The Arbitration Act 2025 received royal assent yesterday, as much-welcomed legislation aims to bolster the UK’s position as a destination of choice for arbitration. 

The act sprang from a Law Commission review of the Arbitration Act 1996, which proposed refinements to the 25-year-old legislation. It aimed to maintain arbitration’s status as a cost-effective and efficient alternative for businesses to traditional court proceedings, reinforcing Britain’s reputation as a preferred venue for dispute resolution. 

According to the Ministry of Justice, at least 5,000 domestic and international arbitrations occur in England and Wales annually, contributing a minimum of £2.5bn to the UK economy in fees alone. It said the number of arbitrations had grown by 26% between 2016 and 2020, with institutions like the London Court of International Arbitration and the Chartered Institute of Arbitrators (CIArb) benefiting as a result.

Legal services minister Sarah Sackman KC said: “The UK’s legal sector contributes billions to the economy and employs hundreds of thousands nationwide. Companies worldwide look to the UK for their legal services and dispute resolution. This new act ensures that arbitration law keeps this country ahead of the rest and supports economic growth.”

The new law aims to make arbitration fairer and more efficient while seeking to lower costs and protect arbitrators from unreasonable legal actions by simplifying procedures. Additionally, it enhances the courts’ capabilities to support emergency arbitrations, facilitating prompt decisions in time-sensitive situations.

It identifies areas where case law has indicated the necessity for reform, such as explicitly allowing courts to issue orders under the act requiring witnesses and other third parties to a dispute to provide evidence.

Edward Attenborough, a partner at White & Case, said one key amendment established a new statutory default rule concerning the law governing arbitration agreements. According to this rule, if the parties have not explicitly agreed on the applicable law, the law of the arbitration seat will govern the agreement. 

This change, said Attenborough, “should all but eliminate previous uncertainty over which law governs an agreement to arbitrate, and the expensive satellite litigation to which that could give rise”.

Secondly, the act allows for the introduction of court rules to limit challenges to awards for lack of jurisdiction under the 1996 act.

Attenborough explained: “Where a tribunal has already ruled on an objection to its substantive jurisdiction, parties will be prevented from relying on new grounds or evidence before the English courts (unless necessary in the interests of justice).” 

Once implemented, this would help reduce any duplication of proceedings challenging jurisdiction before arbitral tribunals and the courts and associated costs and delays, Attenborough said.

George Burn, co-head of arbitration at BCLP, welcomed the act, although he regretted the fact it was silent on confidentiality.  

He said: “Knowing that arbitration will be confidential is valuable to many businesses which opt for it. Common law principles apply, but some jurisdictions have addressed confidentiality in statutory form. Embedding a presumption of privacy in the Arbitration Act would have been a positive move.” 

Cristen Bauer, head of policy at CIArb, noted the act had adopted all of the Law Commission’s recommendations. “We look forward to seeing the positive impact of the Arbitration Act 2025 for many years ahead,” she added. 

Similar sentiments were expressed by London International Disputes Week co-chair, Professor Loukas Mistelis, of Clyde & Co, who said that assent was “the final step in a process that brought together the entire arbitration community in London” in modernising the 1996 act “while maintaining all the distinct features of English law which the international arbitration community has come to appreciate over the years”.