The Arbitration Act 2025 ("AA 2025") received Royal Assent on 24 February 2025, and came into force on 1 August 2025.  The AA 2025 adapts certain provisions of the Arbitration Act 1996, which has governed arbitration in England and Wales for nearly three decades. What will the changes mean in practice? Caroline Stewart, Senior Associate, explains.

Background to the Reforms

While the Arbitration Act 1996 remains largely effective, the amendments have been made as a result of the Law Commission review, which was conducted 2021 to ensure the UK maintains its reputation as a leading global destination for arbitration. The resulting reforms aim to modernise and enhance the efficiency of arbitration proceedings while reinforcing principles of fairness and procedural clarity.

We have set out below an overview of the key changes.

Key Changes Introduced by the Act 2025

1. Summary Awards

One of the most notable changes in the AA 2025 is the introduction of an express power for arbitrators to make an award on a summary basis in relation to a claim or issue where a party has "no real prospect of succeeding" in relation to that claim or issue, and so long as the tribunal has afforded the parties a reasonable opportunity to make representations to the tribunal.

This is analogous to the procedure for summary judgment in English Court proceedings. In theory, it should expedite some procedures by allowing for the dismissal of meritless claims or time-wasting defences at an early stage.

How precisely the process will 'work' will depend on what (if any) rules may apply to the arbitration in question, and the willingness of arbitration tribunals to embrace their new power. Unless the rules governing an arbitration make particular provision for summary awards, it will be the tribunal who will determine at what stage in the proceedings they will consider an application for a summary award, and what they will consider to be 'reasonable representations' from the parties before doing so.

However, this provision is not mandatory, meaning parties can contractually exclude its application. Businesses and legal practitioners may wish to consider whether to incorporate or exclude this provision during pre-contractual negotiations.

2. Court Orders in Support of Arbitration Proceedings

The AA 2025 clarifies and expands the powers of courts to support arbitration proceedings. Courts can now issue orders against third parties, including interim relief measures such as:

• Collecting and preserving evidence;
• Compelling witness testimony.

Previously, these remedies were only available in High Court litigation. The expanded powers provide arbitration users with more a robust approach to ensure fairness and procedural integrity.

3. Support for Emergency Arbitration

Certain institutional arbitration rules allow for the appointment of emergency arbitrators in cases of urgency. However, the Arbitration Act 1996 contained no provisions supporting the appointment of emergency arbitrators, leading to uncertainty, leading to potential uncertainty over their status.

The AA 2025 establishes a statutory framework for the powers of emergency arbitrators where the parties have agreed to the application of rules which provide for this - including the ability to issue peremptory orders. This reform will give certainty to parties seeking to make such appointments in urgent situations.

4. Enhanced Immunity for Arbitrators

The AA 2025 strengthens protections for arbitrators against liability.

Firstly, where a party makes an application to Court for the removal of an

arbitrator under s.24 Arbitration Act, the Court will be prevented from awarding costs against the arbitrator unless an act or omission by them was made in bad faith.

Secondly, (subject to some exceptions) an arbitrator's resignation will not give rise to any liability for the arbitrator unless their resignation was unreasonable in all the circumstances.

These developments will doubtless be welcomed by arbitrators.

5. Clarification of Governing Law for Arbitration Agreements

The Act 2025 introduces a default rule to determine the governing law of arbitration agreements in the absence of an explicit choice by the parties. Under this provision, the law of the seat of arbitration will automatically apply in circumstances where there is no choice of law clause. For example, if the parties select England as the seat, English law will govern the arbitration agreement.

This change is expected to reduce complex and costly disputes over governing law and provide greater legal certainty for arbitration users.

6. New Procedure for Jurisdictional Challenges

The Act 2025 introduces significant procedural changes for parties challenging a tribunal’s jurisdiction. Previously, an appeal in relation to a tribunal's award on its own jurisdiction under section 67 Arbitration Act 1996 involved a complete re-hearing of the jurisdiction issue. This could incur significant time and costs, and accordingly be used tactically in some case.

Under the new regime, a jurisdictional challenge under Section 67 will be limited to reviewing the evidence and arguments presented to the tribunal, except in rare cases where new arguments could not reasonably have been raised earlier. This is a mandatory provision, meaning parties cannot opt out, signalling a strong move towards increasing arbitration efficiency.

7. Arbitrator’s Duty of Disclosure

While the AA 2025 does not introduce a new duty, it codifies the common law position established in Halliburton v Chubb. Arbitrators are now expressly required to disclose circumstances that may give rise to "justifiable doubts as to the individual's impartiality".

The Act does not define specific circumstances requiring disclosure. We suspect that different standards may be applied across different industries (as was suggested in Halliburton v Chubb. For instance, in sectors such as shipping, where repeat arbitrator appointments are common, it is probably unlikely to result in substantial changes; however, arbitrators may adopt a cautious approach by voluntarily disclosing more details. Nonetheless, the lack of strict guidance may also lead to increased disputes over disclosure obligations.

Practical Implications of These Changes

The reforms in the AA 2025 are relatively limited in scope – they represent evolution rather than revolution. Nevertheless, they introduce important clarifications and procedural amendments. Businesses and legal practitioners should carefully consider these changes when:

• Negotiating and drafting arbitration agreements;
• Drafting and updating standard form contracts/terms; and
• Advising clients on dispute resolution strategies.

The new provisions aim to make arbitration more efficient, cost-effective, and attractive to international commercial parties. As the Arbitration Act 2025 is now in force, it will be important to stay informed and adapt contractual practices accordingly to fully take advantage of any opportunities provided by these legislative updates.