                                                             
• Challenges to Tribunal Jurisdiction
  A party may seek a court ruling on jurisdiction only before the tribunal has ruled. After the tribunal’s ruling, court challenges are limited. New evidence or grounds are generally not allowed. Full rehearings are restricted. Courts may remit matters back to the tribunal or declare awards ineffective in certain cases.

For further information on how these changes may affect your arbitration agreements or proceedings, please contact Benjamin Knowles here: benjamin.knowles@clydeco.com