1 week Ago By Marco Zingaro
Catherine Penny, Partner, and Lorna Sleave, Managing Associate, at Stevens & Bolton, have provided an important commentary on the recent reforms introduced by the Arbitration Act 2025 in the UK. Through their analysis, Penny and Sleave explore the significant impacts of the new legislative provisions and discuss the implications for the future of international arbitration in the UK.A significant milestone for arbitration in the UK was reached when the Arbitration Act 2025, a much-anticipated update to the UK arbitral framework, received Royal Assent on 24 February 2025.
This followed detailed consultation and reporting by the Law Commission to identify areas for potential reform.What are the key impacts?The objectives of the reform seem clear and were discussed widely leading up to the Act becoming law. In an increasingly competitive market for international dispute resolution, the UK must demonstrate it offers a modernised, efficient arbitration process to attract international business.
The reforms do not signal a total change of approach as the Law Commission’s work recognised that this was not wanted or necessary in the UK. In short, despite being enacted nearly 30 years ago, the consultation concluded the Arbitration Act 1996 was ultimately working well in practice. Nonetheless, while not a dramatic shift, the reforms have the potential to improve the legislative framework and put the UK in an advantageous position to remain at the forefront of global dispute resolution.
One noteworthy provision is the inclusion of the power for arbitrators to make summary judgment decisions in claims where a party has no real prospect of succeeding. As a provision already included in the rules of many arbitral institutions, this subject has been discussed by arbitration practitioners for some time and the introduction of this measure seems an attractive move. This is not only an important change to the framework but also synchronises arbitral practice with the remedies available in litigation in the UK.
How has this been shaped by recent decisions?Another interesting aspect of the legislation is the implementation of changes to the framework to reflect issues that have arisen in recent cases, showing the law actively adapting. Two 2020 Supreme Court decisions, Enka v Chubb and Halliburton v Chubb, and the potential impact of both cases has been considered. The new legislation codifies that, unless the parties have agreed otherwise, the arbitration agreement will be governed by the law of the seat.
This represents a significant update since the Supreme Court determined the question of the law applicable to arbitration agreements in the Enka decision. This change will be welcomed by many as it maintains party autonomy but brings clarity to the position where the Enka decision had introduced the potential for satellite litigation and uncertainty. Similarly, the new legislation codifies the scope of arbitrators’ duties in relation to disclosure and specifies that arbitrators should disclose any circumstances which might reasonably give rise to justifiable doubts as to their impartiality, an issue considered in Haliburton.
A missed opportunity?The update has received a positive reception in the arbitration community and improves the arbitral processes in this jurisdiction, both for domestic and international parties. Nonetheless discussion has continued around areas not included in the final legislation and led to debate about whether opportunities have been missed. Another recent case that provoked wide commentary was Nigeria v P&ID, a judgment which raised difficult questions for the arbitration world.
This prompted debate about whether the Act should deal expressly with corruption in arbitration and include a provision aimed at prevention. It is difficult to envisage how such a measure would have operated, and the legislature concluded there were sufficient safeguards in place but there is little doubt that this was an important discussion. The Law Commission also concluded confidentiality was already safeguarded in law and an express provision was not needed, an interesting point of discussion when comparing the UK with other jurisdictions.
Rightly or wrongly, England & Wales has not changed section 69 of the Arbitration Act which allows for appeals of an arbitral award on a point of law (although parties can opt out of this), and assuming the applicable law is English law. The possibility of having the backup of an English High Court judge reviewing an award is likely to give some comfort to some parties. It may also put some parties off, which is why it is on an ‘opt in’ basis.
Whether a party is likely to want to depend on this right to appeal all depends on whether your tribunal made the “right” decision, which goes back to the all-important feature of arbitration: arbitrator selection, that and the merits of your claim of course.Where is arbitration in the UK headed next?A wide range of potential reforms was considered and debate may continue about which were ultimately selected (or not) for the legislation. The government has confirmed it will introduce regulations to implement the new legislation as soon as practical and, pending implementation, the impact of new provisions ultimately remains to be seen.
There is clearly room for interpretation across the new legislation and arbitration practitioners will be closely watching to see how the new provisions operate on the ground. Nonetheless the legislation represents a positive step forward for the legislative framework and positions the UK well to remain at the forefront of global dispute resolution. Stevens & Bolton is an independent UK law firm with around 150 lawyers, approximately a third of them partners, many of whom chose to join us from City law firms.
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