Arbitration is an alternative method to litigation by which disputes can be resolved; it is commonplace for international commercial parties to select London as their seat for arbitrations, regardless of their connection to England and Wales. This article explores a key update in the legal framework of Arbitration in England, Wales and Northern Ireland.

The Arbitration Bill received Royal Assent on 24 February 2025, allowing for the enactment of the 2025 Arbitration Act. The new Act seeks to refine and improve the Arbitration Act 1996 (which long has been widely praised), providing clarity in areas where ambiguities have arisen.

Although in its infancy, this new legislation appears to preserve (and build upon) the foundations through which England, Wales and Northern Ireland (specifically, London) has become the leading seat for international arbitration.

Below are some key changes brought by the new Act, and some insight into how they may affect outcomes for parties, and the arbitration system.

The Newly Codified Duty of Disclosure

The requirement for arbitrators in England and Wales to be impartial and make certain disclosures is not a new one. Under section 33 of the 1996 Act, arbitrators have a statutory duty to act fairly and impartially as between the parties.

As established in Halliburton v Chubb [2020] UKSC 48, arbitrators have a legal duty to disclose facts and circumstances which would or might reasonably give rise to the appearance of bias. This duty has now been codified by the 2025 Arbitration Act. The duty will be a continuing obligation on arbitrators, and it extends to what the arbitrator ought reasonably to have known.

The codification of the common law rule should allow for greater certainty for parties to arbitration; it builds on the 1996 Act’s express duty of impartiality and is suitable for the current landscape in which a growing number of arbitrators are taking on a growing number of cases.

The Law Governing the Arbitration Agreement

Section 6A of the new Act establishes a default rule that the applicable law to the arbitration agreement will be that of the seat of arbitration, unless the parties have expressly agreed otherwise.

This is a move away from the previous position that was determined by the Supreme Court decision in Enka [2020] UKSC 38.

The Supreme Court’s decision in Enka established that, where parties have not agreed upon the governing law for the arbitration agreement, it is likely to be the law of the main contract that will govern, regardless of where the arbitration takes place. This received criticism as the rule allowed for foreign laws to undermine the arbitration agreement in English-seated arbitrations.

Under the new Act, there will be greater clarity and consistency for arbitration in England and Wales, with parties no longer needing to worry about jurisdictional challenges relating to governing law.

Push for Efficiency: Summary Disposal Powers

With a steadily high number of arbitrations taking place in England and Wales each year, it is not surprising that the new Act has introduced changes that promote quick and efficient arbitration processes.

Although the arbitral rules of the London Court of International Arbitration (LCIA), as well as the SIAC and SCC, have procedures that mirror summary judgement, the 1996 Act did not contain a provision that gave arbitrators such a power.

Under the new section 39A, the tribunal can make an award on a summary basis if it considers:

• A party has no real prospect of succeeding on the claim or issue, or
• A party has no real prospect of succeeding in the defence of the claim or issue.

This additional power for arbitrators in England and Wales should have a positive impact, helping to reduce costs in some cases and bringing greater efficiency to proceedings.

Final Remarks and Considerations for Your Business

The changes mentioned above—and the 2025 Arbitration Act as a whole—do not represent an upheaval of the current system of arbitration in England, Wales and Northern Ireland. Rather, they offer practical and timely updates to an already strong legal framework.

At Druces LLP, our dispute resolution and arbitration team have extensive and up-to-date expertise in both domestic and international arbitration. We can support your business with:

• The drafting of arbitration agreements;
• Setting up ad hoc arbitrations after a dispute has arisen; and
• Appointing tribunals or handling enforcement actions in England and internationally.

In the international arbitration context, Druces regularly partners with legal experts from our global network to achieve strong outcomes for our clients.

Should you have any questions relating to any of the above, or if you require arbitration advice more generally, please contact Richard Bailey at r.bailey@druces.com.