The Fruit Of Modernisation: The Arbitration Act 2025

Back in November 2023, the Law Commission was tasked with reviewing the long-standing 1996 Arbitration Act. Since then, everything has proceeded according to the government's timeline and on 24 February 2025, the Arbitration Act 2025 ("the 2025 Act") received Royal Assent.

Accordingly, from 01 August 2025, the 2025 Act will replace the 1996 Act. The amendments, which are primarily intended to modernise dispute resolution in England, also aim to strengthen England's position not only in the dispute resolution arena but also economically.

According to the Ministry of Justice's Press Release, arbitration proceedings in England contribute at least £2.5 billion to the UK economy annually.

The modernisation of the 1996 Act will, therefore, ensure that England maintains its leading position and outperforms key competitors such as Hong Kong or Paris. But what are the key changes that will achieve these aims?

The Key Takeaways

1. Codified Duty of Disclosure for Arbitrators: The common law duty of disclosure, as established in Halliburton v Chubb, has now been placed on a statutory footing as a mandatory provision under the 2025 Act. Arbitrators must disclose any circumstances that could give rise to justifiable doubts about their impartiality or independence. This is a continuing duty, which also extends to relevant circumstances that the arbitrator ought reasonably to be aware of.
2. Enhanced Arbitrator Immunity: Under the 2025 Act, where the court removes an arbitrator, the arbitrator will not be paying the costs of an application unless their removal was the result of any act or omission in connection with the proceedings is shown to have been in bad faith. This change will also apply for resignation instances to enhance arbitrators' immunity.
3. Power of Summary Disposal: The 2025 Act introduces a new Section 39A, granting tribunals the power to issue an award on a summary basis if the tribunal considers that a party has "no real prospect of succeeding" on the claim or in "the defence of the claim". This amendment aims to deliver significant time and cost savings.
4. Governing Law: A new default rule of the applicable law has been introduced with the 2025 Act. Accordingly, unless the parties have expressly agreed otherwise, the governing law of the arbitration agreement will be the seat of the arbitration.
5. Revised Section 67: The amendments clarify the scope of court intervention by preventing the re-hearing of evidence that has already been presented before the tribunal. They also restrict limit parties from introducing new evidence.
6. Emergency Arbitrators: Emergency arbitrators have been given the authority to issue peremptory orders or give permission for applications to the court under section 44.
7. Time for Appeals after Correction of Awards: According to the amended section 70, the 28-day time limit for filing appeal applications begins from the date the tribunal makes a material correction to the award.

It is worth noting that the 2025 Act, the fruit of these modernisations, is merely the starting point and much remains for the courts to determine the details as we start applying the new rules from 01 August 2025.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.