UK Trends and Developments Contributed by: Tom Sprange KC, Shouvik Bhattacharya and Sadyant Sasiprabhu, King & Spalding International LLP
they are well advised to clearly and expressly state that choice in the arbitration agreement. Challenges to Jurisdiction and the Award The 2025 Act introduces a number of reforms to the framework governing jurisdictional challenges. The 1996 Act provided for a dual-track approach to juris - dictional challenges: parties could raise jurisdictional objections to the tribunal under Section 32 during pendency of the arbitration, and could subsequently seek a full re-hearing before the courts under Sec - tion 67. This potentially resulted in a party getting two challenges, causing unnecessary delay and costs. The 2025 Act clarifies the operation of Section 32, restricting recourse to the courts to those limited instances where the tribunal has not yet ruled on its jurisdiction. The 1996 Act allowed a Section 32 chal - lenge with the tribunal’s permission even where the tribunal had ruled. Under the 2025 Act, where the tri - bunal has already decided a jurisdictional challenge, any challenge to the jurisdiction in court must proceed under Section 67. Crucially, the 2025 Act now restricts the scope of such challenges: applicants are no longer entitled to a full re-hearing and may not introduce new evidence or arguments that were not presented to the tribunal, save for two narrowly defined exceptions. Further amendments limit the court’s discretion to set aside awards. A court must now be satisfied that it would be inappropriate to remit the matter to the tri - bunal before exercising its power to declare an award of no effect. The 2025 Act confirms that where a tribunal is found to lack jurisdiction – whether by its own ruling or by the court – it may nonetheless determine the costs incurred in the proceedings up to that point. This ensures procedural fairness and provides clarity on cost allocation in jurisdictional disputes. Overall, these amendments aim to reinforce the finality of arbitral decisions and reduce judicial intervention. Summary Judgment The 2025 Act introduces a new Section 39A, which expressly empowers arbitral tribunals to dispose of claims or defences on a summary basis where they lack real prospects of success. The test mirrors that
applied by the English courts under Rule 24.3 (a) of the Civil Procedure Rules, thereby aligning arbitral pro - cedure more closely with domestic English litigation standards. This reform codifies a power that many tribunals have long exercised in practice, and is intended to enhance procedural efficiency by enabling early dismissal of unmeritorious claims. Parties retain the ability to opt out of the application of this provision, and the tribunal must ensure that all parties are afforded a reasonable opportunity to make representations before any sum - mary determination is made. The provision is expected to reduce the time and cost associated with resolving disputes, particularly where certain issues can be disposed of without the need for full evidentiary hearings. It also serves to deter vexa - tious or tactical claims that may otherwise burden the arbitral process. Third Parties The 2025 Act resolves long-standing ambiguity sur - rounding the courts’ powers under Section 44 in rela - tion to third parties. Before the amendment, case law left open the question of whether courts could issue orders against individuals or entities not party to the arbitration agreement. The new legislation puts that uncertainty to rest. Courts are now expressly authorised to make orders against third parties in support of arbitral proceedings, bringing the arbitral framework into alignment with the broader powers available in litigation. These orders may include: • interim injunctions; • directions for the preservation or collection of evi - dence; and • orders concerning the sale of goods. Importantly, the 2025 Act also introduces a proce - dural safeguard: third parties subject to such orders are granted a direct right of appeal, without the need to seek permission from the court. This ensures that the expanded powers are balanced by appropriate protections for those drawn into arbitration-related proceedings.
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