The Arbitration Bill [HL] 2024-25 (the “<span class="news-text_medium">Bill</span>”) was introduced in the House of Lords on 18 July 2024. Following its completion of the Lords stages on 6 November 2024, the Bill was forwarded to the House of Commons and completed its second reading on 29 January 2025. The Bill is presently in the Committee stage.
Detailed explanatory notes and an update on the Bill's progress can be accessed on the UK Parliament website. Additionally, government resources such as a factsheet, impact assessment and memoranda on human rights and delegated powers are available on GOV.UK.
Arbitration involves resolving disputes through an impartial arbitrator or tribunal, which delivers a binding decision. The Bill aims to update the <span class="news-text_italic-underline">Arbitration Act 1996</span> (the “<span class="news-text_medium">1996 Act</span>”) based on the Law Commission's recommendations, aligning with the government's goal to maintain the UK’s status as a leading arbitration hub amidst global legislative developments.
The 1996 Act governs arbitration in England, Wales and Northern Ireland. London is widely recognised as a premier arbitration centre, with English law governing many international commercial agreements.
In March 2021, the Conservative government tasked the Law Commission with reviewing the 1996 Act to ensure its relevance. Consultations on potential reforms were conducted in September 2022 and March 2023, culminating in a final report in September 2023. The report included proposals on arbitration agreements, arbitrator challenges, court support for arbitration and dismissing meritless claims.
The Law Commission acknowledged that the Act generally functions well and does not require comprehensive reform, recommending targeted updates instead. These recommendations were accepted by the government, leading to the introduction of the Arbitration Bill [HL] 2023-24. Although this bill was amended during its legislative process, it lapsed when Parliament was prorogued in May 2024 ahead of the General Election.
The Labour government reaffirmed its commitment to reintroducing the Bill in the King’s Speech on 17 July 2024. The revised Bill was introduced in the House of Lords the following day, incorporating amendments from earlier readings and changes related to arbitration agreements in investor-state treaties. On 11 September 2024, further amendments addressed appeals on stays of legal proceedings and revised the Bill’s long title. The Bill applies to England, Wales and Northern Ireland and is anticipated to take effect in 2025.
The proposed amendments are designed to modernize the 1996 Act without fundamentally altering its framework. Key changes include:
Recent court cases, such as <span class="news-text_italic-underline">UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30</span>, have highlighted the practical implications of these changes. The Supreme Court confirmed that arbitration agreements are generally governed by the main contract’s law unless otherwise specified. This has enabled the English court to support foreign-seated arbitrations through anti-suit injunctions. However, the proposed reforms could limit the court’s ability to grant such relief in the future, particularly in disputes involving Russian parties.
