Arbitration Act 2025 | Key Changes Making Arbitration Easier and More Effective

The Arbitration Act 2025 (“2025 Act”) officially came into force on 1 August 2025, bringing important updates to the Arbitration Act 1996. These changes aim to make arbitration a clearer, more efficient, and even more attractive option for resolving disputes without going to court.

For clients and businesses, this means a faster, more streamlined process with stronger powers for arbitrators and fewer procedural hurdles — making arbitration an increasingly viable alternative to court proceedings.

The 1996 Act has stood the test of time very well, but some changes were necessary to be made. We explore some of these changes below.

What is Arbitration?

Arbitration is a private method of resolving disputes where the parties agree to have their case decided by an independent decision-maker, called an arbitrator, instead of going to court.

• It is confidential, unlike most court proceedings.
• The arbitrator’s decision, known as an award, is legally binding.
• The process is flexible, often faster than litigation, and can be tailored to suit the parties’ needs.

Because arbitration takes place outside the court system, it can save time, reduce costs, and provide more control over how the dispute is managed.

5 key changes to the Arbitration Act

1. Clearer Rules on the Governing Law of Arbitration Agreements

A new default rule now applies - unless both parties agree otherwise, the law of the seat of arbitration will govern the arbitration agreement.

This change overturns the previous position from the case Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020], which could apply the law of the main contract instead.

This new rule promotes transparency and consistency which will help in reducing the potential disputes over the governing law of the arbitration agreement.

2. Power for Summary Disposal of Weak Claims

For the first time, arbitrators now have explicit powers to summarily dismiss claims or defences that have no real prospect of success.

This aims to streamline the process and address concerns about potential meritless claims.

3. Stronger Court Support for Arbitration

The 2025 Act strengthens court powers to:

• Enhance emergency arbitrator orders
• Issue orders against third parties in support of arbitration
• Streamline the process of challenging arbitration jurisdiction

4. Streamlined Jurisdictional Challenges

The new act introduces a more constrained review process.

If a tribunal has already ruled on jurisdiction and both parties participated, the High Court will only consider new evidence or grounds if they could not have been raised earlier. In addition, the court will not re-hear evidence that was already heard by the tribunal, except in the interest of justice.

This prevents unnecessary “re-runs” of cases, previously criticised for inefficiency and unfairness, ensuring a quicker and more cost-effective process.

5. Enhanced Arbitrator Duties and Protections

The 2025 Act includes amendments related to the role of the arbitrator. It is designed to improve the process of arbitration making the process fairer and more reliable for everyone involved.

• Duty of Disclosure - Arbitrators now have a legal duty of disclosure on any matter which may give rise to any doubts about their impartiality. This is a mandatory duty and cannot be amended or waived.
• Expanded Immunity - Arbitrators are now better protected from cost orders unless they act in bad faith.

What This Means for Dispute Resolution in England & Wales

The Arbitration Act 2025 strengthens and protect the status of England and Wales as a predominant forum for arbitration globally. By modernising the rules, enhancing arbitrator powers, and reducing procedural delays, it ensures arbitration remains a practical, effective, and respected method of resolving disputes.

Why This Matters for You

Arbitration can be a cost-effective, private, and flexible way to resolve disputes. With these updates, arbitrators have clearer rules to follow, better tools to deal with unmeritorious claims, and stronger legal backing to ensure fair and efficient outcomes.

If you are involved in a commercial or contractual dispute, arbitration may now be an even more attractive alternative to court proceedings.

Need advice on arbitration?

Our experienced dispute resolution team can guide you through the arbitration process, whether you’re drafting an agreement or already facing a dispute.

Contact us today to discuss how the Arbitration Act 2025 could work to your advantage.