Posted by Catherine Penny, a partner, and Lorna Sleave, senior associate, at Surrey firm Stevens & Bolton
Catherine Penny
The Arbitration Act, which received Royal Assent [1] on 24 February 2025, updates the UK legislative framework for arbitration.
A key objective is to increase the efficiency of the arbitration process, ensuring the UK is well placed to continue competing in the global dispute resolution market.
This is reflected in one of the notable inclusions in the legislation – the power for arbitrators to make summary judgment decisions, a provision already seen in the rules of many arbitral institutions.
Introducing this remedy in claims where a party has no real prospect of succeeding also mirrors the remedies available in litigation and seems an attractive move.
Other changes include clarifying the law applicable to arbitration agreements, amending the court’s powers in support of arbitral proceedings and emergency arbitrators, and codifying arbitrators’ duty of disclosure in respect of impartiality.
Another point that emerges from the legislation, including some of these changes, is that the framework is adapting to issues that have arisen from recent case law.
It confirms that the arbitration agreement will be governed by the law of the seat unless the parties have agreed otherwise, maintaining party autonomy. This changes the position significantly from the 2020 Supreme Court decision in Enka v Chubb.
Although the Enka case determined the question of ascertaining the correct governing law, it also brought complexity and uncertainty to the arbitral process and led to the potential for satellite litigation.
Similarly, the case of Halliburton v Chubb, also decided by the Supreme Court in 2020, considered the scope of the duty on arbitrators in relation to disclosure. The new legislation codifies the principles in that case and specifies that arbitrators should disclose any circumstances which might reasonably give rise to justifiable doubts as to their impartiality.
What was not included?
Despite these benefits, discussion has continued about reforms that were not included and if they represent a missed opportunity.
The underlying Law Commission review considered the adoption of express provisions about confidentiality. Ultimately it was concluded this was already covered by English law so the issue was not taken forward but, given this is covered in arbitration laws in other jurisdictions, it warrants some thought.
Following the case of Nigeria v P&ID [2], there was debate during the bill’s passage through Parliament [3] about whether it should contain a provision about preventing corruption in arbitration, arguably a more difficult point to implement in practice.
While the legislature concluded there were already sufficient safeguards, the issue raised interesting questions, not only in the arbitration context but dispute processes more widely.
Lorna Sleave
The future landscape
The Law Commission’s review concluded that wholesale reform of the Arbitration Act 1996 was not wanted or needed, and the legislation was fundamentally working well in practice despite becoming law nearly 30 years ago.
As announced by the government, the new legislation will be implemented via regulations as soon as possible, and arbitration professionals will be eager to observe how the new provisions function in practice.
Clearly there is some scope for interpretation issues in the new provisions, for example how the arbitrators’ duty of disclosure will apply across different sectors, and further law will undoubtedly develop.
Nonetheless the changes are a welcome update to the legislative framework and put the UK in a good position to remain at the forefront of global dispute resolution.