New UK Arbitration Act 2025 in Force: What You Need to Know

On August 1, 2025, the United Kingdom’s Arbitration Act 2025 (the “2025 Act”) came into force. The 2025 Act reflects a comprehensive review of the Arbitration Act 1996 (the “1996 Act”) undertaken by the Law Commission and the Ministry of Justice. ^[1]

The reforms are designed to provide the efficiency, transparency, finality, and fairness demanded by modern arbitration, while preserving the framework of the existing legislation.

The UK hosts up to 5,000 domestic and international arbitrations each year, with industry estimates showing a 26% increase in activity between 2016 and 2020.^[2]

By implementing the Law Commission’s recommendations into the 2025 Act, the UK aims to maintain its competitive edge and modernize dispute resolution to attract international business^[3] from competitors such as Singapore, Hong Kong, France, and Germany.

Key Reforms in United Kingdom’s Arbitration Act 2025

Below are the key changes that may impact businesses and arbitration practitioners when choosing the UK as the place of arbitration.

• Governing Law of Arbitration Agreement: The 2025 Act provides that the law of the seat of arbitration governs arbitration agreements, unless the parties agree otherwise.^[4] This replaces the common law rule in Enka v Chubb that, absent agreement, the law governing the main contract will apply by default, even if it differs from the seat of arbitration.^[5]
• Increased Disclosure: The 2025 Act codifies the arbitrators’ duty to disclose, as soon as reasonably practicable, any relevant circumstances that might reasonably give rise to justifiable doubts as to the individual’s impartiality in relation to proceedings or potential proceedings.^[6] These reforms align the legislation with the common law rule in Halliburton Co v Chubb Bermuda Insurance Ltd^[7] and Article 5.5 of the LCIA Rules.^[8]
  
• Arbitrator Immunity for Costs: New provisions confirm that a court may not order the arbitrator to pay costs in proceedings related to the removal of an arbitrator unless bad faith is shown.^[9]
• Summary Determination of Issues: The 2025 Act introduces a provision allowing for summary determination of claims or defences that have no real prospect of success, similar to early determination provisions in institutional arbitration rules such as the London Court of International Arbitration.^[10]
• Emergency Arbitrators: The 2025 Act enables the resolution of urgent issues by authorizing emergency arbitrators to issue peremptory orders.^[11]
• Court Orders Apply to Third Parties: The court’s power to make orders in support of arbitration proceedings on the taking of witness evidence, the preservation of evidence, orders relating to property, the sale of goods, and interim injunctions now also apply as against third parties.^[12]
• Jurisdictional Challenges: New amendments to section 67 ensure that, when the arbitral tribunal has already ruled on jurisdiction and the objecting party participated, any subsequent challenge will be a review only and not a full re-hearing of evidence.^[13] This departs from the common rule established in Dallah Real Estate & Tourism Holding Co v. Ministry of Religious Affairs of the Government of Pakistan [2010] UKSC 46.
• Awarding Costs: Arbitrators may now award costs even when the arbitral tribunal has no substantive jurisdiction.^[14]
• Time Limits for Challenges or Appeals: The 2025 Act clarifies that the 28-day time limit for appeals or challenges of awards begins from the date of the correction of an award or additional award, [15] while modification to related legislation now requires written permission from the High Court for appeals under Part 1 of the 2025 Act.^[16]

As set out above, the 2025 Act modernises and refreshes arbitration legislation in the UK, which is one of the most important centers for arbitration globally.

Do you have questions related to this topic? Please contact a member of our Alternative Dispute Resolution Group.