Ready, Set, Arbitrate!

A new era of dispute resolution has dawned. Lana Wilks who is part of our Commercial Dispute Resolution team takes a look at the new Act which will enable this.

A new Act, named in shortform as the Arbitration Act 2025, was enacted on 1 August 2025, and amends the Arbitration Act 1996.

What is Arbitration?

Arbitration is a form of Alternative Dispute Resolution (ADR) used in place of court litigation. Courts increasingly expect parties to engage with ADR before issuing proceedings, and recent authorities have been critical of unreasonable refusals to attempt ADR, with costs consequences even for otherwise successful parties.

Key ADR mechanisms include:

• Mediation
• Arbitration
• Conciliation
• Adjudication
• Expert determination

Arbitration and mediation are the most prevalent mechanisms. Unlike mediators or conciliators, who facilitate negotiations and propose non‑binding outcomes, arbitrators issue binding awards. Arbitration is typically private, offers greater procedural autonomy, and can be faster and more cost‑effective than court proceedings. While some arbitrations resemble litigation in scope and complexity, the confidentiality of the process and party control over procedure are distinguishing features.

Arbitration Process.

Contractual framework

Commercial contracts frequently specify arbitration as the forum for dispute resolution, including the seat, rules, number and method of appointment of arbitrators, and governing procedural framework. Parties may also conclude a standalone arbitration agreement after a dispute arises.

Commencement

The claimant usually serves a notice of arbitration or a request for arbitration. The respondent must reply within any stipulated timeframe and, depending on the agreement or applicable rules, the parties may participate in appointing a sole arbitrator or a three‑member tribunal.

Issues for determination

The tribunal will identify the issues—fact, law, and/or quantum—to be determined.

Procedure

The process commonly includes written submissions, disclosure, witness statements, expert reports, oral advocacy, and cross‑examination, subject to the parties’ agreement and the tribunal’s procedural directions.

Award and challenges

The tribunal issues a binding award. Challenges are limited and depend on the Act and any institutional rules. Findings of fact are rarely disturbed. Errors of law or serious procedural irregularity may justify applications to set aside, remit, or otherwise challenge the award in the courts within strict statutory limits.

While similar to a court hearing in evidential and adversarial aspects, the conduct of an arbitration ultimately depends on the parties’ agreement, the applicable rules, and the tribunal’s case management powers.

The Arbitration Agreement

The arbitration agreement determines key aspects of the process such as tribunal composition, appointment mechanisms, seat of arbitration, governing rules and venue.

What has been amended?

• Law applicable to arbitration agreement
• Impartiality: duty of disclosure
• Immunity of arbitrator: application for removal
• Immunity of arbitrator: resignation
• Court determination of jurisdiction of tribunal
• Power to award costs despite no substantive jurisdiction
• Power to make an award on summary basis
• Emergency arbitrators
• Court powers exercisable in support of arbitral proceedings in respect of third parties
• Challenging the award: remedies available to the court
• Procedure on challenge under the Arbitration Act 1996, s67
• Challenging the award: time limit
• Appeals to Court of Appeal from High Court decisions
• Requirements to be met for court to consider applications
• Repeal of provisions relating to domestic arbitration agreements

Practical Effect of the Reform

In short, the Act modernises aspects of the 1996 Act and places express statutory duties on arbitrators and tribunals, including a clear duty of disclosure regarding potential conflicts, and provides explicit powers for summary disposal and emergency relief.

Further, the Act brings certainty to precedent cases such as Enka v Chubb, and confirms a default rule that, absent of an express agreement on the law of the arbitration agreement, the law of the seat governs. References to the governing law of the underlying contract do not, without more, constitute an express choice for the arbitration agreement. This amendment is particularly significant in international arbitration.

Additionally, the Act strengthens arbitrator immunity in defined scenarios, streamlines jurisdictional challenges (including s.67 procedure), clarifies costs powers even where jurisdiction is ultimately found lacking, and confirms court powers in support of arbitration, including against third parties where appropriate. Newly added summary awards and emergency arbitrator provisions promote early resolution of dispositive issues and urgent interim relief, improving efficiency while preserving due process.

We can advise on all arbitration related matters, such as amendments or creation of arbitration agreements, advice and representation at arbitration or individuals can be instructed as an arbitrator in your dispute.