Arbitration Act: What the new laws mean for your business

The UK’s ability to compete with the international arbitration market has been given a significant boost, with the first substantial change to the law in almost three decades.

Updating key parts of the previous 1996 Act, the Arbitration Act 2025 came into force on 1 August 2025, applying for all arbitration proceedings and related court proceedings that begin on or after that date, within England, Wales and Northern Ireland.

Whilst not reinventing the wheel, the Act seeks to modernise the arbitration framework and, in particular, reinforce London’s status as a leading global seat of international dispute resolution.

Alastair Govier, Partner in Thrings’ Commercial Dispute Resolution team, takes a look at what you need to know:

Why was the 1996 Act in need of updating?

The existing Arbitration Act has been in place for 29 years. Over that time, global competitors such as Singapore, Paris, Hong Kong and other arbitration‑friendly centres have modernised their laws and procedures.

London’s arbitration market – for disputes under international contracts, often governed by LCIA, ICC or UNCITRAL rules – remained strong but risked losing ground without refinements to align with modern practice.

A review by the Law Commission, published in 2023, concluded that wholesale reform wasn’t needed. Instead, a targeted set of improvements would help maintain the UK’s competitive edge – while keeping the core strengths of the 1996 Act intact.

What are the key features of the new Act?

The 2025 Act introduces a range of specific reforms. Among the key changes are:

• Statutory duty of arbitrator disclosure: Arbitrators must now disclose any facts or relationships that might reasonably raise doubts about their impartiality.
• Summary disposal power: Arbitrators can now summarily dismiss a claim or defence that clearly has no real prospect of success – similar to summary judgment in court proceedings.
• Governing law of the arbitration clause: Unless parties expressly agree otherwise, the law governing the arbitration agreement itself will default to the law of the arbitration “seat” (e.g. England & Wales), regardless of the law governing the wider contract.
• Improved framework for jurisdiction challenges (section 67): Parties challenging an award on jurisdiction must now rely on arguments and evidence previously before the tribunal – new issues or rehearing will be allowed only in exceptional circumstances, promoting finality and efficiency.
• Stronger arbitrator immunity: arbitrators are protected against liability for resignation (unless the resignation is unreasonable) and for removal applications, unless bad faith is shown.
• Court powers clarified: courts now have expressly confirmed powers to support arbitration by making interim orders – including converting emergency arbitrator orders into enforceable court orders, and ordering measures against third parties where needed.

Why does this matter to UK businesses?

In refreshing the legislation, the Act seeks to improve the UK’s competitive edge as the go-to location for global arbitration.

Among the key reasons for this is the streamlining of procedures and clearer jurisdiction rules allowing for faster and cheaper dispute resolution.

The changes also encourage greater certainty and transparency by clarifying governing law and formalising an arbitrator’s disclosure duties, which is intended to reduce the risk of procedural wrangling and potential conflicts down the line.

It is important to remember, however, that these changes apply only to arbitrations and related court proceedings commenced from 1 August 2025 onward, with existing arbitrations or ongoing court actions remain governed by the 1996 rules.

Parties also remain free to override summary disposal or other powers in their arbitration clauses if they prefer more control.

What should you be doing now?

If your business uses or is interested in using arbitration for dispute resolution as an alternative to courts, especially in international commercial or construction contracts, here’s what to consider:

• Review and update standard contract templates to ensure your arbitration clause will be valid, effective and binding. It needs to specify your choice of seat for the arbitration and governing law that applies to the clause.
• Consider whether you want to exclude summary disposal or other tribunal powers in your arbitration clause, as some parties may prefer to retain full control over procedural issues.
• Check arbitrator appointment panels or pre‑agreed panels, and ensure prospective arbitrators understand the new statutory disclosure regime.
• If a dispute arises from August 2025 onwards that is referred to arbitration, consider whether you can take advantage of summary disposal or emergency orders early, where appropriate.
• Take legal advice early on for any arbitration matter – whether negotiating a contract or responding to a claim – to make sure you can take full advantage the new statutory framework.

Thrings’ Commercial Dispute Resolution lawyers have an outstanding track record in achieving success in court, also offering expertise in mediation, pre-action work, settlement negotiations and arbitration to deliver commercially focused solutions to minimise disruption to your business. Contact us to find out more.