Arbitration is a private way of resolving disputes in which the parties agree to have their case decided by one or more arbitrators, whose decision (the "award") is binding and enforceable, often instead of going to court. In England and Wales it is governed by the Arbitration Act 1996 (as updated by the Arbitration Act 2025). Here is a plain-English walk-through of the typical steps.
Step 1: The arbitration agreement
Arbitration is consensual, it requires an agreement to arbitrate. This is usually an arbitration clause in the underlying contract ("any dispute shall be referred to arbitration…"), or a separate agreement made after a dispute arises. The clause typically sets the seat (legal place) of the arbitration, the rules (e.g. those of an institution such as the LCIA), the number of arbitrators, and the language.
Step 2: Commencing the arbitration
The claiming party starts the process by serving a notice/request for arbitration on the other side, setting out the dispute and the claim, in line with the agreement or the chosen rules.
Step 3: Appointing the tribunal
The parties appoint the arbitrator(s):
- a sole arbitrator, or a panel (often three, each party picks one, and those two (or an institution) choose the chair);
- arbitrators must be independent and impartial and must disclose anything that might cast doubt on that.
If the parties cannot agree, the chosen institution or the court can appoint.
Step 4: Preliminary matters and procedure
Once formed, the tribunal holds a preliminary meeting to set the procedure and timetable, statements of case, disclosure of documents, witness and expert evidence, and the hearing. Arbitration is flexible: the parties and tribunal can tailor the process to the dispute. The tribunal can also rule on its own jurisdiction (the "competence-competence" principle).
Step 5: Exchange of cases and evidence
The parties serve their written cases (claim, defence, any counterclaim) and exchange evidence (documents, witness statements and expert reports) according to the timetable.
Step 6: The hearing
Usually there is a hearing at which the parties present arguments and witnesses are questioned (some disputes are decided "on documents" without a hearing). Hearings in England & Wales are generally conducted in private, a common attraction of arbitration. However, confidentiality is not absolute: its scope depends on the parties' agreement, the applicable institutional rules, and recognised legal exceptions (such as disclosure required for enforcement, court proceedings, or regulatory purposes). (The 2025 reforms also expressly allow tribunals to dispose summarily of issues with no real prospect of success.)
Step 7: The award
The tribunal makes its decision in a written, reasoned award, which is final and binding. It can order payment, performance, interest and costs (often the loser pays much of the winner's costs).
Step 8: Challenging or appealing (limited)
Court intervention is deliberately limited. Under the Arbitration Act 1996 a party may, in restricted circumstances:
- challenge the tribunal's substantive jurisdiction (s 67);
- challenge for serious irregularity causing substantial injustice (s 68); or
- appeal on a point of law (s 69), but this can be, and often is, excluded by the parties' agreement/rules.
Time limits for challenges are short.
Step 9: Enforcement
An award can be enforced like a court judgment. A major advantage is international enforceability: under the New York Convention, awards can be enforced in over 170 countries, usually more easily than enforcing a court judgment abroad.
Key takeaways
- Arbitration runs: agreement → notice → appoint tribunal → set procedure → exchange cases/evidence → hearing → binding award → (limited) challenge → enforcement.
- It is private, flexible and final, with arbitrators chosen by the parties.
- Court challenges are limited to jurisdiction (s 67), serious irregularity (s 68) and (unless excluded) a point of law (s 69).
- Awards enjoy strong international enforcement under the New York Convention, a key reason to choose arbitration for cross-border deals.
Sources
- Arbitration Act 1996 (as amended by the Arbitration Act 2025): arbitration agreements, appointment, procedure, awards, and challenges under ss 67–69
- The competence-competence principle and arbitrators' duties of impartiality and disclosure
- New York Convention 1958 (recognition and enforcement of foreign arbitral awards)
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.