New Arbitration Act aims to keep UK at the forefront of international dispute resolution

The Arbitration Act 2025 enters into force on 1 August 2025, amending the Arbitration Act 1996, with the legislative revision focused on updating the legal framework to reflect modern arbitration practices.

The new Arbitration Act reflects the stated aims of the government to keep the UK as the global destination of choice for the legal sector, in the face of stiff competition from the likes of arbitration centres in Singapore, Hong Kong and Paris.

It also reflects wider efforts and developments across the international arbitration community aimed at ensuring greater fairness, simplicity and efficiency. These are designed to improve the user experience, the fitness for purpose of the process and the control of costs.

Other changes include strengthened arbitrator duties of disclosure and immunity, enhanced court powers in support of arbitration and the introduction of summary disposal mechanisms. 

Law of arbitration agreements

In recent years, the English court has grappled with the question of which jurisdiction's law applies to an arbitration clause contained within a broader agreement: the governing law of the broader agreement or the law of the chosen "seat" (that is, the legal place of the arbitration, whose arbitration and procedural laws will apply to the arbitration). To address this, the new Arbitration Act now clarifies that the law applicable to arbitration agreements (in the absence of an express contractual choice of the law applicable to the arbitration clause) will be the law of the seat. This should improve certainty and help avoid jurisdictional delays.

Summary disposal

The revised legislation introduces the possibility of summary disposal into arbitration, allowing tribunals to dismiss claims or defences that lack a realistic prospect of success at an early stage. This provision aims to streamline the arbitral process, reducing time and costs associated with handling meritless claims and ensuring that disputes are resolved more efficiently.

Arbitrator disclosure

Arbitrators will now have a statutory duty to disclose any circumstances that might reasonably raise doubts about their impartiality. This duty extends to disclosing such circumstances to the parties involved in the arbitration and those who might appoint them as an arbitrator. This change aims to ensure transparency and maintain trust in the arbitral process.

Arbitrator immunity

The Act strengthens the immunity of arbitrators, particularly in cases of resignation (unless unreasonable) and applications for removal (unless bad faith is involved). This enhancement is designed to protect the independence of the process, and encourage arbitrators to serve without fear of unwarranted litigation.

Enhanced court powers

The English court's support has been a significant catalyst for the growth of UK arbitration, and the 2025 Act expands the courts' powers to issue orders in support of arbitration. This includes interim relief against third parties, such as a freezing order over a party's assets, and the enforcement of emergency arbitrator orders, such as an order to prevent the dissipation of certain assets. The aim is to ensure that arbitration proceedings can be conducted smoothly and effectively, even in complex scenarios involving multiple parties.

Strengthened emergency arbitrator powers

The Act clarifies that emergency arbitrators can issue peremptory orders, such as a demand for the production of specified documents within a strict deadline, which can be enforced by the courts. This change strengthens the role of emergency arbitrators in urgent situations, providing parties with swift and enforceable relief when immediate action is required.

Limited court review of jurisdictional challenges

The new Act introduces a more limited review process for jurisdictional challenges to arbitral awards. A jurisdictional challenge in arbitration refers to a party's objection to the authority or competence of the arbitration tribunal to hear and decide the dispute. This change aims to reduce delays and costs associated with full re-hearings, enhancing arbitration as the right choice for swift and cost-effective dispute resolution.

Osborne Clarke comment

The Arbitration Act 2025 is clearly designed to reinforce London's position as a leading centre for international arbitration, and focuses on modernising what is widely regarded as the very successful regime introduced by the Arbitration Act 1996. By clarifying the rules and enhancing the efficiency of the arbitration process in line with recent trends and developments from international arbitration best practice globally, the Act aims to attract more businesses to resolve their disputes in the UK and underscores the UK's commitment to maintaining its prestigious status in the field of international arbitration.

It also acts as a reminder for parties to revisit their dispute resolution clauses to ensure that they are optimised for the modern disputes landscape and up to date with current law and practice.