Arbitration Act 2025 Receives Royal Assent in the United Kingdom

The Law Commission concluded that the 1996 Act generally works well and that root and branch reform was neither needed nor wanted, so the new Act makes targeted changes. An earlier Arbitration Bill fell on prorogation in 2024; the Act largely replicates it, with one change on investor-state arbitration.

The main reforms

According to the government's explanatory notes, the Act's main initiatives are:

• Law of the arbitration agreement: a new default rule clarifying which law governs an arbitration agreement. Absent an express choice by the parties, it will be the law of the seat; this does not apply to investor-state agreements derived from treaties or non-UK legislation.
• Arbitrator disclosure: codification of an arbitrator's duty to disclose circumstances that might reasonably give rise to justifiable doubts as to impartiality.
• Arbitrator immunity: strengthened immunity in relation to resignation and applications for removal.
• Summary disposal: a power for tribunals to dispose summarily of issues that have no real prospect of success.
• Court support: clarification of court powers in support of arbitral proceedings and of emergency arbitrators.
• Jurisdiction challenges: a revised framework for challenges under section 67 of the 1996 Act alleging that the tribunal lacked jurisdiction.

Minor changes clarify appeals, simplify preliminary applications to court and clarify time limits for challenging awards.

Why it matters

The explanatory notes cite a Law Commission estimate of at least 5,000 arbitrations a year in England and Wales, worth at least GBP 2.5 billion to the economy in arbitrator and legal fees alone. The reforms are intended to keep the 1996 framework up to date as other seats revise their laws.

What happens next

Most of the substantive provisions will come into force on a date to be appointed by regulations. Parties drafting arbitration clauses now should consider expressly choosing the law of the arbitration agreement, since the new default rule will point to the law of the seat.

Sources

• legislation.gov.uk: Arbitration Act 2025
• legislation.gov.uk: Arbitration Act 2025, Explanatory Notes (Policy background)
• Law Commission: The Arbitration Act 2025 has received Royal Assent