Arbitration Act 2025 in power from 1 August

The UK Government has printed the statutory instrument confirming that the Arbitration Act 2025 (the 2025 Act) shall be introduced into power from 1 August 2025.

The 2025 Act makes essential amendments to the Arbitration Act 1996, together with:

• A statutory obligation of disclosure is imposed on arbitrators. This codifies the frequent legislation requirement for arbitrators to reveal circumstances, which “might reasonably give rise to justifiable doubts as to the [arbitrator’s] impartiality”. In addition, the statutory obligation arguably goes additional than the frequent legislation in that it isn’t restricted to arbitrators’ precise data however as a substitute extends to requiring arbitrators to reveal circumstances of which they “ought reasonably” to remember.
• A brand new default rule offers that the governing legislation of an arbitration settlement is the legislation of the seat of the arbitration, until the events expressly agree in any other case. This replaces the frequent legislation take a look at and overturns the choice in Enka v Chubb, the place the Supreme Court held {that a} alternative of legislation provision within the “matrix” contract ought to typically be construed as making use of to an arbitration settlement contained inside that contract, no matter the place chosen to be the seat of the arbitration.
• Provision is made for the introduction of latest court docket guidelines limiting the scope for jurisdiction challenges underneath part 67 of the 1996 Act to incorporate new grounds or proof not raised earlier than the tribunal. However, no new guidelines have but been printed. This was one of many Law Commission’s extra controversial proposals and the affect of this reform will depend upon the drafting of any new court docket guidelines and the way wherein they’re utilized by judges.
• Section 44 of the 1996 Act is amended to make clear that the court docket’s powers in assist of arbitral proceedings might be exercised in opposition to non-parties to these arbitral proceedings.
• Emergency arbitrators are given powers:
  • to make a peremptory order, which can be enforced by the court docket; and
  • to provide events permission to use to the court docket for an order.

Both these modifications replicate the foundations already in place for “normal” arbitrators and are meant to assist the enforcement of orders made by emergency arbitrators.

• Arbitrators are given an specific energy to make an award on a abstract foundation (until the events agree in any other case). Although the powers conferred by the 1996 Act have been already broad sufficient to permit for abstract disposal, the introduction of an specific energy is meant to encourage using abstract procedures in appropriate instances, thereby growing effectivity and decreasing the scope for events to undertake techniques of delay.
• Arbitrators’ immunity from go well with is bolstered by limiting the circumstances wherein they are often accountable for prices incurred in purposes for his or her elimination (until the arbitrator acted in dangerous religion) or losses suffered on account of their resignation (until the resignation was unreasonable).

These modifications apply to arbitral proceedings commenced after 1 August, no matter the date when the relevant arbitration settlement was made.

For extra particulars on these modifications and for the Law Commission’s session course of, see our earlier articles: Arbitration Bill launched to Parliament, Second session paper on reform of the Arbitration Act 1996 and A “state of the art” Arbitration Act: the Law Commission’s proposals.