Arbitration Update: January 2026

By Sam Macintosh, Hazel He and Mikhail Vishnyakov

Here are the notable developments in 2025 and what to watch out for in 2026:

  1. Legislative updates in England and China
  2. English Court reaffirmed the strict time limits for challenging arbitral awards
  3. Enforceability of arbitration agreements in consumer contracts
  4. English Court confirms that a single dispute can fall within the scope of more than one arbitration clause in related contracts

If any of the topics are of interest, please do not hesitate to reach out.

  1. Legislative updates in England and China

Amendments to the Arbitration Act 1996 came into force on 1 August 2025 (the “2025 Act”) and apply to arbitrations and related court proceedings commenced from that date onwards. We have addressed the key amendments in our previous article.

Separately, China has also amended its arbitration law, which will take effect on 1 March 2026. The amendments seek to align the Chinese arbitration law more closely with international standards, including reaffirming the legal significance of the arbitral seat, promoting international cooperation, formal recognition of online arbitration and limited acceptance of ad hoc arbitration. Nevertheless, the amendments retain the mandatory requirement to designate an arbitration institution, do not adopt the competence-competence doctrine, and do not empower the tribunals to grant interim measures.

  1. English Court reaffirmed the strict time limits for challenging arbitral awards

The English Commercial Court has recently in JSC “Kazan Oil Plant” v Aves Trade DMCC [2025] EWHC 2713 (Comm) reaffirmed the strict time limits for challenging arbitral awards. In that case, the applicant applied to challenge an award from a FOSFA arbitration, under section 69 (appeal on point of law) of the Arbitration Act 1996 (“1996 Act”). FOSFA, like GAFTA, has its own internal appeal mechanism and the challenge was made against the second-tier appeal award rendered by the FOSFA Board of Appeal.

The applicant, being a Russian entity, encountered payment difficulties due to sanctions. This delayed the payment of the balance due to FOSFA, which in turn delayed the release of the appeal award to the parties.

The applicant issued the challenge precisely 28 days after the date when it received the appeal award, but more than 28 days after the date of the appeal award. The English court considered whether the 28-day period for challenging an award allowed by section 70(3) of the 1996 Act ran from (a) the date of the appeal award, or (b) the date when the applicant received the appeal award.

Section 70 of the 1996 Act provides that (with emphasis):

“(1) The following provisions apply to an application or appeal under section 67, 68 or 69.

(2) An application or appeal may not be brought if the applicant or appellant has not first exhausted—

(a) any available arbitral process of appeal or review, and

(b) any available recourse under section 57 (correction of award or additional award).

(3) Any application or appeal must be brought within 28 days of the date of the award or, if there has been any arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of that process.”

As mentioned, the challenge was filed within 28 days of the applicant receiving the award. However, the Court held that where an award has already been subject to an arbitral appeal process and no further arbitral review is available, the 28-day period under section 70(3) for bringing a court challenge runs from the date of the appeal award, not from the date the award is received by the applicant.

As a result, the Court dismissed the applicant’s out of time section 69 challenge. The Court also refused an extension of time under section 80(5), even though the Court accepted that certain initial delays were due to payment difficulties in order for the award to be released.

While the case was brought under section 69 only, the same approach in deciding the time limit also applies to challenges made under sections 67 (tribunal’s substantive jurisdiction) and 68 (serious irregularity), pursuant to section 70(1). The decision serves as a clear reminder that parties seeking to challenge arbitral awards must act promptly, particularly given that the 28-day period under section 70(3) is already much shorter than the 3-month period provided under Article 34(3) of the UNCITRAL Model Law.

Does the 2025 Act amend the position?

Although the 2025 Act has amended section 70(3) of the 1996 Act and added a new section 70(3A), this amendment is unlikely to influence the approach set out in Kazan Oil Plant v Aves Trade, summarised above.

The amended Section 70(3) reads as below (with emphasis):

“(3) Any application or appeal must be brought within 28 days of the applicable date.

(3A) In subsection (3), “the applicable date” means—

(a) in a case where there has been any arbitral process of appeal or review, the date when the applicant or appellant was notified of the result of that process;

(b) in a case where the tribunal has, under section 57, made a material correction to an award or has made a material additional award, the date of the correction or additional award;

(c) in a case where a material application for a correction to an award or for an additional award has been made to the tribunal under section 57 and the tribunal has decided not to grant the application, the date when the applicant or appellant was notified of that decision;

(d) in any other case, the date of the award.”

Given that the relevant wording in section 70(3) of the 1996 Act (as underlined) has been retained, the strict approach to the 28-day time limit shall continue to be relevant under the 2025 Act.

  1. Enforceability of arbitration agreements in consumer contracts

The English consumer protection legislation places certain limits on the use of arbitration under consumer contracts and the enforceability of arbitral awards against consumers, with a view to protecting UK consumers. Sections 89 to 91 of the 1996 Act (which are not amended by the 2025 Act), read together with Part 2 and paragraph 20 of Part 1 of Schedule 2 of the Consumer Rights Act 2015, provide that: arbitration agreements in consumer contracts may be considered unfair and therefore not binding on consumers and unenforceable, if a modest amount is sought (under £5,000, pursuant to the Unfair Arbitration Agreements (Specified Amount) Order 1999), or if the arbitration agreements are unfair, insufficiently transparent or not prominent (e.g. requiring the English consumers to submit disputes to arbitration in a manner that creates a significant imbalance or effectively deprives them of the right to litigate before the English courts).

As businesses increasingly include mandatory arbitration clauses in their contracts – frequently incorporated in online terms and conditions – disputes have emerged as to whether these arbitration clauses have been sufficiently brought to the consumer’s notice and whether the arbitration agreements and any subsequent awards are enforceable.

The English Court of Appeal previously in Eternity Sky Investments Ltd v Zhang [2024] EWCA Civ 630 dismissed an appeal against an unsuccessful challenge of a Hong Kong award. The applicant sought to rely on the UK consumer protection legislation and argued that the award had failed to take account of consumer protection and therefore the enforcement would offend public policy. The Court rejected this upon finding that the applicant did not qualify as a consumer. Significantly, however, the Court indicated that, had the applicant been able to show that she was a consumer who entered into a consumer contract that had a close connection with the UK and whose terms were lacking transparency and fairness, the Court would have refused enforcement of the award.

This decision indicates that arbitration agreements cannot be assumed to be enforceable against UK consumers, and that consumer protection arguments may be raised both at the enforcement stage and potentially, earlier in the arbitration. Businesses who deal directly with consumers should therefore exercise caution in pursuing arbitration against consumers, particularly where those arbitration clauses are mandatory, incorporated in standard terms, and/or impose procedural or cost burdens on consumers. On the other hand, UK consumers who are facing arbitration against them should review their options and consider whether they may be able to rely on the UK consumer protection legislation to request the English courts to determine any dispute.

  1. English Court confirms that a single dispute can fall within the scope of more than one arbitration clause in related contracts

In CAFI v GTCS Trading DMCC [2025] EWHC 1350, dispute arose from two GAFTA‑governed contracts for the sale of Russian wheat. After disputed payment issues caused by US sanctions, GTCS purported to terminate the first contract on the grounds of anticipatory breach. The parties later entered into a second contract at a reduced price, which included a termination clause stating that both parties agreed the first contract would be “terminated and considered void”. GTCS later initiated arbitration claiming damages for CAFI’s alleged repudiatory breach under the first contract. The GAFTA Appeal Board found that it lacked jurisdiction to interpret the second contract and its termination clause, and that entry into that contract did not constitute a waiver. CAFI challenged the Appeal Award on multiple grounds.

The Commercial Court held that jurisdiction agreements are not necessarily mutually exclusive; the arbitration clause in the first contract covered disputes “arising out of or under this contract”, which was broad enough to encompass how subsequent agreements affected rights under the first contract. The Court therefore upheld CAFI’s appeal.

This is an unusual case where a challenge succeeded on all sections 67, 68 and 69 of the 1996 Act. The Commercial Court confirmed that a single dispute can fall within the scope of more than one arbitration clause in related contracts, effectively meaning that the claimant may choose which arbitration clause to rely on, although they should do so with caution in light of the risk of (1) potential disputes over which clause applies, (2) parallel proceedings and (3) inconsistent outcomes.