The Arbitration Act 2025 – nothing to see here?

Section 1: default law governing arbitration agreements

The default law governing an arbitration agreement is the law governing the seat 

As the AA 1996 did not set out a way to determine which law would govern arbitration agreements, the common law rule under Enka v Chubb [2020] UKSC 38 was followed. The rule stated that the law governing arbitration agreements could be chosen expressly or impliedly by parties and would generally be the law chosen to govern the main contract. If there was no choice made, the governing law would be that which is closely connected to the parties. 

The AA 2025 overturns the common law rule to establish that, absent an agreement by the parties, the default governing law of the arbitration agreement now aligns with the governing law of the arbitration seat. Parties should therefore consider whether to add an express clause into their arbitration agreement to make expressly clear where the arbitration is to be seated, and whether a different law shall govern the arbitration agreement. In most cases, it is unlikely parties will consider this necessary. 

It is worth noting that the new approach aligns with the existing 2020 LCIA Arbitration Rules (article 16.4), which adopts the law of the seat by default, as opposed to the 2021 ICC Arbitration Rules and 2025 SIAC Rules, which do not. 

Sections 5 & 6: clarification of process to challenge jurisdiction of tribunal

A s.32 challenge to the court’s jurisdiction can only be invoked as an alternative to the tribunal ruling on its own jurisdiction

Under the AA 1996, a challenge to the tribunal’s jurisdiction can be made to the court after a tribunal’s ruling on its own jurisdiction through either a s.67 application, or a s.32 application for a determination on jurisdiction as a preliminary point. The s.32 procedure has not been widely used since the inception of the AA 1996, with parties generally preferring to go down the s.67 route. 

Under the AA 2025, the s.32 procedure can only be used instead of seeking a tribunal ruling; if the tribunal  has already ruled on its own jurisdiction, any challenge must be through s.67. Additionally, if the tribunal or court decide the tribunal has no jurisdiction and the arbitration proceedings shall terminate, the AA 2025 allows the tribunal to award costs of the proceedings up until that point.

Section 7: arbitrators’ power to make an award on summary basis

Arbitrators have the express power to make awards on a summary basis where a party has no real prospect of success

Under the AA 2025, arbitrators now have express power to make awards on a summary basis where a party has no real prospect of succeeding (where the threshold is the same as applied in court proceedings in England and Wales). The parties must be given reasonable time opportunity to make representations. 

Summary disposal is already provided for in some arbitration rules such as the ICC and 2020 LCIA Arbitration Rules (22.1) and it has always been open to parties arbitrating under different or no institutional rules to apply to a tribunal for an award on a summary basis However, there was some hesitancy by arbitrators to utilise these provisions in fear of due process challenges. The AA 2025 clarifies that summary judgment has proper legal grounding. 

Parties can opt out of this provision or adopt institutional rules which alter the standard of ‘no real prospect of succeeding’ to other wording, for example, ‘manifestly without merit’ as in LCIA Rules.

Section 8: emergency arbitrators 

An order made by emergency arbitrators can be converted into a court order

Some arbitral rules provide for the appointment of emergency arbitrators. The AA 1996, however, was silent on what happened when parties ignored orders from them. The AA 2025 confirms that parties can ask the English courts to convert a tribunal’s peremptory orders into court orders. 

The LMAA does not have procedure for emergency arbitrators, however parties choosing to arbitrate under LCIA or ICC rules, among others, may enjoy the benefit of this.

Section 9: third party rights and obligations

Court orders made to support proceedings can be made against third parties and third parties can appeal under section 44

Under s.44 of the AA 1996, unless parties otherwise agree, the court can make orders to support arbitration proceedings on certain matters including witness evidence, preservation of evidence, orders relating to property, sale of goods, interim injunctions and appointment of receivers. Under the decisions in A and B v C, D and E [2020] EWCA Civ 409, DTEK Trading SA v Morozon [2017] EWHC 1704 and Cruz City v Unitech [2014] EWHC 3704 (Comm), s.44 of the AA 1996 did not extend to third parties, aside from the power to take witness evidence. The AA 2025 confirms these court orders can now be made against third parties, who will also gain the right to appeal under s.44.

Third parties may be able to obtain court orders, such as anti-suit relief, by relying on the Contract (Right of Third Parties) Act 1999 (the “CRTA”). However, as per the case Manta Penyez Shipping and Uraz Shipping v Zuhoor Alsaeed Foodstuff Company [2025] EWHC 353 (Comm), this will be in only certain and limited circumstances, and as the judge noted, the CRTA is often expressly excluded by parties. 

The AA 2025 therefore creates a clearer framework for third party rights and obligations. 

Section 10: remedies for challenging an arbitration award 

Remedies available for s.67 appeals are extended to align with s.68 and s.69 remedies

The AA 1996 gives parties the right to challenge an arbitration award under s.67 (jurisdiction), s.68 (serious irregularity), and s.69 (point of law). Parties can opt out of the right of appeal under s.69 either expressly or by adopting institutional rules, such as the LCIA and ICC rules, which exclude the right of appeal.

On appeal, the court can remedy s.67 applications by confirming, varying or setting aside the award. As per additions made in AA 2025, the court can now also remit the award to the tribunal for reconsideration or declare the award of no effect (the award remains valid but becomes unenforceable). These additional remedies were already available for s.68 and s.69, so this corrects an inconsistency with the AA 1996. 

Section 11: procedure to challenge under s.67 (jurisdiction)

New objections or evidence cannot be raised in challenges to jurisdiction

Under the case Dallah v Pakistan [2010] UKSC 46, jurisdictional challenges to awards resulted in a full ‘de novo’ review by English courts. The AA 2025 introduces a more limited review where new objections cannot be raised unless they could not have been discovered with reasonable diligence during arbitration, new evidence can only be admitted if it could not have been submitted earlier with reasonable diligence, and previously submitted evidence will only be reviewed again if it is in the interests of justice. 

Section 12: time limits to challenge awards

Time begins to run for the purpose of applying for s.67, s.8 and s.69 appeals from the date of any award, correction of award, or additional award

Under the AA 1996, an applicant can apply under s.57 for a correction of an award to remove any mistake, error or ambiguity, or make an additional award where the claim was presented but not addressed in the award. An application must be made within 28 days. Applicants must first exhaust this recourse, as well as anything equivalent pursuant to agreement between the parties, before making a challenge to the award under s.67, s.68, or s.69. The time limit for appeals under these sections is 28 days.

The AA 2025 clarifies when time begins to run for s.67, s.68 and s.69 appeals. Where there has been a material correction or additional award under s.57, the time runs from date of correction or additional award (or if the application is rejected, from the time the applicant/appellant was notified of this). Where there has been an arbitral appeal or review, the time limit begins to run from the date the appellant/applicant was notified of the result. In any other case, time runs from the date of the award.

For example:

• In the case of X v Y, an arbitration award is published on 1 January. If one of the parties wishes to ask the tribunal to correct an error or issue an additional award, it must apply under s.57 by 29 January.
• X makes a s.57 application on 29 January, seeking a correction to the award.
• A correction of an award can be made within 28 days from the tribunal’s receipt of the application to correct (or in the case of an application for an additional award, the tribunal must issue an additional award within 56 days from the first award). The tribunal corrects the award on 26 February.
• X wishes to challenge under s.68, and they may do so now (as long as they have also exhausted other recourses, such as arbitral review). However, they must challenge by 26 March, being 28 days from the date of the correction.

Comment 

1. Largely, these changes are minor updates to the regime established by the AA 1996 and are unlikely to have a significant impact. Whilst the AA 2025 codifies and clarifies elements of common law following the AA 1996, the entirely new provisions are unlikely to result in a major shift in arbitration procedure under English law.
    
2. The changes to the s.67 appeal procedure may result in costs savings for parties as a result of the more streamlined approach in respect of evidence the Court will be prepared to consider, but the more limited review procedure should be noted.
    
3. The changes to the procedure for applying for a summary judgment may help parties to reduce costs in cases that can be dealt with swiftly. However, it has always been open to parties arbitrating to apply to a tribunal for an award on a summary basis. The new law may result in more summary judgment applications and whilst the threshold is clear in law, some applications may be made without merit. It may be that more institutional rules follow the LCIA in adopting the higher threshold of ‘manifestly without merit’ to avoid abuse of the summary judgment procedure.
    
4. The modest strengthening of the emergency arbitrator procedure is unlikely to have any substantial effect. Since the inception of the AA 1996, practitioners and parties have continued to seek emergency relief from the courts in matters that require immediate and urgent attention, and the courts have continued to accept jurisdiction in such circumstances and in support of underlying or anticipated arbitrations. This is unlikely to change.
    
5. From 1 August 2025, the provisions of the AA 2025 will apply to all arbitration agreements subject to English law, regardless of when the agreement was made. However, the AA 2025 will not apply to arbitration proceedings commenced before 1 August 2025, nor to related legal proceedings.
    
6. For parties involved in London maritime arbitration, the LMAA have stated that the AA 2025 works effectively in conjunction with the LMAA Terms 2021 and that they would consider the amendments when next updating the Terms, expected to be in 2026. However, the LMAA have noted the amendments are likely to have “little direct effect on maritime arbitration, because mostly they deal with matters already covered by the Terms and the current practice”.
   
   A missed opportunity?
    
7. The Law Commission, in its final report dated 5 September 2023, stated that it had considered reforming the procedure for appeals under s.69 AA 1996 (point of law). As noted above, parties wishing to have absolute finality of arbitration awards and efficient resolution of disputes can opt out of s.69. The conclusion of the Law Commission was that no reforms under s.69 were necessary and the existing regime strikes the right balance between efficient resolution of disputes and ensuring the law is applied consistently. This approach is likely to be welcomed.
    
8. However, practitioners and parties to arbitration may form the view that there was a significant missed opportunity to reform the default position under English law that a tribunal shall consist of a sole arbitrator, absent any agreement between the parties or adoption of institutional rules which provides to the contrary. Where parties are arbitrating under English law alone, without the addition of agreed rules or procedures, a party commencing arbitration must seek the agreement of the other party to the appointment of a sole arbitrator. In the absence of any such agreement, the commencing party must apply to the court requesting the appointment of a sole arbitrator to form a tribunal. This procedure can be time consuming and costly. The LMAA identified this issue some years ago and adopted a procedure whereby each party would appoint their own arbitrator, with the ability for one party to appoint their arbitrator as sole arbitrator in the event of the other party’s failure to make a valid appointment. Updating the law to support a more efficient process such as this may well be seen over time to have been a missed opportunity. 

The full text of the Arbitration Act 2025 is available here: https://www.legislation.gov.uk/ukpga/2025/4/contents