2025 Arbitration Year In Review – United Kingdom – Part 1

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THE AUTHOR:
Sahba Mohtadi, Associate at Jones Day

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This article was featured in Jus Mundi‘s 2025 Arbitration Year in Review, an annual publication analyzing arbitration developments across 40+ jurisdictions on 6 continents. This edition brings together young practitioners and senior experts to capture the year’s most significant legislative reforms, enforcement trends, and institutional innovations.

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London continues to be a seat of choice in global arbitrations. This is reflected in the 2025 International Arbitration Survey conducted by Queen Mary University of London (“QMUL”) and White & Case, in which London was the most preferred seat globally, selected by 34% of respondents (2025 International Arbitration Survey, The path forward: Realities and opportunities in arbitration, page 8). Many parties also continue to adopt English law as the applicable law in such disputes. 

Against this backdrop, the review identifies two important developments and outlines their implications for London-seated and English law governed arbitrations: 

• reforms to the jurisdictional framework under the Arbitration Act in Section 1; and
• substantive developments in relation to cryptoassets and their treatment and valuation in arbitration in Section 2.

Section 67 of the Arbitration Act
Section 67 and its Rationale

The Arbitration Act 1996 (“AA 1996”) as amended by the Arbitration Act 2025 (“AA 2025”) applies to arbitral proceedings and related court proceedings commenced on or after 1 August 2025 (the “Commencement Date”). Arbitral proceedings commenced before the Commencement Date – and any related court proceedings, whenever commenced – continue to be governed by the pre-2025 regime; as do any other court proceedings commenced before the Commencement Date. Following a review by the Law Commission, AA 2025 introduced some refinements to the jurisdictional challenge regime under section 67 (“s67”). Under section 30 (“s30”) of AA 1996, unless otherwise agreed by the parties, the arbitral tribunal may rule on its own “substantive jurisdiction” – that is as to: 

• whether there is a valid arbitration agreement; 
• whether the arbitral tribunal is properly constituted; and 
• what matters have been submitted to arbitration in accordance with the arbitration agreement. 

This reflects the competence-competence principle, which is well established under English law (in Russell on Arbitration (24th edn, 2015) [5-075]).

However, English law has long recognised that a tribunal cannot be the final arbiter of its own jurisdiction (see The Departmental Advisory Committee on Arbitration Law, Report on the Arbitration Bill (1996), [137]-[138]). In addition to raising objections in the arbitral proceedings themselves, a party may: 

• with the agreement of the counterparty or permission of the tribunal, ask the English court to determine jurisdiction under s32; or 
• if it does not participate in arbitration proceedings, seek a declaration or injunction under s72(1). 

In practice, these routes are used relatively rarely, and parties more commonly rely on s67 once an award has been issued. This mechanism has been described by the Law Commission as the “other side of the coin” to competence-competence (see the Law Commission, Review of the Arbitration Act 1996: Final Report and Bill, [9.143]).

Application of s67 Under AA 1996

An application under s67 requires the court to determine the outcome of the jurisdictional challenge; and  order the appropriate remedy if the challenge succeeds.

Under AA 1996, a party may apply to the court under s67(1) either to: 

• challenge an award of the arbitral tribunal as to its substantive jurisdiction; or 
• obtain an order declaring an award made by the tribunal on the merits to be of no effect, in whole or in part, because the tribunal did not have substantive jurisdiction. 

The court conducts a de novo determination, undertaking a full re-hearing in relation to the question of jurisdiction, rather than a review of the tribunal’s decision. S73 precludes parties from raising new grounds of objection that could with reasonable diligence have been raised in the arbitral proceedings. Subject to s73, the court may consider relevant evidence and arguments and, in principle, admit new material not previously before the tribunal. In the re-hearing, the court is not required to give any special weight to the tribunal’s award (Dallah v. Pakistan, [2008] EWHC 1901). 

As to remedies, under AA 1996, parties can seek an order: 

• confirming, varying or setting aside the award, in whole or in part (s67(3)); or 
• declaring an award made by the tribunal on the merits to be of no effect (s67(1)(b)). 

Although s67 did not expressly confer a power to remit matters to the tribunal, unlike ss68 and 69, the courts inferred such a power from the scheme of AA 1996 and exercised it in practice. 

Key Cases Decided in 2025 

According to the Commercial Court Report for 2023-2024, 24 s67 applications were filed (a 242% increase from 7 the year before), of which only one had succeeded by the time of the report. That backdrop frames a series of significant decisions in 2025.

• There were several notable s67 judgments related to investment treaty awards, including two key decisions issued by the Court of Appeal. The Court of Appeal in Diag Human and Stava v. Czech Republic, [2025] EWCA 998 partially set aside the tribunal’s award under the Switzerland-Czech Republic Bilateral Investment Treaty (1990)(the “BIT”), insofar as it was made in favour of Diag SE, while leaving the award in favour of Mr Stava unaffected. The Court held that to qualify as an “Investor” under Article 1(1)(c) of the BIT, Diag SE had to be directly or indirectly controlled de jure by a Swiss national (i.e., Mr. Stava) or by a legal entity which would itself qualify as an “Investor” under Article 1(1)(b). The Court held that following the transfer of shares into a trust, Mr Stava lacked de jure control with the result that Diag SE did not qualify as an “Investor”. In Elliott v. Korea, [2025] EWCA 905, the Court of Appeal reversed the Commercial Court’s first instance decision, which dismissed Korea’s challenge on the basis that its reliance on Article 11.1 of the Korea-U.S FTA (2007) was non-jurisdictional. The Court held instead that Article 11.1 did impose jurisdictional limits on the offer to arbitrate, with the result that Korea’s challenge was properly brought under s67. The matter was therefore referred back to the Commercial Court for determination on the merits.  These decisions demonstrate the English courts’ willingness to engage closely with treaty interpretation and jurisdictional gateways.
  
• Similarly, there were several successful challenges in the commercial sphere. In PCMC v. Tecnicas [2025] EWHC 1785, the Court held that the parties had agreed only to ad hoc arbitration, and that the ICC (International Chamber of Commerce) tribunal therefore lacked jurisdiction. In Edward Marciniak and Chemia Bomer E. Marciniak v. Pannonia Bio Zrt, [2025] EWHC 1005, the Court overruled the tribunal, finding that it had wrongly decided it possessed substantive jurisdiction. In GTCS Tading v. CAFI – Commodity & Freight Integrators, [2025] EWHC 1350, the court upheld challenges under ss67/68/69 to a GAFTA (Grain and Feed Trade Association)award. 

Issues Identified by Law Commission and Reforms to AA 1996  

The Law Commission’s review focused on the re-hearing approach taken under s67 and the remedies available under s67.

Rehearing Rather than Review

• the potential for delay and cost through repetition of proceedings; and 
• the potential for unfairness – namely, the risk that a party could benefit from the tribunal’s first determination of jurisdiction, then bolster its case with new evidence and arguments in court proceedings, turning the arbitration “at its most extreme” into a “dress rehearsal” (see the Law Commission, Review of the Arbitration Act 1996: Final Report and Bill, [9.16]- [9.17]). 

The reforms attempt to address these concerns through the introduction of the following provisions, which apply unless the court rules otherwise in the interests of justice and in addition to s73:

• A ground for the objection that was not raised before the arbitral tribunal must not be raised before the court unless the applicant shows that, at the time the applicant took part in the proceedings, the applicant did not know and could not with reasonable diligence have discovered the ground. In fact, s.73(1) already provides that a party who takes part in arbitral proceedings may not later raise a jurisdictional objection if they did not raise it promptly, unless they show they could not with reasonable diligence have discovered the ground. 
• Evidence that was not put before the tribunal must not be considered by the court unless the applicant shows at the time the applicant took part in the proceedings, it could not with reasonable diligence have put the evidence before the tribunal.
• Evidence heard by the tribunal must not be reheard by the court. 

Collectively, these changes are designed to ensure that “there are limits to the arguments and evidence which can be presented” in s67 applications, while preserving the court’s ultimate responsibility to determine jurisdiction (see the Law Commission, Review of the Arbitration Act 1996: Final Report and Bill, [9.55]). 

Remedies

On remedies, the Law Commission also identified inconsistencies between sections 67–69: 

• Remittal is expressly available under ss68 and 69 but not under s67 (although common law has accepted the possibility of remittal under s67). 
• Set aside is available under s67(1)(a)/ (3) but not expressly under s67(1)(b). Declaring an award of no effect is available under s67(1)(b) but not s67(1)(a). 
• The remedy of setting aside the award and declaring the award to be of no effect, is subject to a further requirement, in ss68/69, that the court would not do so, unless satisfied that it would be inappropriate to remit the matters to the tribunal. 

The Law Commission recommended harmonisation of the remedies available under ss67-69, to reflect the position under case law and avoid arguments that different wording mandated different approaches between s67 and ss68 and 69 (see the Law Commission, Review of the Arbitration Act 1996: Final Report and Bill, [9.143]).

Accordingly, AA 2025 has been reformed to include the following provisions: 

• S67 has been harmonised with ss68 and 69, so the court may, by order: 

1. confirm the award; 
2. vary the award; 
3. remit the award to the tribunal, in whole or in part, for reconsideration; 
4. set aside the award, in whole or in part; or 
5. declare the award to be of no effect, in whole or in part.

• Under new s67(3A) the court must not exercise its power to set aside the award, or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.

Looking Forward 

Looking forward, there are likely to be several consequences and considerations for parties, during arbitral proceedings or upon the initiation of a challenge under s67.

• Front-loading jurisdictional evidence and argument: Parties must ensure that they rely on necessary evidence in the underlying arbitration. 
• More selective use of s67 challenges: Given the increasing number of s67 applications, and tighter limits on new argumentation and material, parties may be advised to be more selective about bringing such challenges.
• Greater reliance on the tribunal’s award and the arbitral proceedings as the foundation of a s67 challenge: Courts are likely to be less amenable to new arguments or evidence not presented to the tribunal, and to rely more heavily on the award and the tribunal’s reasoning, as well as transcripts of the underlying arbitral proceedings, as the starting point.
• Development of the “interests of justice” carve-out: Early post-2025 cases will need to define the scope of the “interests of justice” exception. 
• Additional clarity on remedies: The remedies available in the s67 context are now more clearly articulated and aligned with the assumed position under case-law. 

Discover more insights into the latest developments in arbitration in 2025 from around the world now

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ABOUT THE AUTHOR

Sahba Mohtadi is an Associate in Global Disputes at Jones Day. He regularly advises multinational corporations and State-owned entities across various sectors on complex commercial arbitration, investor–State matters, public international law issues, commercial litigation, and business and human rights mandates. Recent representative matters include advising on a US$1 billion ICC arbitration, acting for the claimant in an UNCITRAL investor–State dispute and subsequent litigation, and successfully advising on an LCIA arbitration. The Legal 500 recognizes Sahba as a “key lawyer” for Public International Law (2024–2025), describing Sahba as “destined for great things,” and ranks Sahba as a “Leading Associate” for International Arbitration (2025).

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*The views and opinions set forth herein are the personal views or opinions of the authors; they do not necessarily reflect views or opinions of the firms with which they are associated, and views or opinions of Daily Jus, Jus Mundi, or Jus Connect.