Amendments to the Arbitration Act 1996 & Challenging Arbitral Awards in English Court

Ramona Danciu
Solicitor

Introduction

There are circumstances where parties may wish to challenge an arbitration award. The AA 1996 provides specific grounds for such challenges, which are designed to balance the need for finality in arbitration with the protection of parties from procedural or substantive injustices.

This article provides an outline of the significant reforms introduced by the AA 2025, and their implications, followed by an exploration of the ways in which arbitration awards can be challenged in English courts, focusing on the grounds provided for in sections 67, 68, and 69 of the AA 1996 and further considering relevant case law where applicable.

 A. The Amendments to the Arbitration Act 1996

The Arbitration Act 2025 is the result of an extensive review carried out by the Law Commission of England and Wales from 2021 to 2023. The primary goal of the reform was to uphold England and Wales’ position as a premier arbitration hub and to ensure the AA 1996 continues to meet the needs of a dynamic global business environment. The changes brought by the Arbitration Act 2025 focus on significant aspects of arbitration law, such as establishing default rules for the governing law of arbitration agreements, codifying arbitrators’ duties, and revising the procedures for challenging awards.

Key Amendments Introduced by the AA 2025

Some of the most debated amendments are address following:

1. Governing Law of Arbitration Agreements: A newly introduced statutory provision (section 6A) stipulates that, unless explicitly agreed otherwise by the parties, the law governing the arbitration agreement will default to the law of the arbitration’s seat. This replaces the previous rule established in Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38, which often led to uncertainty and satellite litigation.
   
2. Codification of Arbitrator’s Duty of Disclosure: Section 23A introduces a clear obligation for arbitrators to disclose any circumstances that could reasonably cast doubt on their impartiality, reinforcing the standards set in Halliburton Co v Chubb Bermuda Insurance Ltd [2020] UKSC 48.
   
3. Summary Disposal of Claims: Section 39A grants tribunals a specific authority to summarily dismiss claims or issues that lack a realistic prospect of success, mirroring the test used for summary judgment in English court proceedings.
   
4. Jurisdictional Challenges (Section 67): The framework for challenging awards on jurisdictional grounds has been revised, prima facie by introducing rules aimed at streamlining the process by restricting the scope of evidence and arguments permitted during these challenges.
   
5. Expanded Remedies for Challenges: The remedies for successful challenges under sections 67, 68, and 69 have been broadened, allowing courts to remit the matter to the tribunal for reconsideration, vary the award, or declare the award of no effect.

These amendments reflect a careful balance between preserving the finality of arbitration awards and ensuring that parties have access to fair and efficient mechanisms for resolving procedural or substantive issues.

B. Challenging Awards: sections 67, 68, 69

i. Section 67: Challenging an Award on Lack of Substantive Jurisdiction

Section 67 of the AA 1996 allows a party to challenge an arbitration award on the grounds that the tribunal lacked substantive jurisdiction. Substantive jurisdiction refers to whether the tribunal had the authority to decide the dispute, which includes questions such as:

• Whether a valid arbitration agreement exists.
• Whether the tribunal was properly constituted.

Whether the matters decided fall within the scope of the arbitration agreement.

Extent of Section 67 Challenges

Prior to the 2025 amendments, the challenge could be treated as a full rehearing, where the tribunal’s decision on jurisdiction had no legal or evidential value (Dallah Real Estate & Tourism Holding Co v Pakistan [2010] UKSC 46). Criticised as an attempt to have a second bite of the cherry, as the parties could produce new evidence and essentially relitigate the same matter, the former approach has been reviewed. The AA 2025 introduced significant changes to section 67 challenges:

1. Sections 67(3B) and (3C) introduce rules limiting the evidence and arguments presented during a section 67 challenge, intending to uphold the concept of reviews of the awards rather than having full rehearing. The restrictions relate to:
   
   (a) Evidence heard by the tribunal may not be reheard by the court unless the court deems it necessary in the interests of justice.
   
   (b) New grounds for objection or evidence not presented to the tribunal, where the party ought to have known of such objection or the existence of such evidence, will be excluded unless the court deems it necessary in the interest of justice.
   
2. The remedies available in court are that the court can confirm, vary, remit in whole or in part the award to the tribunal for reconsideration, set aside, or declare the award of no effect (section 67(3A)).

Practical Implications

These changes aim to streamline section 67 challenges, reducing the risk of duplication and excessive costs. However, the court retains ultimate authority over jurisdictional matters, safeguarding the principle of fairness.

ii. Section 68: Challenging an Award for Serious Irregularity

Section 68 establishes a procedure for challenging an arbitral award on the grounds of serious irregularity that has resulted in substantial injustice to a party. Examples of serious irregularities include: (i) the tribunal’s failure to fulfil its duty under section 33 AA 1996 to conduct proceedings fairly and impartially, allowing each party the opportunity to present their case and ensuring what there is no unnecessary delay in the arbitration process; (ii) the tribunal exceeding its power, where they act outside the authority as detailed in the arbitration agreement; (iii) the tribunal’s failure to address all issues that were submitted for determination, covering instances where the tribunal fails to address some of the matters submitted by the parties.

In Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43, the House of Lords clarified that challenges under section 68 of the Arbitration Act 1996 are not intended to provide an opportunity for parties to re-litigate the merits of their case. Instead, they are specifically designed to address serious procedural irregularities that have caused, or are likely to cause, substantial injustice. A challenge under section 68 is mandatory, which means that the parties cannot opt out. The test requires the party brining such challenge to demonstrate both the existence of a serious irregularity and substantial injustice resulting from it.

With regards to the reform, the AA 2025 introduces clearer time limits for section 68 challenges, ensuring that the 28-day period accounts for corrections or additional awards under section 57 AA 1996.

iii. Section 69: Appeal on a Point of Law

Section 69 allows a party to appeal an award on a point of law arising from the award. Unlike sections 67 and 68, section 69 is non-mandatory, meaning parties can agree to exclude this right in their arbitration agreement.

The procedure under section 69 requires the court to grant permission for an appeal, which will only be granted if the following conditions are met:

1. The determination of the question is likely to have a significant impact on the rights of one or more parties.
2. The question is one that the arbitral tribunal was specifically asked to decide.
3. The tribunal’s decision is either clearly incorrect or raises a matter of general public importance.

In Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40, the House of Lords emphasised on the significance of upholding the parties’ autonomy (i.e. to choose arbitration as their preferred method of dispute resolution), as well as the principle of limited court intervention in arbitration matters. Consequently, appeals under section 69 of the Arbitration Act 1996 are granted only in exceptional circumstances and are approached with great caution.

Conclusion

The English Arbitration Act 1996, as amended by the Arbitration Act 2025, provides a robust framework for challenging arbitration awards while maintaining the principles of fairness, party autonomy, and limited court intervention. The recent amendments have modernised the law, introducing clearer procedures, expanded remedies, and new powers for tribunals and courts. By understanding the nuances of sections 67, 68, 69, parties can navigate the process of challenging awards effectively and ensure that their rights are protected. As English arbitration law continues to evolve, it remains a leading choice for dispute resolution in the global business community.

If you require our assistance either to act as counsel in arbitration or advise and represent you in challenging awards, please do not hesitate to contact us.

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