The United Kingdom is set to implement its brand-new Arbitration Act, 2025 (“New Act”) on 1st August, 2025. The new act will replace the Arbitration Act, 1996 (“Old Act”). Before listing down the changes which the new act will bring along, for the benefit of the readers I will briefly go through the timeline which led to the introduction of the new act.
The old act governed arbitrations where the seat was- Wales, Northern Ireland and England. In November, 2021 United Kingdom government asked for recommendations from its law commission to ensure that UK remains the preferred seat globally in view of rise of other nations (such as Singapore) as a global arbitration hub. The Law Commission released its consultation paper titled “Review of the Arbitration Act, 1996”[1] and invited responses from 22nd September to 15th December 2022. After two rounds of public consultation with the stakeholders, the House of Commons printed the “Review of the Arbitration Act 1996: Final report and Bill”[2] on 5th September, 2023. On 24th February, 2025 the recommendations were incorporated into the new act and received the royal assent.
Changes in the arbitration regime of UK
It is important to highlight that the new act is not a completely new set of provisions- but is a finetuning of its predecessor. I will briefly list down the key changes introduced, and for brevity I will focus only on Clause 1 (law applicable to arbitration agreement) which introduces Section 6A(1).
The new act introduces key reforms[3] to UK’s arbitration law including but not limited to[4] the following- Clause 2 (Impartiality: duty of disclosure) introduces Section 23A which codifies arbitrators’ ongoing duty to disclose any circumstances reasonably raising doubts about their impartiality, based on what they ought reasonably to know. Arbitrator immunity is strengthened, removing liability for resignation unless unreasonable and for removal costs absent bad faith. Clause 7 (Power to make award on summary basis) introduces Section 39A which grants the tribunals a new power for summary disposal of claims or defences lacking a real prospect of success. Moreover, challenges to awards under Section 67 are streamlined, limiting court re-hearing of evidence and new arguments unless justice requires. A default rule establishes the seat’s law as governing the arbitration agreement unless otherwise agreed. The court’s powers under Section 44 to support proceedings, including against third parties and emergency arbitrators, are confirmed; emergency arbitrators can issue enforceable peremptory orders and grant permission for Section 44 applications. Finally, jurisdictional objections under Section 32 are unavailable if the tribunal already ruled, and tribunals retain power to award costs even if finding no substantive jurisdiction.
Section 6A: Law applicable to arbitration agreement
The new Act introduces a clear, default rule under Section 6A for determining the law governing an arbitration agreement. It provides that: (1) The law applicable to the arbitration agreement is the law expressly chosen by the parties to govern it specifically. (2) Absent such an express choice, the law applicable is the law of the seat of the arbitration. Crucially, an express choice of law governing the main underlying contract does not constitute an express choice governing the arbitration agreement itself. This establishes a straightforward statutory rule: the arbitration agreement is governed by the law of the seat, absent an express choice of law applicable to it.
Prior to 2020, the English courts relied primarily on the three-stage test established in 2012 in Sulamérica v Enesa Engenharia[5] to determine the law applicable to an arbitration agreement: (1) express party choice; (2) if absent, implied party choice; (3) if neither, the law with the closest connection (often the seat). Application of this test, however, proved inconsistent.
The UK Supreme Court’s 2020 decision in Enka v Chubb[6] significantly altered this approach. It held that where parties had chosen a law (expressly or impliedly) for the main underlying contract, that choice would generally also govern the arbitration agreement. Only if no such choice for the main contract existed would the law of the arbitral seat typically apply. This approach faced substantial criticism. Its emphasis on the main contract’s law meant that a UK seated arbitration agreement, for instance within a foreign-law governed contract, without an express law specified for the arbitration clause itself, would usually be subject to that foreign law. Consequently, key supportive provisions of the old act, applicable when English law governs the agreement, might not apply, potentially limiting parties’ access to the protective framework of the English courts for UK-seated arbitrations.
The new act resolves this uncertainty by introducing a new statutory default rule in Section 6A(1). This rule provides that the law governing the arbitration agreement is: (a) the law the parties expressly choose for it, or (b) absent such express choice, the law of the arbitral seat. Crucially, Section 6A(2) clarifies that choosing a law for the main contract does not constitute an express choice of law for the arbitration agreement; the two are treated as distinct unless the parties specifically state otherwise for the arbitration clause. This new default rule directly replaces the common law position established in Enka v Chubb, which had favoured the main contract’s law. By establishing the seat’s law as the clear default absent express agreement specifically for the arbitration agreement, the Act enhances legal certainty, reduces disputes over governing law, streamlines proceedings, and ensures parties choosing London as a seat benefit from England’s arbitration-friendly legal framework unless they explicitly opt out.
Conclusion
The new act modernises the old act to maintain the UK’s global competitiveness as an arbitration seat. Following extensive consultation, it introduces targeted refinements addressing practical concerns. Key reforms include codifying arbitrator disclosure duties, strengthening immunity, enabling summary disposal, streamlining jurisdictional challenges, and clarifying court support powers. Crucially, Section 6A resolves significant uncertainty by establishing a clear default rule: the law of the seat governs the arbitration agreement unless parties expressly choose otherwise for the clause itself, decisively overturning Enka v Chubb. This enhances certainty, reduces satellite litigation, and solidifies London’s position by ensuring parties benefit fully from England’s supportive arbitration framework.
* Law Graduate, Symbiosis Law School, Pune
[1]https://webarchive.nationalarchives.gov.uk/ukgwa/20250109094438mp_/https:/cloud-platform-e218f50a4812967ba1215eaecede923f.s3.amazonaws.com/uploads/sites/30/2022/09/Arbitration-Consultation-Paper.pdf
[2]https://webarchive.nationalarchives.gov.uk/ukgwa/20250109103833mp_/https:/cloud-platform-e218f50a4812967ba1215eaecede923f.s3.amazonaws.com/uploads/sites/30/2023/09/Arbitration-final-report-with-cover.pdf
[3]https://www.hsfkramer.com/notes/arbitration/2025-02/A-new-UK-Arbitration-Act-2025–the-draft-Arbitration-Bill-receives-Royal-Assent
[4] https://www.legislation.gov.uk/ukpga/2025/4
[5] [2012] EWCA Civ 638
[6] [2020] UKSC 38