July 2025 Legal Insights and Updates

The recent amendment to CPR 62.10 deletes paragraph 62.10(4)(a), which previously required that hearings on whether the court is satisfied with the matters set out in section 45(2)(b) of the Arbitration Act 1996 (“AA 1996”) would generally be heard in private. This deletion is aligned with changes made by the Arbitration Act 2025 (“AA 2025”), which simplifies the process for challenging jurisdiction in arbitration.

The AA 2025 introduces a modification to section 32 of the AA 1996, allowing an arbitrating party to apply to the court for a ruling on a preliminary point of jurisdiction. Under the new framework, an application for a ruling will require either the agreement of both parties (section 32(2)(a)) or the permission of the tribunal (section 32(2)(b)). The previous requirement that the party applying with the tribunal’s permission must also satisfy the court of additional criteria has been removed.

Additionally, the Civil Procedure Rule Committee (“CPRC”) discussed potential changes to Practice Direction 62 (“PD 62”), which governs the procedural aspects of applications under sections 32 and 45 of the AA 1996. These changes may affect the procedure for jurisdictional challenges and preliminary rulings on points of law. The CPRC is also awaiting further information from the Ministry of Justice regarding the necessity of new rules for jurisdictional challenges to awards under section 67 of the AA 1996, as outlined in section 11 of the AA 2025.

On 17 July 2025, the Office of Financial Sanctions Implementation (“OFSI”) launched new online forms for submitting licence applications, reporting suspected breaches and other key reports such as frozen assets. This initiative marks a significant step forward in OFSI’s ongoing efforts to modernise and simplify its services. The new forms are designed to enhance clarity, speed and accessibility, improving the overall experience for those needing to engage with OFSI.

The forms will initially run alongside existing processes during a transition phase. While their use is not mandatory at this stage, OFSI encourages all users to familiarise themselves with the new forms and begin using them as soon as possible. To support this, downloadable versions of the forms have been made available, allowing users to preview the questions and complete them offline before submitting them via email. This will help users become accustomed to the format and requirements ahead of the full transition.

OFSI will notify stakeholders in advance before the old forms are phased out, providing updates through e-alerts and their website. OFSI values feedback from its users and encourages those using the forms to share their thoughts via email at ofsi@hmtreasury.gov.uk. Feedback will be used to guide future improvements.

Key Benefits of the New Online Forms:

Submissions will be delivered directly to the relevant teams at OFSI, speeding up the processing and response times. Built-in guidance and mandatory fields will help ensure all required information is provided correctly, reducing the need for additional follow-up questions and allowing for quicker case handling. The new forms are designed to meet high accessibility standards, ensuring usability for all users.

Upon submission, a confirmation email will be sent, containing the details of the submitted form. To ensure smooth completion of the forms, users are advised to review the downloadable versions and prepare all necessary information and documents in advance. It is also recommended that the forms be completed in a single session, as they cannot be saved midway, though details will be retained for up to 20 hours if the browser is not closed.

For assistance, each form contains guidance on how to complete it. Additional support is available via email at ofsi@hmtreasury.gov.uk.

Available Forms:

• Licensing Application: For new licence applications or amendments to existing applications.

• Financial Sanctions Suspected Breach Reporting: To report breaches related to financial sanctions implementation.

• Oil Price Cap Suspected Breach Reporting: For breaches related to the UK’s ban on Russian oil transportation and associated services.

• Licence Reporting: Includes forms for reporting activities under various licences such as the Legal Services General Licence.

• Frozen Assets Reporting: To report frozen assets related to designated persons.

• Designated Persons Reporting: For those designated under specific regulations to report the funds or economic resources they control.

• Compliance Reporting: For transactions conducted under exceptions from financial sanctions.

These new online forms are expected to be beneficial tools in enhancing OFSI’s ability to manage and respond to financial sanctions effectively.

In Lotus Proje Akaryakıt Enerji Madencilik Telekominikasyon İnşaat Sanayi Taah Ve Tic AŞ v Turkmenistan (ICSID Case No ARB/24/13), the ICSID arbitration tribunal upheld Turkmenistan's application for security for costs. The tribunal directed the claimant, Lotus, to provide $2 million in security, based on the criteria set forth in Rule 53 of the ICSID Arbitration Rules 2022 (the “Rules”). The tribunal’s decision followed an evaluation of several factors, with Lotus being given the flexibility to choose the most suitable and cost-effective method to meet the security requirement, such as posting a guarantee, depositing funds in escrow or securing after-the-event insurance.

In March 2025, Turkmenistan requested an order from the tribunal for Lotus to provide $3 million in security for costs. Turkmenistan’s application highlighted that Lotus, a Turkish-incorporated claimant, had been declared bankrupt in 2016 and, therefore, was unable to satisfy an adverse costs order. Additionally, Lotus was receiving third-party funding from SSL, but the funding agreement did not explicitly cover adverse costs.

The tribunal reviewed the application in light of Rule 53, which provides a "complete code" for addressing security for costs applications. The tribunal systematically evaluated the factors listed in Rule 53(3), including:

• Ability to comply with an adverse costs decision (Rule 53(3)(a)): Lotus did not demonstrate that SSL, its third-party funder, was obligated to cover any adverse costs, as the funding agreement did not expressly mention this.

• Willingness to comply with an adverse costs decision (Rule 53(3)(b)): While Lotus' parent company had failed to comply with an adverse costs decision in a separate arbitration, this did not provide sufficient evidence to suggest that Lotus itself would be unwilling to comply in the current case.

• Effect of ordering security on Lotus' ability to pursue its claim (Rule 53(3)(c)): The tribunal found that while Lotus would struggle to pay a typical costs award, it had adequate funding to proceed with the arbitration. The tribunal concluded that ordering security was the best way to ensure that both parties could maintain their positions in the case.

• The parties' conduct (Rule 53(3)(d)): Both parties had been cooperative throughout the proceedings and therefore, this factor was neutral.

Taking into account investment arbitration costs data and Turkmenistan’s previous arbitration costs, the tribunal set the security at $2 million. While the tribunal acknowledged that the cost of providing security was not insignificant, it determined that this expense could be recoverable should Lotus prevail in the arbitration.

The decision represents a significant development in the interpretation and application of Rule 53, which aims to ensure that arbitration proceedings are not delayed or impeded by a party’s inability to cover the costs of an adverse award.

In Thales v Vitrus (ECLI:NL:GHAMS:2025:1631), the Amsterdam Court of Appeal recently ruled on a request to annul an ICC arbitration award. The court suspended the annulment proceedings and remitted the case to the arbitral tribunal, after finding that the award was made in a manner that violated public policy, but allowing the tribunal an opportunity to rectify the identified defect.

The dispute arose from an agreement between a Brazilian company, Vitrus, and a Dutch company, Thales, for the construction of a satellite system. Allegations of corruption emerged against Vitrus’ principal, which led Thales to suspend payments and terminate the agreements. Vitrus initiated ICC arbitration in Amsterdam, seeking outstanding payments, while Thales counterclaimed, alleging breaches of warranties related to ethical business conduct.

The tribunal ruled in favor of Thales, dismissing Vitrus' claims and upholding the counterclaim. The tribunal's decision relied heavily on evidence, including depositions from employees of a Brazilian company, Odebrecht, which had been presented in an indictment by the Brazilian public prosecutor.

Vitrus sought annulment of the award before the Dutch courts, arguing that the tribunal’s reliance on evidence that had been declared inadmissible by Brazil’s highest court violated public policy. The court noted that the Brazilian court had referred to the depositions as "inevitably compromised" and "lacking minimum evidential basis", making their use in the arbitration problematic.

Despite the tribunal's reasoning that the evidence could still be used despite its inadmissibility in Brazilian criminal proceedings, the Court of Appeal pointed out that the tribunal failed to adequately explain whether the inadmissibility was "technical" or substantiate how it weighed the concerns regarding the fairness of the evidence collection process.

While the court concluded that the use of this evidence violated public policy, it did not annul the award. Instead, the court suspended the annulment proceedings and remitted the case back to the tribunal, providing it with an opportunity to address the identified public policy violation. The tribunal may remedy the issue by reopening the proceedings or taking other appropriate actions.

Although the Dutch Arbitration Act typically precludes remission of awards made in violation of public policy, the Court of Appeal took a more flexible approach, acknowledging ongoing academic discussions about the correction of such defects. The court reasoned that the public policy issues raised by the award were capable of being addressed and that the tribunal's decision hinted at the possibility of other admissible evidence being available.

This decision marks an important development in the approach to public policy violations in arbitration, as the court allowed the possibility of remedying the defect instead of issuing a full annulment.

In Appeal No 657 of 2025, the Dubai Court of Cassation overturned a decision by the Dubai Court of Appeal (“COA”) which ruled that an anti-suit injunction (“ASI”) issued by an arbitral tribunal was invalid. The case stemmed from a UAE-seated ICC arbitration where the tribunal had issued an ASI to prevent a party (“A Co”) from pursuing parallel court proceedings in relation to a dispute over a Memorandum of Understanding that included an arbitration clause.

A Co challenged the tribunal’s interim order before the COA, arguing that it was in conflict with UAE public policy and violated its constitutional and statutory right to access justice through the courts. Additionally, A Co contended that an ASI was not a permitted interim measure under article 21 of the UAE Federal Arbitration Law.

On 28 April 2025, the COA annulled the ASI and ordered the opposing party (“B Co”) to pay costs. In response, B Co appealed the decision to the Dubai Court of Cassation, arguing that under article 21 of the FAL, arbitral tribunals have exclusive authority to issue interim measures, including ASIs, and to modify or revoke them. B Co also highlighted that A Co had not requested the tribunal to amend or revoke the ASI but had instead approached the COA directly.

The Court of Cassation allowed the appeal, reinstating the tribunal’s ASI. It clarified that, under article 21, only the tribunal has the authority to issue, amend, suspend or cancel interim measures during arbitration proceedings. The Court of Cassation determined that the COA had overstepped its jurisdiction by intervening in a matter that was within the exclusive domain of the tribunal. As a result, the Court of Cassation set aside the COA’s judgment and dismissed A Co’s original application to set aside the ASI.

This decision underscores the Court of Cassation’s commitment to respecting the arbitral tribunal’s discretion in managing arbitration procedures, including the issuance of interim orders and its role in ensuring compliance with arbitration agreements.

In Semenya v Switzerland (Application no 10934/21), the Grand Chamber of the European Court of Human Rights (“ECtHR”) ruled that Switzerland violated Article 6(1) of the European Convention on Human Rights (“ECHR”) by failing to provide a fair hearing to former Olympic champion Caster Semenya. The court determined that Switzerland’s Supreme Court had not conducted a "particularly rigorous examination" or "in-depth judicial review" of the Court of Arbitration for Sport (“CAS”) award, which upheld Semenya’s exclusion from international women’s athletics competitions due to her naturally elevated testosterone levels.

The dispute arose after Semenya challenged the eligibility requirements imposed by World Athletics (formerly the IAAF) for female athletes with differences of sex development (“DSDs”). These regulations required Semenya to medically suppress her testosterone levels in order to compete. After the arbitration proceedings, the CAS ruled against her, upholding the regulations. Semenya then sought to set aside the CAS award in Switzerland, arguing that it violated public policy, specifically her fundamental rights under the ECHR.

The Swiss Supreme Court dismissed her appeal, finding no violation of substantive public policy in the CAS decision. Semenya filed an application with the ECtHR, alleging violations of her rights under Articles 6 (right to a fair trial), 8 (right to private life), 13 (right to an effective remedy) and 14 (prohibition of discrimination) of the ECHR.

The ECtHR’s Third Section Chamber initially upheld Semenya’s claims, finding that Switzerland had failed to uphold her right to be free from discrimination and to have an effective remedy, particularly with regard to her private life and dignity. However, the Swiss government requested a referral to the Grand Chamber, which upheld Switzerland's preliminary objection in part, but ultimately found that Switzerland had violated Semenya’s right to a fair trial under Article 6.

The Grand Chamber explained that the Swiss Supreme Court’s review of the set-aside application did not meet the required standard. It emphasised that where an athlete is subject to compulsory arbitration under CAS, particularly when fundamental rights like bodily integrity are at stake, the reviewing court must conduct a "particularly rigorous examination" of the arbitration award. This is especially important when the dispute concerns the athlete’s personal rights, such as the right to compete and the proportionality of the regulatory measures imposed.

The Grand Chamber noted that while Swiss law limits the review of arbitral awards to issues of public policy, the Swiss Supreme Court did not adequately examine whether the CAS award was proportionate and compatible with Semenya’s fundamental rights. The court’s failure to conduct this in-depth review was found to constitute a violation of Article 6(1) of the ECHR.

While the decision is specific to the unique circumstances of the case, it raises important questions about the relationship between sports arbitration and fundamental human rights, particularly for athletes subjected to mandatory arbitration. The ruling may have broader implications for how public policy and human rights are considered in the context of arbitral awards, especially in disputes involving professional athletes.

In a partially dissenting opinion, Judges Eicke and Kucsko-Stadlmayer raised concerns about the potential for this judgment to be extended to other forms of arbitration and the challenge to arbitral awards in more general terms, suggesting that such a "particularly rigorous examination" should remain limited to cases involving compulsory arbitration between athletes and sports governing bodies.

This ruling is a significant step in ensuring that athletes’ fundamental rights are not overlooked in arbitration processes, particularly when the arbitration is imposed by sports federations with significant regulatory powers.

We are pleased to announce that Benjamin Wells and Ceyda Ilgen of Belgravia Law will be attending Singapore Convention Week 2025, which will take place from 25 August 2025 to 29 August 2025. This event offers an excellent opportunity for clients, colleagues and industry peers to reconnect, discuss the latest developments and explore potential collaborations in international arbitration.

As one of the most significant events for legal professionals in the arbitration field, Singapore Convention Week 2025 brings together experts from around the globe to exchange insights, share knowledge and foster new opportunities for collaboration. It promises to be a dynamic platform for professionals to engage in meaningful discussions and professional growth.

We invite all our clients and colleagues attending Singapore Convention Week 2025 to reach out to Ben and Ceyda for an enriching exchange of ideas and opportunities for collaboration. This event is a fantastic opportunity for all professionals in the field to stay ahead of the curve and build strong networks within the international legal community.

AI developers who source data from online platforms to train General Purpose AI (“GPAI”) models are now required to compile a list of the websites they most frequently source data from and make this information publicly available on their websites. This new obligation is part of the EU AI Act, which will begin to take effect on 2 August 2025. The requirement aims to increase transparency in the training of GPAI models, which often involve large amounts of data, including copyrighted content.

Dr Nils Rauer, an expert in AI regulation and intellectual property law, explained that Article 53(1)(d) of the EU AI Act obligates providers of GPAI models to prepare and publicly release a detailed summary of the data used in training their models. This summary should include information from both the pre-training and training phases and focus primarily on copyrighted content, although it covers all types of proprietary information used in the training process.

The new template released by the AI Office provides a framework for companies to comply with this obligation. It emphasises the importance of transparency but also takes into account the need to protect trade secrets and confidential business information. While providers are not required to disclose specific details about the data used, they must offer a summary that provides enough detail to ensure meaningful transparency and enable parties with legitimate interests to exercise their rights under EU law.

Providers of GPAI models that use data scraped from online sources must list the top 10% of domain names from which they sourced the most data, with smaller providers only required to list the top 5% or up to 1,000 domains. Private datasets not commercially licensed by rightsholders need to be disclosed only if they are publicly known or if the provider chooses to disclose them.

The summary must cover all stages of model training, from pre-training to post-training and should be updated to reflect any new data used in the training process. The information must be published on the provider's website and any other channels used to distribute the GPAI models.

The rules set out in Article 53 of the EU AI Act will take effect on 2 August 2025, but providers of GPAI models placed on the market before this date have until 2 August 2027, to comply with the new disclosure requirements. However, providers may be allowed to exclude certain information if they cannot access it or retrieving it would impose a disproportionate burden.

Failure to comply with the requirements outlined in the new template could result in fines of up to 3% of a provider's global turnover or €15 million, whichever is higher. Enforcement of these rules will begin on 2 August 2026. The publication of the template follows the release of the finalised GPAI code of practice, which providers can voluntarily follow to demonstrate compliance with the EU AI Act's provisions.

Google has launched a new AI-powered tool in the UK that will alter how search results are displayed, presenting AI-generated answers in a conversational tone. This new feature, which users can opt for by selecting the "AI Mode", offers responses with fewer links to external websites compared to traditional search results, which usually show a list of clickable links.

Although this feature will not replace the existing search platform that processes billions of queries each day, it marks a significant shift in the search experience. The introduction of AI tools like this has sparked concerns among businesses and news organisations that depend on traffic from search results. These entities rely on Google to direct users to their websites, often paying for prominent positions in the search rankings. The new tool, with its AI-generated summaries, is predicted to reduce the amount of traffic that businesses receive from search results, as fewer direct links are included in the AI-generated answers.

Some businesses, including news outlets, have already reported a decrease in traffic since the launch of the AI Overview feature, which summarises search results. For instance, the Daily Mail has observed a drop in clicks from Google search results by about 50% on both desktop and mobile platforms. Hema Budaraju, Google's Product Manager for Search, acknowledged that the company has not yet decided how AI Mode will affect advertising revenue or whether businesses will be able to pay to be included in AI-generated responses.

Despite these concerns, Budaraju defended the new feature, suggesting that it will provide users with an improved search experience. She argued that AI would enable users to ask more natural, complex questions, making it easier to discover information in new ways.

The new AI Mode, powered by Google's Gemini platform, has already been introduced in the US and India and is gradually rolling out in the UK. For now, it remains an optional feature, accessible via a tab or directly within the search box. Google stated that the move was in response to changing search habits, with people now often asking more specific and complex questions.

A recent example from Google demonstrated how AI Mode works, such as helping users find places to take their family strawberry picking. The responses included fewer business links than usual and focused more on providing comprehensive answers. This marks a departure from the traditional model, where businesses typically appear at the top of the search results with prominent links.

While some studies, including one by Pew Research, suggest that people are clicking on fewer links when AI summaries are at the top of the page, Google disagreed with the study's methodology. The growing use of AI in search has also raised concerns among news organisations, with campaign groups like Foxglove highlighting how AI-generated summaries are often inaccurate and keep users on Google’s page rather than directing them to original content. This could significantly undermine the revenue models of news outlets.

In addition to these issues, environmental concerns have been raised about the energy consumption of AI systems, particularly as AI requires large data centres to operate. Google has stated its commitment to sustainability, promising to continually develop more environmentally friendly technology. Despite these challenges, Google remains optimistic about the potential of AI to enhance the search experience and address the evolving needs of users.