Arbitration Act 2025 in force from 1 August

The UK Government has published the statutory instrument confirming that the Arbitration Act 2025 (the 2025 Act) will be brought into force from 1 August 2025.

The 2025 Act makes important amendments to the Arbitration Act 1996, including:

• A statutory duty of disclosure is imposed on arbitrators. This codifies the common law requirement for arbitrators to disclose circumstances, which “might reasonably give rise to justifiable doubts as to the [arbitrator’s] impartiality”. In addition, the statutory duty arguably goes further than the common law in that it is not limited to arbitrators’ actual knowledge but instead extends to requiring arbitrators to disclose circumstances of which they “ought reasonably” to be aware.
• A new default rule provides that the governing law of an arbitration agreement is the law of the seat of the arbitration, unless the parties expressly agree otherwise. This replaces the common law test and overturns the decision in Enka v Chubb, where the Supreme Court held that a choice of law provision in the "matrix" contract should generally be construed as applying to an arbitration agreement contained within that contract, irrespective of the place chosen to be the seat of the arbitration.
• Provision is made for the introduction of new court rules limiting the scope for jurisdiction challenges under section 67 of the 1996 Act to include new grounds or evidence not raised before the tribunal. However, no new rules have yet been published. This was one of the Law Commission’s more controversial proposals and the impact of this reform will depend on the drafting of any new court rules and the manner in which they are applied by judges.
• Section 44 of the 1996 Act is amended to clarify that the court’s powers in support of arbitral proceedings can be exercised against non-parties to those arbitral proceedings.
• Emergency arbitrators are given powers:
  • to make a peremptory order, which may be enforced by the court; and
  • to give parties permission to apply to the court for an order.

Both these changes replicate the rules already in place for “normal” arbitrators and are intended to support the enforcement of orders made by emergency arbitrators.

• Arbitrators are given an express power to make an award on a summary basis (unless the parties agree otherwise). Although the powers conferred by the 1996 Act were already broad enough to allow for summary disposal, the introduction of an express power is intended to encourage the use of summary procedures in suitable cases, thereby increasing efficiency and reducing the scope for parties to adopt tactics of delay.
• Arbitrators’ immunity from suit is bolstered by limiting the circumstances in which they can be liable for costs incurred in applications for their removal (unless the arbitrator acted in bad faith) or losses suffered as a result of their resignation (unless the resignation was unreasonable).

These changes apply to arbitral proceedings commenced after 1 August, irrespective of the date when the applicable arbitration agreement was made.

For more details on these changes and for the Law Commission’s consultation process, see our previous articles: Arbitration Bill introduced to Parliament, Second consultation paper on reform of the Arbitration Act 1996 and A "state of the art" Arbitration Act: the Law Commission's proposals.