The English Arbitration Act 2025 – Key Changes

The new English Arbitration Act 2025 (AA25) officially came into force on the 1 August 2025¹ after receiving Royal Assent (i.e. being passed by Parliament) on 24 February 2025. In this article we look beyond the headline, analyse the changes, and discuss the impact they will have on those involved in arbitration.

Background

The changes brought in by the AA25 follow the Law Commission’s 2022-2023 Review² and aim to modernise the 1996 Arbitration Act (AA96) and address a number of issues that parties and courts have grappled with in recent years. However, it is important to note that the AA25 is not a significant departure from the long-established principles in the AA96. Instead, the changes provide clarity; confirm England’s pro-arbitration stance; and will bolster London’s reputation as a premier arbitration seat. The AA25 is also expected to bring additional business to the UK legal services sector, which in 2024 was valued at £42.6 billion³.

Summary of Key Changes:

The key amendments the AA25 makes to AA96 are as follows:

1. Clarification of the governing law applicable to arbitration agreements.
2. Providing tribunals with summary judgment/early dismissal style powers.
3. A wider and clearer duty on arbitrators to disclose circumstances they may raise doubts on their impartiality.
4. Increased court powers to support arbitration including emergency arbitrations and obtaining evidence from third parties.
5. Greater protection against liability for arbitrators when resigning or being removed.
6. Limiting Section 67 Challenges.

Key Changes in Detail:

1. Clarity on the Governing Law of an Arbitration Agreement

The issue of governing law of an arbitration agreement arises when the applicable law of the contract differs from the seat of arbitration (e.g., Swiss law contract, English seat of arbitration), or is silent on that choice of governing law.

Following the decision of the UK Supreme Court in Enka v Chubb [2020] UKSC 38, the issue was widely debated, and it was universally agreed that moving away from common law principles to a more codified regime, offering more certainty, would be helpful.

A new section 6A in the AA25 introduces a default position, which will end uncertainty and align English arbitration legislation with many Institutional Rules, e.g. the LCIA’s rules. Section 6A now provides that, in the absence of an express agreement by the parties, and by default, the governing law of the arbitration agreement will be the law of the seat of the arbitration.

Moreover, section 6A confirms that where the governing law is agreed in the underlying contract, this will not of itself result in that law applying to the arbitration agreement.

This amendment brings clarity, and the consistent rule makes commercial sense, which will be welcomed by many.

2. Summary Disposal

The AA96 does not contain any express provision for summary disposal in arbitration. The changes brought in by the new section 39A in the AA25 give arbitrators a default power of summary or early disposal, via an application by a party, and subject to a test similar to that in the English Civil Procedural Rules⁴, namely that of there being “no real prospect of success” on the relevant issue and apply equally to the claim and the defence.

This non-mandatory reform could help resolve disputes more efficiently both in terms of costs and time, and reflects the approach taken by a number of Institutional Rules. The change also helpfully aligns arbitration with the position in English litigation.

3. Arbitrators’ Statutory Duty of Disclosure

The AA96 provides that arbitrators must be impartial (section 33). Under English common law, arbitrators have a continuing duty to disclose “any relevant circumstances”, which may reasonably give rise to justifiable doubts as to their impartiality, as established by the Supreme Court in Halliburton v Chubb [2020] UKSC 48.

The AA25 codifies this duty, and in addition, the new statutory duty of disclosure is objective i.e. based on what the arbitrator ought reasonably to be aware of (rather than, subjective i.e. based on actual knowledge).

Importantly, the new provision also provides that the duty will commence from the time the arbitrator is approached to act.

It is hoped that these changes will encourage early disclosure and help reduce the number of arbitrator challenges, thereby saving all parties time and money.

4. Empowering Courts to Support Arbitration

In a change that will be widely welcomed by parties and practitioners, the courts’ supportive powers of arbitration have been further enhanced by an amendment to Section 44 AA96, and which provides that the court can now make orders “in relation to a party or any other person” i.e. to third parties.

5. Enhanced Arbitrator Immunity

The AA25 amends section 24 AA96 and provides that resignation by an arbitrator will not result in liability unless the resignation was unreasonable. Further that an arbitrator will not be required to pay the costs of proceedings to remove them unless their refusal was unreasonable.

These reforms will support and encourage those wishing to act as arbitrators.

6. Limiting Scope for Challenges to Awards

Section 67 of the AA96 enables a party to challenge the tribunal’s jurisdiction to hear the arbitration (or part of it) during the arbitration. If they are unsuccessful, they can later challenge the award in court claiming that the tribunal lacked jurisdiction.

The changes brought in by the AA25 Act provide that a challenging party can only make new objections, or present new evidence relating to jurisdiction, if it can demonstrate that these could not have been raised on the earlier challenge for example, they are facts that subsequently came to light.

In a departure from the Supreme Court judgment in Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46, the AA25 provides that there should be no rehearing of oral evidence, unless the court determines it necessary in the interests of justice. This provision is aimed at preventing tactical appeals intended to cause delays by effectively holding a re-hearing of the issues.

Conclusion

The amendments introduced by AA25 are the result of extensive debate, consultation, and submissions by those involved in the arbitration process, including HFW. The AA25 has built on the AA96, preserving the strengths of the original legislation whilst addressing practical needs that have developed over the last three decades.

By facilitating the evolving needs of business and ensuring smoother resolution of disputes by arbitration, the AA25 will help reinforce England’s position as a leading forum for commercial arbitration and wider Disputes.

It is worth noting that the changes will not apply retrospectively. Arbitrations commenced prior to 1 August 2025 will continue to be governed by AA96.

Danica Douglas, London Disputes Knowledge Paralegal, assisted in the preparation of this briefing.

Footnotes:

1. Arbitration Act 2025
2. Discussed in our previous article – Reform of the 1996 English Arbitration Act – The Six Key Proposed Amendments – HFW
3. Professional and Business Services, Sector Plan 
4. CPR Part 24