1.Introduction

The Arbitration Act 2025, which entered into force on 1 August 2025, represents a significant evolution in the United Kingdom’s arbitration landscape. This legislative reform, following extensive consultation by the Law Commission.

This blog post will first introduce the main legislative change, comparative analysis of the core changes brought about by the new Act versus its predecessor and lawsplains the possible impact of it for legal practitioners.

2.Legislative Background and Development

The United Kingdom’s arbitration framework has operated under the Arbitration Act 1996 for nearly three decades, establishing London as a leading international arbitration hub. However, competitiveness from other major arbitration centres, including Singapore, Paris, and Geneva, prompted the UK Government to commission the Law Commission in November 2021 to review the existing legislation and ensure it remained “state of the art” for both domestic and international commercial arbitration.

Following comprehensive consultations with practitioners, businesses, and judicial authorities, the Law Commission published its final recommendations in September 2023. The resulting Arbitration Bill received Royal Assent on 24 February 2025, officially becoming the Arbitration Act 2025. The legislation applies to arbitration proceedings and related court proceedings commenced on or after 1 August 2025, whilst preserving the integrity of existing arbitrations under the previous regime.

3.Comparative Analysis: Key Reforms

Reform Area	Arbitration Act 1996	Arbitration Act 2025
Governing Law of Arbitration	Law determined by common law principles, notably Enka v Chubb creating uncertainty	Default rule: law of the seat governs arbitration agreements unless parties agree otherwise
Summary Disposal Powers	General case-management powers under Section 34, but no express summary dismissal authority	Section 39A grants tribunals power to summarily dismiss claims, defences, or jurisdictional objections lacking a real prospect of success
Arbitrator Disclosure Obligations	Common law duty to disclose, limited to actual knowledge (e.g., Halliburton v Chubb)	Statutory, continuing duty to disclose circumstances giving rise to justifiable doubts about impartiality
Arbitrator Immunity	Some protections against liability, but limited scope for resignations/removals	Enhanced immunity: protects resignations absent unreasonableness and shields against costs orders in removal proceedings absent bad faith
Emergency Arbitrator Recognition	No statutory recognition or enforceability of emergency arbitrator orders	Formal recognition and court-enforceable orders for emergency arbitrators, aligning with LCIA rules
Jurisdictional Challenge Procedures	Section 67 allowed de novo court reviews, permitting new arguments and evidence	Sections 14–17 limit court reviews to grounds and evidence previously raised before the tribunal, barring relitigation
Appeals Process Clarification	Section 69 allowed appeals on questions of law with party agreement and court permission; time limits and grounds were not clearly defined	Retains opt-in appeals on questions of law but specifies grounds, time limits, and permission requirements to reduce uncertainty
Removal of Obsolete Provisions	Contained provisions on consumer-dispute arbitration, outdated definitions, and transitional clauses no longer relevant	Repeals provisions on consumer disputes, archaic definitions, and spent transitional clauses to simplify and modernise the statutory text
Correction of Drafting Anomalies	Inconsistencies in terms such as “seat” vs. “place of arbitration” and misaligned internal cross-references caused interpretative issues	Harmonises definitions, realigns cross-references, and corrects drafting errors to eliminate ambiguities in procedural provisions
Empowerment of Civil Procedure Rule Committee	No express rule-making power specific to arbitration jurisdictional challenges; procedural details left to practice directions	Grants explicit rule-making authority to the Civil Procedure Rule Committee for time limits, notice requirements, and case-management directions in jurisdictional challenges

4.Lawsplained

Reinforcing London’s Global Position

The Act targets key areas where similar arbitration hubs have outpaced the UK through legislative updates, harmonising UK procedures with global best practices while retaining the hallmark strengths of the English legal system. In particular, by defaulting the governing law of arbitration agreements to the seat, London-seated arbitrations will uniformly benefit from England’s robust, arbitration-friendly jurisprudence—offering a clear advantage over venues where the applicable law may be less supportive of arbitral autonomy.

The default application of seat law for arbitration agreements particularly benefits London-seated arbitrations by ensuring they operate under England’s well-developed arbitration jurisprudence. This creates a significant advantage over jurisdictions where arbitration agreements might be governed by less arbitration-friendly legal frameworks.

Attracting International Investment

Enhanced predictability in governing law determination, streamlined jurisdictional challenges, and strengthened procedural efficiency collectively reduce legal risk for international parties engaging in cross-border transactions. These reforms are likely to increase the attractiveness of English law and London seats for international commercial disputes, potentially driving increased foreign direct investment and commercial activity.

5.Conclusion

The legislation demonstrates the UK’s commitment to maintaining arbitration leadership through thoughtful modernisation rather than radical restructuring. By addressing specific areas of uncertainty and procedural inefficiency whilst strengthening arbitrator independence and party confidence, the Act creates a robust framework for the future development of international arbitration practice.

The success of these reforms will ultimately be measured by their practical impact on arbitration practice and London’s continued attractiveness to international commercial parties. Early indications suggest that the targeted nature of the changes, combined with their alignment with international best practices, positions the UK well for sustained leadership in the global arbitration marketplace.

The Lawsplain

UK Arbitration Act 2025: Key Changes & Global Impact Explained