The Arbitration Act 2025 has brought about changes to the way that arbitral awards can be challenged on the grounds of lack of substantive jurisdiction (provisions for which are contained within section 67 of the Arbitration Act 1996).
Previously, all section 67 applications were conducted as a re-hearing of the arbitration. But now section 11 of the Arbitration Act 2025 inserts the following provisions into section 67 of the Arbitration Act 1996:
“ (3C)…
- evidence that was not put before the tribunal must not be considered by the court unless the applicant shows that, at the time the applicant took part in the proceedings, the applicant could not with reasonable diligence have put the evidence before the tribunal;
- evidence that was heard by the tribunal must not be re-heard by the court.”
The reason for the change was to depart from the unpopular Supreme Court decision in Dallah Real Estate & Tourism Holding Co v. Ministry of Religious Affairs of the Government of Pakistan [2010] UKSC 46, which established that jurisdictional challenges under section 67 had to proceed by way of a full re-hearing that disregarded the tribunal’s own findings on the question of jurisdiction.
Cases like Commercial Court in GPF GP S.à.r.l. v Republic of Poland [2018] EWHC 409 (Comm) had argued that the approach in Dallah was not justified and should be restricted wherever possible. But the precedent of a Supreme Court decision made it difficult to overcome the position, without new legislation (as we have now).
Under the new legislation, where the tribunal has already ruled on its jurisdiction, and the objecting party participated in the process, then any subsequent challenge to an award under section 67 of the Arbitration Act 1996 will be by way of review only and not a full re-hearing.
This restricts the ability of the losing party to reformulate its case in front of the court, and possibly present new arguments and new evidence. The new approach is more aligned with upholding the finality of arbitral decisions.
A recent case bound by the previous approach
The recent case of MSH Ltd v HCS Ltd [2025] EWHC 815 (Comm) raised some of the issues of the old approach. This was an application under section 67 Arbitration Act 1996 challenging the arbitration award dated 5 April 2024 for lack of substantive jurisdiction.
Mr Justice Foxton commented that “as with all s.67 applications, this is a re-hearing.” Now that the Arbitration Act 2025 is in force, we will see a departure from this position, and the court’s role will be a review, rather than a re-hearing.
However, in this case, the parties agreed to proceed on the basis of the evidence adduced in the arbitration including witness statements and transcripts of their evidence before the arbitral tribunal. Mr Justice Foxton commented that the evidence was not always clear or consistent and he was “not particularly surprised” that a certain issue generated a “divergence of views within the tribunal.”
Certain points came “into sharper focus” in the challenge before the court, than it had done before the arbitral tribunal. This illustrates the point that parties can tweak the presentation of their submissions in the court re-hearing, which is one of the reasons why the change in the Arbitration Act 2025 has been welcomed.
It will be interesting to see how the new ‘review’ approach plays out in practice in the coming months and years as the courts adjust to the changes in the Arbitration Act 2025.
