English Arbitration Act 2025 Reforms: Modernising London's Arbitration Framework

English Arbitration Act 2025 Reforms: Modernising London’s Arbitration Framework

In our International Arbitration Forum session, experts Velimir Zivkovic, Matej Pustej, and Michail Risvas discussed the significant reforms to the English Arbitration Act 1996, which received royal assent in February 2025. The discussion was a comprehensive analysis of how these “evolutionary, not revolutionary” changes position London to maintain its competitive edge as a leading global arbitration center.

Background and Context

The reform process began in 2021 when the UK government tasked the Law Commission with ensuring the English Arbitration Act remained at the leading edge of arbitration legislation worldwide. This initiative was partly spurred by legislative changes in rival jurisdictions including Singapore, Switzerland, and Germany. After extensive stakeholder consultation, the Law Commission issued recommendations in 2023, leading to the Act’s adoption in early 2025.

The reforms govern arbitrations seated in England, Wales, and Northern Ireland, with Scotland maintaining its separate arbitration framework. Given London’s prominence as an international arbitral seat, these changes carry significant implications for the global arbitration community.

Key Reform Areas

Law Applicable to Arbitration Agreements

The most headline-grabbing change establishes a clear presumption regarding the law governing arbitration agreements. The Act now explicitly states that unless parties expressly choose otherwise, the law of the arbitral seat will govern the arbitration agreement—even when the main contract is governed by different law.

“If the parties choose London as the seat of arbitration and do not specify what law applies to the arbitration agreement, then English law will apply,” the experts explained. This presumption can only be displaced by an express choice of law specifically for the arbitration agreement itself.

The reform addresses previous uncertainty while serving London’s competitive interests. As one participant noted: “There is an element of self-serving there—so many arbitrations are in London, and instituting this presumption will obviously increase the number of agreements subject to English law.”

However, practical challenges remain. Commercial parties rarely negotiate arbitration clauses extensively, and explicit choices of law for arbitration agreements are virtually non-existent in practice. This could create surprises for international parties who choose London arbitration while governing their contracts under non-English law.

Summary Dismissal Powers

Tribunals now have explicit authority to issue summary decisions on issues with “no real prospect of success”—borrowing the standard from English litigation. This power was potentially implicit before but lacked certainty, limiting its practical application.

The reform addresses growing concerns about arbitration efficiency as proceedings become increasingly complex and expensive. “We have been saying that arbitration compared to litigation is cheap and fast and effective, but this has become less obvious in recent years,” participants observed.

While similar mechanisms exist in some arbitration rules, the transplant from English litigation to the international arbitration context presents implementation questions. The provision may prove particularly useful for dismissing weak jurisdictional challenges, which are commonly raised as delaying tactics.

Challenges to Jurisdictional Decisions

The Act streamlines court challenges to tribunal decisions on jurisdiction under Section 67. The key restrictions now include:

No new grounds that weren’t raised before the tribunal
No new evidence not previously introduced
No rehearing of evidence already presented to the tribunal

These limitations aim to prevent full retrials of jurisdictional issues before English courts, with exceptions only where parties couldn’t reasonably have known about grounds or evidence earlier. A general “interests of justice” exception provides flexibility for exceptional circumstances.

“The idea is very clear: no new grounds, no new evidence, no rehearing. This is simply the court having a second look at the law and trying to figure out if the tribunal really got it wrong,” the experts explained.

International Comparative Perspective

The reforms reflect broader trends toward making arbitration more efficient and competitive. Switzerland’s reputation for short, efficient annulment proceedings demonstrates how procedural improvements can enhance a jurisdiction’s attractiveness as an arbitral seat.

However, some provisions appear uniquely English. The presumption favouring seat law for arbitration agreements particularly stands out, with practitioners noting they weren’t aware of similar express rules in other jurisdictions. This distinctiveness may require awareness-raising among international parties to avoid unexpected outcomes.

Practical Implementation Challenges

While the reforms aim to enhance clarity and efficiency, practical challenges remain. The summary dismissal mechanism’s popularity will depend on practitioner familiarity and cultural adaptation. Non-English lawyers may need time to understand and utilize procedures borrowed from English litigation.

The jurisdictional challenge reforms should prove more immediately beneficial, as preventing retrials addresses a clear source of delay and expense in arbitration proceedings.

Strategic Implications

These reforms represent a calculated effort to maintain London’s competitive position in the global arbitration market. By addressing efficiency concerns while providing greater legal certainty, the changes aim to reinforce London’s advantages as an arbitral seat.

The reforms acknowledge that arbitration’s traditional selling points—speed, cost-effectiveness, and efficiency—require active maintenance in an increasingly competitive international environment. As one expert noted: “Maintaining that advantage was a very clear objective for the government and the Law Commission.”

Looking Forward

The amendments await implementation “as soon as practical,” according to government statements. Their success will depend on how practitioners adapt to the new framework and whether the promised efficiency gains materialize in practice.

While described as evolutionary rather than revolutionary, these reforms demonstrate the ongoing evolution of arbitration law to meet contemporary challenges whilst preserving London’s position as a premier international arbitration destination.