The Arbitration Act 2025: 5 significant changes to highlight

As many of you may or may not be aware, the arbitration landscape within England and Wales underwent a significant change in 2025, one which has been welcomed by many lawyers across the globe.

The aim of the new legislation entitled The Arbitration Act 2025 (“the Act”), which came into force on 1 August 2025, was to affirm London’s position as a leader in the arbitration sphere as one of the best places to go to for resolving disputes outside of court. By modernising the pre-existing Arbitration Act 1996 (“AA96”) which has been in force since 1997, the UK will remain as the top choice for resolving disputes through arbitration, continuing to attract investment from international businesses and putting it in good stead against its competitors in Paris and Singapore.

In this article, we highlight the most pertinent changes that have been introduced within the Act.

It is, however, important to note that the Act only applies to arbitration proceedings commenced on or after 1 August 2025. This will still apply even if the arbitration agreement was entered into before that date.

What are the key changes?

Governing law of the arbitration agreement

Section 1 of the Act introduces a new section 6(A) into the AA96 which clarifies that the law governing of an arbitration agreement is now to be determined by express agreement between the parties. This means that when choosing a governing law for the main contract, it will not automatically apply to the arbitration agreement it contains.

This new section 6(A) provision departs from the common law approach in Enka v Chub [2020] which established that the governing law of an arbitration agreement was often inferred from the law of the main contract or jurisdiction clause, in circumstances where the parties had not expressly provided a choice of law.

Section 6(A) provides that the law governing an arbitration agreement is to be determined by express choice of the parties, and where no such choice is made, the arbitration agreement will instead be governed by the law of the seat of the arbitration.

As a result, parties should carefully consider their choice of law when drafting a governing law clause in an arbitration agreement, even if such a clause exists in a contract which already contains a governing law clause. If parties would like the law of the arbitration agreement to be the same as that in the main contract, it should be explicitly stated.

Duty of disclosure

Section 2 of the Act introduces a new section 23A into the AA96, which now requires that an arbitrator must disclose all “relevant circumstances” that might reasonably give rise to justifiable doubts as to that arbitrator’s impartiality in relation to the proceedings. This provision is mandatory.

Such “reasonable circumstances” may include if the arbitrator has had prior involvement in the dispute, has a financial interest, or has represented one of the parties previously (perhaps when they were a barrister).

This duty is continuous and applies for the duration of arbitral proceedings. The duty of disclosure includes circumstances that the arbitrator(s) ought to be reasonably aware of, even if they are not known.

This is a welcome provision as it promotes the impartiality of arbitral proceedings and reduces the risk of bias.

Immunity of arbitrators

Arbitrators usually have immunity from liability for acts or omissions when acting in their capacity as an arbitrator. The Act has now extended arbitrator immunity to include circumstances when a party applies to the court to have the arbitrator removed.

In these circumstances, the arbitrator will not be ordered to pay costs unless it can be shown that the arbitrator has acted in bad faith.

Further, if an arbitrator was to resign, this would not place the arbitrator at risk of incurring liability for resignation, unless it can be shown that the resignation was unreasonable.

Summary disposal of arbitration

We have previously written about the benefits of the Act introducing summary disposal powers, which creates a significant enhancement to London-seated arbitrations.

In short, the Act now provides arbitrators with summary disposal powers, meaning they have the authority to dismiss claims that have no prospect of success (although this will only be done upon an application from a party). This framework is extremely beneficial to those partaking in arbitration and should enhance efficiency and reduce wasted costs wherever possible.  

Challenging the award

Finally, the Act introduces a new provision that limits the grounds to challenge an arbitration award. Under the amendments, challenge is only allowed in a few very limited circumstances, contained within the amended section 67 of the AA96. Examples include when there was no valid arbitration agreement, or when the tribunal was not properly constituted.

The court is therefore not permitted to set aside or declare an award unless it is satisfied that it would be inappropriate to remit the matters to the court for reconsideration. In overview, this new provision will make it more difficult to challenge an arbitration award.

However, if a matter is challenged before the court, then there is also a new procedure in place to challenge the award. The court will not hear new evidence or new arguments that was previously heard by a tribunal.