The Arbitration Act 2025 (the AA 2025), which amends the previous arbitration regime under the Arbitration Act 1996 (the AA 1996), received Royal Assent on 24 February 2025.
The AA 2025 introduces a number of refinements to the arbitration regime in England and Wales but the key aspects to note are as follows:
- The changes which the AA 2025 introduces will apply to all arbitral proceedings seated in England and Wales commenced after the Act comes into force (subject to certain transitional provisions). This is irrespective of when the relevant arbitration agreement was entered into and will therefore apply to agreements pre-dating the AA 2025.
- The AA 2025 clarifies the position regarding choice of law. The previous position at common law engaged various issues of contractual interpretation, whereas the AA 2025 provides that the governing law for the arbitration will be determined by its seat (absent express agreement to the contrary). The introduction of this amendment is to be welcomed as it clarifies the position and should reduce potentially costly satellite litigation, such as last year’s judgment in UniCredit Bank GmbH v RusChemAlliance LLC.
- The AA 2025 codifies the common law duty of impartiality for arbitrators, both prior to and after the commencement of arbitral proceedings. As part of this duty, arbitrators are required to disclose circumstances which “might reasonably give rise to justifiable doubts as to the [arbitrator’s] impartiality”. It is notable that this duty of disclosure is slightly wider than under the common law regime and requires arbitrators to disclose circumstances of which they “ought reasonably” to be aware (rather than just circumstances within their actual knowledge).
- Subject to the parties’ agreement to the contrary, arbitrators are given the express power to determine issues with no real prospect of success on a summary basis. This will enable the efficient disposal of unmeritorious claims or defences and has the potential to save substantial time and costs for parties.
- The position of emergency arbitrators is strengthened by providing them with the same means as regular arbitrators to make peremptory orders and give parties permission to apply for a Court order. This should increase confidence in emergency arbitrators and encourage compliance with their decisions.
The AA 2025’s refinements to the arbitral process are designed to streamline arbitral proceedings and ensure that London remains one of the leading forums for arbitrations. Its introduction is to be welcomed.
Authors:
Lizzie Williams, partner
Dennis Brunner, senior associate