Posts tagged: discrimination

Jivraj in the Supreme Court

I understand that the hearing of the appeal in Jivraj v Hashwani (see posts of 20 July and 8 December 2010 below) will take place in the Supreme Court in early April with both the LCIA and ICC intervening.

Watch this space!

Discriminatory Choice of Arbitrators 2

The decision of the Court of Appeal (see post of 20 July) in Jivraj has generated considerable debate within the arbitration community. In particular, there is widespread concern that the decision applies to arbitration agreements which place restrictions on the nationality of individuals who may be appointed as arbitrators. This includes agreements which incorporate institutional rules, such as the ICC and LCIA Rules, that contain nationality provisions.  Both are seeking to intervene in the appeal.

Both parties applied for permission to appeal to the Supreme Court, with the ICC and LCIA intervening in support of the permission application.  The Supreme Court has recognised the importance of the issues in this case and given permission to appeal. The outcome will provide much needed clarity and certainty for the international business community.

The Appeal is expected to be heard in the second half of 2011.

Discriminatory choice of arbitrators

The Court of Appeal has decided that an arbitration agreement requiring an arbitrator to be a member of a particular religious group is void.  That may appear to be of little consequence to many commercial arbitrations but as the wording of the regulations in issue, the Employment Equality (Religion and Belief) Regulations 2003, are materially the same as other anti-discrimination laws the ruling could also apply to nationality and age discrimination.

 The matter came before the Court as Jivraj v Hashwani [2010].  The arbitration clause provided that “all [three] arbitrators shall be respected members of the Ismaili community and holders of high office within the community.”

 The Employment Equality Regulations prohibit an employer discriminating on grounds of religion in relation to employment.  Employment is widely defined and as the appointment of an arbitrator invariably involves the personal performance of work that was within the definition of employment and hence covered by the Regulation.  By requiring the arbitrators to have a particular religious belief the clause offended against the Regulation and any term unlawful under the Regulations is void.  That applied to the entire clause as the criteria for the arbitrators could not be severed.   

 The Court held that the exemption of justification (the employer having a religious ethos and being of a particular religion was a genuine occupational requirement) did not apply, as the arbitrators were to apply English law.  Membership of the Ismaili community was not necessary to apply English law – the position might have been different had the arbitrators been obliged to apply the principles of good faith within the community.

 Having a chairman from a different country (e.g. ICC Article 9(5) provides “… the chairman of the Arbitral Tribunal shall be of a nationality other than those of the parties.”) would be, prima facie, discriminatory (as nationals from the countries of the parties could not comply) but it might be a legitimate requirement in having a fair resolution by an impartial tribunal.   Having a particular legal qualification may be indirectly discriminatory (as more English can comply with a requirement to be an English lawyer then, say, French) but that too may be justified if the arbitrators must apply English law. Similarly being a lawyer of a number of years standing would discriminate on the grounds of age but might be justified on the grounds of relevant legal experience.

 This decision will only directly apply if the seat of the arbitration is in the UK but as much of our discrimination law originates from EU law the position may well be the same in other EU states.

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