Arbitration Act 2025: key reforms aim to strengthen England’s arbitration framework 

England, and London in particular, remains a global hub for international arbitration. In response to evolving practices and to maintain its competitive edge, the Arbitration Act 2025 (the Act) introduces targeted reforms to modernise the Arbitration Act 1996. The Act has received Royal Assent, with its provisions to come into force on 1 August 2025. 

Background 

Prompted by a 2021 review by the Law Commission, the Act aims to ensure England remains attractive for commercial arbitration. While many changes are procedural, several are significant for practitioners and contract drafters alike.

Key reforms 

1. Governing law of arbitration agreements 

The Act clarifies that where no law is specified, the law of the seat (typically English law) governs the arbitration agreement. This ensures parties benefit fully from England’s arbitration-friendly legal framework. 

The Act reverses the Supreme Court’s position in Enka [2020] EWCA Civ 574 (upheld in UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30). Under English law, arbitration clauses are treated as separate agreements, potentially governed by different laws than the main contract. The Supreme Court had ruled that, unless stated otherwise, the contract’s governing law also applies to the arbitration clause. However, the Law Commission found this problematic, as it could lead to English-seated arbitrations being governed by less arbitration-friendly foreign laws—undermining key protections and benefits, such as the doctrine of separability or the arbitrability of disputes.  

2. Key changes to challenges under the Arbitration Act 2025 

The Act confirms that a court dealing with a jurisdictional challenge cannot rehear evidence that has already been considered by a tribunal.  It will be left to the courts to work out the details of this. 

The Act also amends Section 70 to clarify that the 28-day deadline for challenging or appealing an award (under Sections 67, 68, or 69) runs from the date of any material correction or additional award made pursuant to Section 57. 

3. Summary disposal power 

Under the Act, arbitrators will have an express power to summarily dismiss claims or defences with no real prospect of success. This codifies existing practice and helps reduce delays, particularly in arbitrations not governed by institutional rules.  

4. Streamlined jurisdiction challenges (Section 67) 

Section 67 of the Arbitration Act 1996 allows parties to challenge an award on the basis that the tribunal lacked substantive jurisdiction. Following Dallah v Pakistan [2010] UKSC 46, the Supreme Court confirmed that such challenges entitle parties to a full re-hearing, rather than a limited review. However, the Law Commission found this approach inefficient and a source of delay. 

The Act limits the scope of jurisdictional challenges by restricting new evidence and rehearings unless justice demands it. This change aims to reduce inefficiencies and promote finality. 

5. Emergency arbitrators 

Emergency arbitrators are now formally recognised and granted enforceable powers under Section 44, aligning the law with modern arbitral practice and enhancing interim relief options. 

6. Interim relief  

Chabra relief is a form of freezing relief granted against a third party to proceedings against whom the claimant does not have a direct cause of action. 

Historically, Chabra relief has been limited in shipping cases. Section 44 of the 1996 Arbitration Act was considered not to permit the obtaining of Chabra relief in support of arbitration, as per Mr Justice Males in Cruz City 1 Mauritius Holdings v Unitech Ltd and others [2014] EWHC 3704 (Comm) and judgment then adopted in Ms Justice Cockerill in Dtek Trading SA v Morozov [2017] EWHC 94 (Comm). 

The Act will include a provision that expressly extends Section 44 to relief against both parties and non-parties, possibly opening the door to obtaining chabra orders in support of English Arbitration.   

7. Arbitrator duties and protections 

The duty of impartiality is now codified, and arbitrators gain extended immunity, including protection when resigning (unless unreasonable), supporting confidence in the role. The Act also removes the risk of costs orders being made against arbitrators who are removed by the courts—unless the removal is due to bad faith. 

Conclusion 

The Arbitration Act 2025 reinforces England’s position as a leading arbitration venue. While many changes are incremental, the shift in governing law rules is particularly noteworthy for those drafting arbitration clauses.  

The Arbitration Act 2025 applies to England, Wales & Northern Ireland.