Agustin Spotorno (Winston & Strawn) and Tomas Villaflor (Arnold & Porter) / 20 February 2025
- Introduction
The reform of the English Arbitration Act(the “English Arbitration Act” or “EAA“) has just been approved by both Houses of Parliament in the United Kingdom. Thus, it is expected to receive Royal Assent in the next few days.[i] This is a major step forward on the international stage as it aims to maintain the UK as one of the most attractive arbitration venues in the world.
International commercial arbitration is a dispute resolution mechanism used within a framework of national[ii] and international law[iii] that gives it validity and effectiveness, where commercial actors from different jurisdictions choose to resolve their disputes outside the judicial system of one country because of a perception of greater neutrality, flexibility and/or expertise in cases about specific industries such as energy. The parties choose the members of a tribunal that will decide their disputes in a binding manner according to a procedure moulded to their preferences.
The seat of arbitration is not only its physical “home” but also its legal one, where the coercive power of the local courts can be called upon for its effectiveness. And it is precisely the law of the “seat” (the EAA if the seat is London) that guides judges, arbitrators, lawyers and arbitral institutions and their special rules, giving them a framework and a legal floor.
London is one of the most frequently chosen seats by international parties.[iv] Around 5,000 arbitration proceedings seated in England generate £2.5 billion for the UK economy.[v] The modernity of the arbitration law in the seat, its predictable application by the judiciary, its geographical convenience, the quality of the legal system and the neutrality of the judges are some of the reasons why parties choose London as “seat”. The important role of English law as one of the most frequently applicable laws in various commercial transactions[vi] is another major factor.
2. Brief summary of the amendments[vii]
It is noted that the Law Commission tasked with reforming the EAA concluded that a comprehensive reform of the Act[viii] was neither necessary nor desirable as the Act is robust, works well, and continues to maintain London as the world’s leading arbitration seat. However, following consultation over the last few years, the Commission has identified specific reforms to ensure that the Act remains efficient, modern and competitive in a rapidly evolving global arbitration landscape. These reforms codify developments in case law without changing the content of the current English law developed over the years through binding case law.[ix]
Thus, attempts are made to improve procedural efficiency without losing sight of the most precious value of arbitration, which is party autonomy. In this regard, improvements emerge in the summary resolution procedures, which allow courts to dismiss meritless claims or defences at an early stage. Another important development is the introduction of an express statutory duty of disclosure for arbitrators, which aligns the EAA with best practices observed in international arbitration. This codification seeks to improve transparency and protect against challenges based on conflicts between arbitrators. The reforms also address jurisdictional challenges, ensuring clarity on when and how objections should be raised and refining the role of courts in determining jurisdictional issues at different stages of arbitration. Finally, the concept of “emergency arbitration” is regulated, which seeks to regularise a practice already well used in arbitration when circumstances do not permit waiting for the ordinary constitution of a tribunal.
3. Specific reforms to the EAA
- Law applicable to the arbitration agreement
i. The pre-reform status quo
It is well known that a commercial contract with an arbitration clause is treated (doctrinally and judicially) as two separate agreements (one an arbitration agreement, the other the main or ‘matrix’ agreement). This is a fiction created so that recalcitrant parties do not challenge the validity of the contract in order to escape their commitment to arbitration. Now, in the past, if the parties to an arbitration proceeding did not specify the law applicable to the arbitration agreement (e.g., by clearly specifying the law governing issues relating to the “arbitration agreement”) then the applicable law was the same as the law that had been chosen for the main contract.[x]
This approach could lead to many arbitration agreements being governed by foreign law, which could become problematic if that law did not support arbitration in the same way as English law. This, in turn, created complexity and unpredictability – requiring detailed analysis of the arbitration agreement, the opposite of the EAA’s spirit of simplicity and speed.
ii. The amendments
Now, in the absence of an express choice by the parties, the law applicable to the arbitration agreement will be presumed to be the law of the “seat”.[xi] The Law Commission clarifies that any doubt about the applicable law to the main (or matrix) contract will not ‘inflect’ the analysis of the law applicable to the arbitration agreement.[xii]
So, by way of example, if a contract between an Argentine company and an English company establishes London as the seat of arbitration and stipulates Germany as the law applicable to the matrix contract, but does not mention the law specifically applicable to the arbitration agreement, the law applicable to the arbitration agreement will be deemed to be the law of the seat i.e. English law: the EAA and English case law.
We think that while the objective is clear (to improve certainty and predictability), it is important that the parties are aware of this presumption and, if they wish another law to govern their arbitration agreement for whatever reasons, specify this clearly in the arbitration clause or the arbitration agreement (if separate from the matrix contract).
2. Duty of disclosure applicable to arbitrators
The duty of disclosure is the obligation of arbitrators to inform the parties of any circumstances that may give rise to justifiable doubts as to their impartiality and independence. This duty is based on fundamental legal principles such as impartiality, transparency and due process. Globally, this principle is well recognised.[xiii]
i. The pre-reform status quo
Prior to the reform, the EAA did not explicitly establish a duty of disclosure for arbitrators. However, case law, notably Halliburton v. Chubb[xiv], recognised an implied duty on arbitrators to disclose any circumstances known to them that might give rise to justifiable doubts as to their impartiality. This duty is derived from the arbitrators’ general obligation to act impartially.
The absence of a clear legal provision regulating the duty of disclosure created uncertainty and lack of uniformity in arbitral practice. It was believed that this ambiguity could lead to situations where arbitrators, without clear guidance, failed to disclose relevant information, which in turn could compromise the parties’ confidence in the fairness of the arbitral process.
ii. The amendments
The EAA codifies the arbitrators’ duty of disclosure. Under the proposed reform, arbitrators have a (continuing) duty to disclose any circumstances that might reasonably give rise to justifiable doubts as to their impartiality, including those of which they are aware or of which they objectively ought reasonably to be aware. This duty extends from pre-appointment discussions, throughout the arbitral proceedings, to the end of the arbitral proceedings, and must be performed as soon as reasonably possible.
The codification of the duty of disclosure brings clarity and uniformity, setting a clearer and more objective standard for arbitrators and the parties involved. This reinforces the integrity of the arbitral process and increases the parties’ confidence in the fairness and transparency of the arbitration. It should be noted that the amendment does not exhaustively set out the circumstances that may give rise to reasonable doubts. This is intended to provide a legislative framework, giving judges, arbitrators and arbitral institutions room to analyse such circumstances in the specific case.
3. Limitations to judicial review regarding the arbitral tribunal’s jurisdiction
i. The pre-reform status quo
While Sections 32 and 67 of the EAA provided for the possibility for the English courts to review the jurisdiction of the arbitral tribunal, nothing was said about the scope of judicial review. However, in 2010, the UK Supreme Court issued the decision Dallah Estate v Government of Pakistan[xv], in which it held that (i) judicial review of the arbitral tribunal’s jurisdiction could be pursued by way of a rehearing[xvi], and (ii) the arbitral tribunal’s decision regarding its jurisdiction had no legal or evidentiary value .[xvii]
The main criticism of this precedent developed by the UK Supreme Court lay in its conflict with the Kompetenz-Kompetenz principle – recognised in Section 30 of the EAA – according to which arbitrators are judges of their own competence. On the other hand, this decision limited the extent of deference to be paid by the English courts to the decisions of an arbitral tribunal.
ii. The amendments
First, the new Section 32 of the EAA prohibits judges from determining preliminary jurisdictional issues if they have already been decided by the arbitral tribunal. Furthermore, the new Section 67 of the EAA provides that:
- A jurisdictional objection that was not raised before the arbitral tribunal may not be raised before the English courts unless the applicant proves that it could not have learned of the circumstances giving rise to it during the arbitral proceedings;
- Evidence that was not put before the arbitral tribunal may not be considered in the judicial review process, unless the applicant proves that it could not obtain it during the arbitral proceedings; and
- Evidence that was heard by the arbitral tribunal may not be re-heard by the court.
The reform in this case is undoubtedly pro-arbitration as it severely limits the scope of judicial review with respect to the jurisdiction of the arbitral tribunal. In this way, the reform to the EAA places London as a seat with deferential courts to the arbitral tribunals’ rulings as to their own jurisdiction — as was already the case in Switzerland, for example.
4. Early rejection of claims
i. The pre-reform status quo
Prior to the reform, the EAA did not contain explicit provisions allowing arbitral tribunals to summarily dismiss claims or defences that lacked merit. Although Section 33(1)(b)[xviii] of the Act imposed a duty on arbitrators to adopt procedures that would avoid “unnecessary delay or expense”, the power to make summary awards was not clearly specified. While the institutional rules of arbitration (e.g. the LCIA rules) – which often constitute lex specialis over lex arbitri (i.e. EAA) – provided for this possibility, arbitral tribunals were reluctant to invoke them given the absence of their counterpart in the text of the EAA, and the risks of a subsequent challenge to the award on the grounds of lack of due process.
The lack of an express statutory provision to that end had led to uncertainty as to whether or not arbitrators possessed the authority to dismiss unfounded claims at the outset and this meant that “some arbitrators might be willing to adopt a summary procedure in some cases, but shy away from doing so for fear that their award would be challenged“[xix] . There was also criticism of the ambiguity this created and the effect on lengthy and costly arbitral proceedings, including where a party raised claims or defences without solid grounds.
ii. The amendments
This lacuna is filled by introducing a provision giving arbitral tribunals the explicit power to make awards on a summary basis. Thus, an arbitral tribunal may now, at the request of a party, make an award on a summary basis if a claim or defence is considered to lack a “real prospect of success“. This measure seeks to align arbitral practice with English court proceedings, where the possibility of issuing summary judgment exists. And while the procedure to be adopted is at the discretion of the arbitral tribunal, it has been noted that each party must be given a reasonable opportunity to make its case to ensure due process.[xx]
The reform could provide courts with greater confidence to dismiss arbitral claims with no prospect of success on the basis of a clear legislative framework (and on the basis of existing institutional rules that may apply to their arbitrations). However, it is essential that parties are aware of this power and consider its inclusion or exclusion when drafting their arbitration agreements, which should be drafted with caution, as well as reviewing the institutional arbitral rules applicable to the agreement in the (rare) event that they waive such a power.
5. Emergency arbitration
Emergency arbitration is a procedure under which a disputing party is allowed to request urgent interim measures from an “emergency arbitrator” before the arbitral tribunal has been formally constituted[xxi]. It is used when, given the urgency of the case, it is not possible to wait for the ordinary constitution of the tribunal – which can take months, when days are required.
- The pre-reform status quo
The EAA, as originally drafted, did not contain any provision related to emergency arbitration. Likewise, the case law did not develop a doctrine related to this institute.
Over the years, various institutional rules began to incorporate the figure of emergency arbitration as a special procedure[xxii]. At the same time, in comparative law, some commercial arbitration laws also recognised the aforementioned institution[xxiii]. Therefore, in the context of the debate around the EAA reform, it was proposed to introduce some provisions related to emergency arbitration elevating the institution to statutory recognition.
ii. The amendments
The new text of the EAA contains amendments to sections 41, 42, 44, 82 and 83 in order to incorporate the concept of “emergency arbitration”. First, the new section 41A(1)(a) provides that the provisions on emergency arbitration will only apply if and to the extent that the parties have consented to its use (in general this can occur when the parties choose institutional arbitration rules —e.g. ICC Rules— from an institution that already provides for emergency arbitration). [xxiv]
The remaining changes have to do with the judicial support for emergency arbitration. On the one hand, the new section 42 allows peremptory orders issued by the emergency arbitrator to be enforceable by the courts. Also, the new section 44 entrusts the emergency arbitrator to allow a party to apply to the courts for orders pertaining to the preservation of evidence.
Emergency arbitration has proven to be an efficient tool for the rapid and expeditious granting of interim measures of protection prior to the formal constitution of the arbitral tribunal. In short, the new EAA is validating an institution already widely used in the practice of international commercial arbitration and which is expressly recognised in the arbitration rules of the most relevant institutions in this field.
4. Conclusion
The recent amendments to the English Arbitration Act are discreet but strategic, as they are clear in their aim to maintain London as a leading seat of international arbitration. A key factor in this goal is the modernisation and clarity of the EAA, ensuring that London remains a preferred destination for global dispute resolution.
These changes come at a crucial time of geopolitical tensions, particularly between China and the United States. This could lead to a shift away from New York as the seat of arbitration in Latin American cases, with parties turning to London for its predictability and neutrality. This trend is particularly relevant for companies in Argentina, Brazil and other Latin American economies that frequently deal with Chinese counterparties, as they increasingly look to a neutral venue such as London to reduce geopolitical risks. In addition, the large-scale construction and infrastructure sectors in the Middle East are growing rapidly in times of de-carbonization. Many commercial contracts in the Middle East designate London as the seat of arbitration or adopt English law as the applicable law. Given the significant number of disputes in this sector, these reforms are expected to further strengthen London’s role as a key seat.
[i] PLC, English Arbitration Bill passes third reasing in House of Commons and is pending Royal Asent, Legal Update: archive; 13 February 2025 https://uk.practicallaw.thomsonreuters.com/w-045-8410?comp=pluk&transitionType=Default&contextData=(sc.Default)&firstPage=true&OWSessionId=c98c969c9ca449138975052f4e858455&skipAnonymous=true (As is the case with Argentina’s commercial arbitration law – 27,447, the EAA was also largely based on the Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law UNCITRAL, with the difference that in England, there were significant changes to it combining aspects of arbitration in England, which was initially regulated in the 17th century by statute and case law).
[ii] The law regulating the arbitration at the seat of the arbitration is often referred to as the “lex arbitri”. By way of example, if the “seat” of an international arbitration is the city of Buenos Aires, then the lex arbitri will typically be the International Commercial Arbitration Act, No. 27.449. If, on the other hand, the seat is London, it will typically be the EAA.
[iii] Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, NY).
[iv] “2021 International Arbitration Survey: Adapting arbitration to a changing world”, White & Case – Queen Mary University of London, May 2021, p. 8 (available here).
[v] Law Commission, Review of the Arbitration Act 1996. A consultation paper (Sep. 2022), https://lawcom.gov.uk/project/review-of-the-arbitration-act-1996/ (accessed 29 Dec. 2023), para. 1.2.
[vi] The Law Society, Global Position of English law: International Data Insights 2024, 10 September 2024. https://www.lawsociety.org.uk/topics/research/international-data-insights-2024 (Its use in international business transactions generates a value in excess of trillions of pounds per year).
[vii] We clarify that, while there have been changes with respect to the immunity of arbitrators and with respect to injunctions with respect to third parties in support of arbitration, we do not elaborate on them. Nor do we delve into those changes which, although originally subject to potential reform, have been decided against.
[viii] Tahsin, Adam & Gass, Marius B. “Codification, Convenience, and the Common Law: The Rationales Underpinning the Law Commission’s Proposed Reforms to the English Arbitration Act 1996”, Journal of International Arbitration41, No. 2 (2024): 115-138.
[ix] Tahsin, Adam & Gass, Marius B. “Codification, Convenience, and the Common Law: The Rationales Underpinning the Law Commission’s Proposed Reforms to the English Arbitration Act 1996”, Journal of International Arbitration41, No. 2 (2024): 115-138.
[x] This approach was derived from the decision of the UK Supreme Court in Enka v. Chubb [2020], which established a three-step approach for determining the law applicable to the arbitration agreement i.e. 1. the law expressly chosen by the parties; 2. in the absence of such a choice, the law governing the main contract; 3. if the law of the contract is not specified, the law with which the arbitration agreement has the closest connection, usually the law of the seat of arbitration.
[xi] This does not apply to so-called “investment” arbitration cases between States and international investors based on treaties or national investment promotion laws. See, Roadmap to proposed amendments to the Arbitration Act 1996, Law Commission Proposals for Reform.
[xii] Law Commission, Final Report, 12.72-12.76.
[xiii] See e.g.: rules such as the UNCITRAL Arbitration Rules, the ICC Rules, and the IBA Guidelines on Conflicts of Interest in International Arbitration, establishing uniform standards to ensure the integrity of the arbitral process.
[xiv][2020] UKSC 48 – 27 Nov 2020.
[xv] [2010] UKSC 46.
[xvi] Dallah Real Estate & Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2010] UKSC 46, [2011] 1 AC 763 at [26] (Lord Mance), [96] (Lord Collins), [159] to [160] (Lord Saville).
[xvii] [2010] UKSC 46, [2011] 1 AC 763 at [30] (Lord Mance).
[xviii] General duty of the tribunal. (1)The tribunal shall- (a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and (b)adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined. (2)The tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it.
[xix] Law Commission, Review of the Arbitration Act 1996. A consultation paper (Sep. 2022), https://lawcom.gov.uk/project/review-of-the-arbitration-act-1996/ para 6.21. (accessed 17 February 2025). Available at <Review of the Arbitration Act 1996 – Law Commission>
[xx] The Law Commission has noted that each party must be given a reasonable opportunity to argue its case. This will guarantee that the parties’ procedural due process rights are respected. See, Tahsin, Adam & Gass, Marius B. ‘Codification, Convenience, and the Common Law: The Rationales Underpinning the Law Commission’s Proposed Reforms to the English Arbitration Act 1996’. Journal of International Arbitration 41, no. 2 (2024): 115–138, p. 129.
[xxi] Lars Markert and Raeesa Rawal, “Emergency Arbitration in Investment and Construction Disputes: An Uneasy Fit?”, Journal of International Arbitration, Vol. 37, 1st Edition, 2020, p. 132.
[xxii] CIArb Arbitration Rules 2015, ap. 1; ICC Arbitration Rules 2021, ap. V; LCIA Arbitration Rules 2020, art. 9B; SCC Arbitration Rules 2017, ap. II; CIETAC Arbitration Rules 2015, ap. III; HKIAC Administered Arbitration Rules 2018, sch. 4; AMINZ Arbitration Rules 2022, r. 12; ACICA Arbitration Rules 2021, sch. 1; SIAC Arbitration Rules 2016, sch. 1.
[xxiii] International Arbitration Act, Singapore, 1994, S. 2(1); New Zealand Arbitration Act, 1996, s. 2(1); Hong Kong Arbitration Ordinance (Chapter 609), s. 22A.
[xxiv] This would commonly occur with the choice of institutional arbitration rules that provide for emergency arbitration.
SOBAL 