Introduction
The substantive provisions of the Arbitration Act 2025 (the “2025 Act”) came into effect on 1 August 2025 via the Arbitration Act 2025 (Commencement) Regulations 2025. The 2025 Act amends the Arbitration Act 1996 following a Law Commission review aimed at reinforcing London’s position as a centre for international arbitration and aligning UK arbitration law with recent global reforms.
Key Changes
Governing Law of the Arbitration Agreement: The 2025 Act introduces a new default rule to address situations where parties have not expressly chosen the governing law for their arbitration agreement. The law of the arbitration seat will now apply. This reform provides much-needed clarity and predictability, replacing the previous, more complex common law approach from the case of Enka v. Chubb Russia and Chubb Europe1. This case had established a presumption that the governing law of the main contract would also apply to the arbitration agreement, which could lead to uncertainty. The new rule ensures that the main contract’s law will not automatically govern the arbitration agreement unless specifically agreed upon by the parties.
Statutory Duty of Disclosure and Arbitrator Immunity: The Act codifies a formal duty of disclosure for arbitrators, requiring them to disclose any circumstances that might reasonably raise doubts about their impartiality. This duty is continuous, applying both before and after their appointment, and reinforces the principles established by the Supreme Court in the landmark case of Halliburton v. Chubb Bermuda2. Additionally, the Act expands arbitrator immunity from liability. Arbitrators are now protected from liability for costs arising from removal proceedings unless bad faith is proven. They are also shielded from liability if they resign, provided the resignation is not deemed unreasonable.
Summary Awards and Emergency Arbitrators: To improve the efficiency of arbitral proceedings, the Act introduces two key procedural changes. First, arbitral tribunals can now issue summary awards for claims or defenses that have no real prospect of success, though parties retain the right to opt out of this power. Second, the Act officially recognizes the role of emergency arbitrators, whose urgent, pre-tribunal orders can now be enforced by courts. This gives parties a more effective way to seek interim relief before a full tribunal is constituted.
Court Powers Over Third Parties and Jurisdictional Challenges: The Act clarifies and enhances the supportive role of courts in arbitration by confirming their power to make orders affecting third parties, such as for preserving or gathering evidence. This change brings arbitration proceedings more in line with litigation and provides third parties with a clear right to appeal these orders. The process for challenging a tribunal’s jurisdiction has also been streamlined. A party can now seek a court ruling on jurisdiction only before the tribunal has ruled, and after the tribunal’s decision, court challenges are limited. This restriction, which generally prevents the introduction of new evidence or grounds for objection, aims to reduce delays and costs.
Conclusion
The Arbitration Act 2025 marks a strategic evolution of UK arbitration law, introducing key reforms that provide greater certainty and integrity, a goal shared by India’s arbitration framework, albeit through a distinct approach. While the UK Act now codifies a clear default rule that the law of the arbitration seat governs the arbitration agreement, Indian law has long held a similar pro-arbitration stance, establishing the juridical seat as the center of gravity for determining the law of the agreement through a series of judicial precedents. In terms of procedural enhancements, the new UK Act explicitly recognizes and empowers tribunals to issue summary awards and confirms the role of emergency arbitrators with court enforcement powers. In contrast, India has achieved similar outcomes through a more judicial path, with the Supreme Court, particularly in cases like Amazon v. Future, affirming the legitimacy and enforceability of emergency arbitrator awards. Both jurisdictions have a strong focus on arbitrator integrity and immunity, with the UK’s new statutory duty of disclosure aligning with established principles in Indian law, and both offering protections for arbitrators. Ultimately, while the UK’s Act provides a clear, consolidated legislative framework, India’s evolving jurisprudence showcases a dynamic, court-driven approach to adapting its laws to meet global standards. Both paths reinforce the importance of certainty, efficiency, and fairness, ensuring that both jurisdictions remain competitive and attractive for international dispute resolution.
Citations
- Enka v. Chubb Russia and Chubb Europe [2020] UKSC 38, 9 October 2020
- Halliburton v. Chubb Bermuda[ 2020] UKSC 48, 27 November 2020
Expositor(s): Adv. Archana Shukla
