On 1 August 2025, the Arbitration Act 2025 ("2025 Act") will come fully into force1. The 2025 Act revamps the arbitration framework for England, Wales and Northern Ireland (through amendments to the Arbitration Act 1996). The reforms will directly affect businesses planning to commence arbitration proceedings (or arbitration-related court proceedings) from 1 August 2025.
WHAT'S CHANGING?
The key reforms in the 2025 Act – which promote speed, fairness, efficiency, and legal certainty – aim to further cement London's position as "leading destination for arbitration". They include:
- A new default rule aligning the seat of the arbitration with the law governing the arbitration agreement (meaning that the law governing many arbitration agreements will automatically change on 1 August);
- A revised procedure restricting jurisdictional challenges under section 67 (alleging the tribunal lacked substantive jurisdiction);
- A new express power of summary disposal (enabling arbitrators to dispose summarily of issues which have no real prospect of success); and
- New provisions empowering emergency arbitrators.
IMPACT OF THE REFORMS
These reforms, and the other changes introduced by the 2025 Act, will have important implications for business. For example: parties will need to review their existing arbitration clauses and carefully consider how the changes impact future disputes. We provide further detail about the impact of the key changes in Part 1 of our prior alert on the 2025 Act. We discuss the remaining improvements, and their likely impact, in Part 2.
Raid Abu-Manneh, Global Co-Leader of our International Arbitration practice, comments:
"The 2025 Act will give a massive boost to the London legal market and reinforce London's status as a world-class seat for arbitration. Coupled with the UK's adoption of the Hague Convention 2019, these reforms position London as a major hub for arbitration and litigation."
Our dedicated Insights page provides all our Legal Updates about this reform from consultation to implementation stage. These reforms will be of interest not only to those arbitrating in England, Wales, and Northern Ireland but also to the wider international arbitration community given that the Arbitration Act 1996 and related English case law has been (and continues to be) influential in many jurisdictions.
Footnote
1. Pursuant to The Arbitration Act 2025 (Commencement) Regulations 2025 which brings the substantive parts of the 2025 Act into force since they did not come into force on Royal Assent on 24 February 2025.
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