New Arbitration Act for England and Wales and Northern Ireland
On 24 February 2025, the Arbitration Act 2025 (the “New Act”) received Royal Assent. Note that the New Act applies to England & Wales and Northern Ireland and not to Scotland, which has its own Arbitration (Scotland) Act 2010. The New Act is not yet in force.
The New Act modernises the Arbitration Act 1996 following two public consultations and recommendations made by the Law Commission. Although there was broad consensus that the 1996 Act was working well, the New Act aims to boost London’s reputation as a global leading centre for international arbitration.
Changes include the following:
Summary dismissal: parties can apply to arbitral tribunals for early dismissal of claims that have no real prospect of success.
Law of the arbitration agreement: if there is no choice of law agreement, the governing law of the arbitration agreement will be the law of the seat of the arbitration unless the parties agree differently. Thus parties have the certainty that English law applies, rather than in some cases having to spend time and incur cost determining which law governs the arbitration agreement.
Arbitrators’ duty of disclosure: There is now a statutory duty on arbitrators to disclose any circumstances that might cause there to be doubts about their impartiality. This change codifies the test in Halliburton v Chubb [2020] UKSC 48.
Challenges to the courts for lack of jurisdiction: The amendments to the New Act open the way for new court rules to stop jurisdictional challenges becoming full new hearings and restrict parties from introducing new grounds of claim or fresh evidence.
Emergency arbitrators: the powers of emergency arbitrators have been clarified, among other things by granting them authority to issue peremptory orders (peremptory orders are orders or directions made by an arbitrator which repeat earlier orders or directions that have not been complied with, without satisfactory cause. Peremptory orders fix a deadline for compliance and are enforceable by the court).
Arbitrator immunity when an arbitrator resigns and applications for removal: the changes in the New Act give greater protection to arbitrators against liability resulting from resignation or removal.