On 24 February 2025, after years of work and public consultations spearheaded by the Law Commission, the Arbitration Act 2025 (the “2025 Act”) received Royal Assent. The new law, adopted to “turbocharge UK’s position as the world-leader in arbitration”,[1] amends the Arbitration Act 1996 (the “1996 Act”). Once brought into force (date to be confirmed by the UK Government), its amendments will apply to all future arbitrations with a seat in England and Wales and to all arbitral awards made after that date.

Arbitration is already the dispute resolution method of choice for many individuals and companies, and its popularity is growing as a means to resolve disputes outside of traditional court processes and allows parties to litigate disputes on their terms. The UK Government estimates that at least 5,000 arbitrations in England and Wales take place annually – contributing at least £2.5 billion to the UK economy annually in fees alone, and to making the UK the largest legal market in Europe.[2] The 1996 Act has provided the legal framework governing arbitrations seated in England and Wales for almost 30 years. In a testament to the resilience of the 1996 Act, the changes brought in seek to “fine-tune” the process rather than addressing major issues identified in it. Amongst these changes, we think parties will be most interested in:

• A new power for arbitrators to dismiss claims or issues (whether claims or defenses) at an early stage if there is ‘no real prospect’ of success – thereby giving them an equivalent to the English courts’ power to grant summary judgment and potentially speeding up dispute resolution.
• The duty that arbitrators disclose circumstances which might cast reasonable doubt on their impartiality – while the arbitrators were already under a duty of impartiality, this bolsters that position and puts the common law duty of disclosure on a statutory footing, providing additional protection for parties that the tribunal will be impartial.
• Narrowing the scope for courts to consider objections to matters of jurisdiction where those have already been dealt with by the tribunal – this responds to a gap created by case law and should prevent a party using the court to relitigate matters already decided by the tribunal.
• A new power for courts to make orders against third parties, for instance to preserve evidence or take witness evidence – this resolves conflicting series of cases and aligns with the court’s power in civil proceedings.
• A new provision that applies the law of the seat as the ‘default’ governing law of the arbitration agreement[3], in the absence of the parties agreeing otherwise – this should reduce disputes between the parties as to which law should apply to the arbitration agreement itself, which can prove an unhelpful distraction from the issues in dispute.

Do get in touch if you would like to discuss the changes the adoption of the 2025 Act may bring for you and your agreements or disputes.

If you would like to discuss the contents of this article further, please contact Boris Telyatnikov, Evgeniya Rubinina, or Daniel Levy.

[1] Ministry of Justice, Press release, “Boost for UK economy as Arbitration Act receives Royal Assent”, 24 February 2025.

[2] Explanatory Notes to the Arbitration Bill, 22 November 2023 (accessed on 25 February 2025) https://publications.parliament.uk/pa/bills/lbill/58-04/007/en/5804007en03.htm.

[3] Note this does not apply to investment treaty disputes.