Arbitration Act 2025 Receives Royal Assent

The Arbitration Act 2025 (the “2025 Act”) received Royal Assent on 24 February 2025, bringing with it some long-anticipated reforms to arbitration law (see here for our most recent commentary on the proposed reforms). 

The aim of the legislation is to cement the UK’s position as a global destination of choice for arbitration, signalling to competitors such as Paris, Singapore and Hong Kong that London remains the world-leading arbitral seat. 

Some of the key changes within the 2025 Act:

• Governing law of the arbitration agreement – absent an express choice by the parties as to the governing law of the arbitration agreement itself, the default governing law of the agreement will now be the law of the seat of the arbitration. This new rule replaces the existing position under English law that an arbitration agreement is governed by the law of the underlying contact unless expressly stated otherwise (as per the Supreme Court’s decision in Enka v Chubb). There is a specific exception in the 2025 Act for Investor-State Dispute Settlement (ISDS) cases where the arbitration clause originates from a treaty or non-UK legislation.

• Jurisdictional challenges – there will be a new approach to jurisdictional challenges under the 2025 Act. The following rules will apply where the arbitral tribunal has already ruled on a jurisdictional objection and the challenging party participated in the arbitral proceedings (subject to the court ruling otherwise in the interests of justice):
  • the applicant cannot raise before the court a ground for the objection that was not raised before the arbitral tribunal unless the applicant shows that, at the time it took part in the proceedings, it did not know and could not with reasonable diligence have discovered the ground;
  • the applicant cannot rely on evidence that was not put before the tribunal unless the applicant shows that, at the time it took part in the proceedings, it could not with reasonable diligence have put the evidence before the tribunal; and
  • evidence that was heard by the tribunal must not be re-heard by the court.

• Power to make awards on a summary basis – arbitrators will be empowered to expedite decisions on claims, or particular issues arising in claims, if the tribunal considers that a party has “no real prospect of success”. This provision is not mandatory, so parties may agree to opt out if they wish.  

Other notable changes include:

• a new duty on arbitrators to disclose to the parties any circumstances which could cast reasonably doubt on their impartiality;
• extended immunity for arbitrators against liability for resignations and the costs of the application to court for removal; 
• enhanced court powers to support emergency arbitrators and make orders against third parties in arbitration; and
• simplified arbitration-related court procedures to increase clarity and reduce delays and costs. 

The Arbitration Act 2025 promises a more efficient approach to arbitration in England, Wales and Northern Ireland. The clarification on the law applicable to arbitration agreements ought to reduce satellite litigation, while the streamlined procedures and enhanced powers for arbitrators and the English courts should help to minimise delay and reduce costs for the parties. 

While the main provisions of the 2025 Act are not yet in force, the new law will be commenced through regulations “as soon as practicable” (according to the government); businesses and their advisors should take note of the reforms and consider whether any changes are needed to their contracts.

Written by Jasmine Sharp (solicitor) and Christopher Wenn (senior associate), both of whom specialise in commercial dispute resolution.