On 24 February 2025, the UK Arbitration Act 2025 received royal assent. While it does not bring with it large-scale reform of the Arbitration Act 1996 (which was considered to be largely fit for purpose), some of the amendments are nevertheless significant. The following are of particular note.
First, there are some important changes to ensure UK arbitration can be managed efficiently and effectively:
- Power of summary disposal: Section 39A allows arbitration tribunals to summarily dispose of issues if a party has no real prospect of success, streamlining the arbitration process.
- Emergency arbitrators: New Sections 41A and 42 support the enforcement of orders by emergency arbitrators, aligning the 1996 Act with modern arbitral rules and practices.
- Orders in support of arbitration: Amendments to Section 44 clarify that court powers apply to any party or person (including against third parties), ensuring broader court support for arbitration.
- Challenges to awards under Section 67: New subsections 3B and 3C limit the grounds and evidence for challenging awards, preventing unnecessary rehearing of the evidence.
These are all important changes to ensure that arbitration remains an attractive option for dispute resolution.
Secondly, a new Section 6A establishes a default rule on governing law, stipulating that the arbitration agreement will be governed by the law of the seat unless expressly agreed otherwise by the parties. This provides welcome certainty on the point, which has been the subject of several court proceedings over recent years. As ever, due care must be given to the drafting of arbitration agreements to ensure they are effective and achieve what the parties intend.
Finally, two amendments relating to arbitrators:
- Arbitrator’s duty of disclosure: Section 23A introduces a statutory duty for arbitrators to disclose any circumstances that might raise doubts about their impartiality. It is, of course, vital that parties have the utmost faith in their tribunals, and while the English courts had developed common law on the point, again, this amendment brings welcome clarity.
- Arbitrator immunity: Sections 24 and 25 extend immunity to arbitrators, protecting them from liability for resignation (unless unreasonable) and from paying costs in removal proceedings (unless they were acting in bad faith). This is a sensible amendment that protects arbitrators, which in turn ensures that arbitration remains an attractive option for individuals of the highest calibre.
It has yet to be confirmed when the Arbitration Act 2025 will come into force but, when it does, we consider it will achieve its purpose of promoting the UK as one of the world’s premier seats of arbitration.
Contributors
Juan Nascimbene