London's Arbitration Makeover: How the 2025 Act Fixes Real Problems for Real Practitioners

Authored by - Angelina Alyabyeva, Legal Associate, Compliance Advisor, Accredited European Commercial Mediator and Arbitrator

Evolution with Impact

After nearly three decades of service, the Arbitration Act 1996 has received its most significant upgrade yet. The Arbitration Act 2025, which gained Royal Assent on 24 February 2025, represents what Lord Ponsonby aptly described as "evolution not revolution"—but this evolution addresses genuine pain points that have frustrated practitioners for years. Rather than wholesale replacement, these targeted amendments tackle specific problems that arose in practice, particularly the chaos created by the Supreme Court's decision in Enka v Chubb and the uncertainty surrounding arbitrators' powers and immunity.

For practitioners who have navigated the complexities of London-seated arbitrations under foreign governing law, wrestled with frivolous claims lacking summary dismissal mechanisms, or watched arbitrators hesitate to make robust decisions due to liability concerns, the 2025 Act offers concrete solutions. This article examines how these reforms will change daily arbitration practice, supported by practical examples that illustrate their real-world impact.

Solving the Enka Chaos: A Practitioner's Relief

The most significant reform addresses the confusion created by Enka v Chubb regarding which law governs arbitration agreements. Before diving into the solution, it's worth understanding the practical nightmare that Enka created for London arbitration practitioners.

Consider a typical scenario: a construction contract between a UK contractor and a Chinese developer, governed by Chinese law but with London arbitration. Under Enka, the arbitration agreement would likely be governed by Chinese law, meaning that questions about the arbitration agreement's validity, scope, or enforceability would be determined under Chinese law principles. This created several practical problems.

First, English courts lost their familiar tools when dealing with the arbitration agreement itself. Provisions of the Arbitration Act 1996 that support and facilitate arbitration simply didn't apply when the arbitration agreement was governed by foreign law. Second, practitioners faced the expensive and time-consuming process of obtaining foreign law expert evidence on points that should have been straightforward under English arbitration law. Third, the uncertainty often led to satellite litigation about which law applied before even reaching the substantive arbitration agreement issues.

The 2025 Act cuts through this complexity with elegant simplicity. The new statutory rule provides that arbitration agreements are governed by the law of the seat unless parties make an express choice of law specifically for the arbitration agreement. Crucially, choosing Chinese law for the main contract does not constitute choosing Chinese law for the arbitration agreement.

Returning to our construction example: under the 2025 Act, the arbitration agreement would be governed by English law regardless of the Chinese law governing clause in the main contract. This means disputes about whether the arbitration agreement covers particular claims, whether it remains valid despite contract termination, or whether it binds non-signatories will all be determined under the arbitration-friendly principles of English law.

This reform eliminates a major source of uncertainty and expense. Practitioners can now confidently advise clients choosing London as their arbitral seat that they will receive the full benefit of English arbitration law's support, regardless of their choice of governing law for the underlying commercial relationship.

Summary Dismissal: A Long-Awaited Tool

The 2025 Act's grant of express summary dismissal powers to arbitrators addresses a longstanding frustration in London arbitrations. While English courts have possessed summary judgment powers for decades, arbitrators' ability to dismiss obviously meritorious claims or defences remained uncertain, leading to expensive and time-consuming proceedings where one party pursued clearly hopeless positions.

Consider a software licensing dispute where the licensee claims the licensor breached contract by failing to provide 24/7 technical support. The contract explicitly states that support is provided "during normal business hours only." Under the old regime, the tribunal might feel compelled to allow this claim to proceed through full evidential hearings, despite its obvious lack of merit, simply because no clear summary dismissal mechanism existed.

Under the 2025 Act, the tribunal can now grant summary dismissal if the claim has "no real prospect of success"—the same test applied by English courts. This familiar standard brings with it decades of judicial interpretation, providing tribunals with clear guidance on when summary dismissal is appropriate.

The practical benefits extend beyond time and cost savings. Summary dismissal powers should discourage tactical use of frivolous claims and defences. Parties can no longer assume that raising numerous weak arguments will create settlement pressure through increased costs and delay. This should lead to more focused pleadings and more efficient arbitrations overall.

The Act includes important procedural safeguards: applications must be made on notice, and parties must have a reasonable opportunity to respond. This ensures that summary dismissal remains an exceptional remedy while providing tribunals with the tools to manage clearly unmeritorious positions effectively.

Strengthened Arbitrator Immunity: Encouraging Robust Decision-Making

The enhanced arbitrator immunity provisions address practical concerns that deterred qualified individuals from accepting arbitrator appointments or encouraged overly cautious decision-making. The previous regime's gaps created unnecessary risks for arbitrators, particularly regarding resignation and removal applications.

Take the example of an arbitrator who discovers, mid-arbitration, that their law firm represented one of the parties five years ago in an unrelated matter. Under the old law, resigning to avoid any appearance of conflict could potentially expose the arbitrator to liability claims from the parties for disrupting the proceedings. This created a no-win situation: continue and face potential challenge for apparent bias, or resign and face potential liability claims.

The 2025 Act resolves this dilemma by protecting arbitrators from liability for resignation unless the resignation was "unreasonable in all the circumstances." This provides arbitrators with necessary flexibility to withdraw when appropriate while preventing abuse through unnecessary resignations.

Similarly, the Act addresses concerns about removal applications. Previously, an arbitrator could be ordered to pay the costs of even unsuccessful removal applications, creating a chilling effect on robust decision-making. Under the new regime, arbitrators can only be ordered to pay such costs if their conduct was shown to be in bad faith.

These changes should encourage more experienced practitioners to accept arbitrator appointments and support more decisive tribunal management. Arbitrators can now make tough procedural decisions and robust substantive rulings without excessive concern about personal liability consequences.

Emergency Arbitrator Powers: Closing a Practical Gap

The 2025 Act's recognition of emergency arbitrator peremptory orders fills a significant gap in the previous legislation. Emergency arbitration has become increasingly important—ICC emergency arbitrator applications increased from six in 2013 to twenty-eight in 2023—but the Arbitration Act 1996's silence on enforcement created practical uncertainties.

Consider an emergency arbitrator order requiring a party to maintain the status quo pending constitution of the full tribunal. Under the old law, if the party simply ignored the order, the legal mechanism for enforcement remained unclear. This uncertainty undermined the effectiveness of emergency arbitration as a tool for urgent relief.

The 2025 Act explicitly empowers emergency arbitrators to issue peremptory orders and seek court support for enforcement. This creates a clear enforcement pathway: emergency arbitrator issues initial order, then peremptory order if ignored, then court enforcement if necessary.

This reform should significantly enhance the attractiveness of London for time-sensitive disputes where emergency relief may be necessary. Parties can now confidently include emergency arbitrator provisions in their arbitration clauses knowing that resulting orders will have clear enforcement mechanisms under English law.

Restricted Jurisdiction Challenges: Focusing Section 67 Applications

The new restrictions on Section 67 jurisdiction challenges represent a significant procedural reform designed to prevent abuse while maintaining appropriate oversight. These changes address the problem of parties using jurisdiction challenges as a second bite at the apple, raising new arguments or evidence that could and should have been presented to the tribunal.

The practical impact becomes clear through example. Suppose a tribunal determines it has jurisdiction over claims against a subsidiary company based on alter ego arguments. The losing party previously could challenge this determination in court by raising entirely new piercing-the-veil theories or introducing fresh evidence about corporate structure that was available during the arbitration but not presented.

Under the 2025 Act, such tactics are generally prohibited. Parties cannot raise grounds for objection they didn't present to the tribunal unless they couldn't have reasonably discovered them during the arbitration. Similarly, new evidence is generally excluded unless it couldn't have been reasonably obtained earlier.

This reform should significantly streamline jurisdiction challenges, reducing costs and delay while maintaining the court's supervisory function. Parties must now put their best case to the tribunal initially rather than holding arguments in reserve for potential court challenge.

The "interests of justice" exception provides necessary flexibility for genuinely exceptional cases, but the default position clearly favors finality and efficiency in jurisdictional determinations.

Codified Disclosure Duties: Clarifying Best Practice

While the codification of arbitrators' disclosure duties may seem like the least revolutionary change, it provides important clarity and brings English law into line with international best practice. The previous common law position, established in Halliburton v Chubb, required disclosure of circumstances that might reasonably give rise to justifiable doubts about impartiality, but lacked statutory certainty.

The practical benefit lies in clarity of timing and scope. The Act specifies that disclosure must occur "as soon as reasonably practical" after appointment approaches, with ongoing duties as circumstances change. This removes ambiguity about when disclosure obligations arise and continue.

For arbitrators, this provides clear guidance on professional obligations. For parties and counsel, it establishes clear standards for evaluating potential conflicts and challenging appointments where appropriate.

Practical Implementation and Future Impact

As practitioners prepare for the 2025 Act's implementation, several practical considerations emerge. First, arbitration clauses should be reviewed to ensure they capture the benefits of these reforms. Clauses explicitly incorporating emergency arbitrator procedures and summary dismissal powers may be advisable.

Second, case management strategies should evolve to take advantage of new tools. Early applications for summary dismissal of weak claims or defenses should become standard practice where appropriate. Emergency arbitrator procedures should be considered more routinely for time-sensitive disputes.

Third, jurisdiction challenge strategies require fundamental reconsideration. Parties must present their strongest jurisdictional arguments to tribunals initially rather than reserving them for potential court challenges.

Evolution with Purpose

The Arbitration Act 2025 demonstrates that evolutionary change can be highly effective when it targets genuine practical problems. By solving the Enka chaos, providing arbitrators with necessary tools and protection, and streamlining challenge procedures, these reforms address real frustrations experienced by arbitration practitioners.

The cumulative effect should be more efficient, cost-effective arbitrations with greater certainty about applicable law and procedures. While these changes represent evolution rather than revolution, their practical impact on London arbitration practice will be substantial and beneficial.

For practitioners, the message is clear: London arbitration just became more attractive, more efficient, and more practical. The 2025 Act ensures that London's position as a leading arbitration center remains secure well into the future.