In a much anticipated ruling delivered on 27 July 2011, the UK Supreme Court has clarified the status of arbitrators and confirmed that they are not employees, and that arbitration agreements do not therefore fall within the scope of the UK anti-discrimination legislation: Jivraj (Appellant) v Hashwani (Respondent) [2011] UKSC 40.

This decision marks an end to the uncertainty created by the Court of Appeal’s previous finding that the Employment Equality (Religion and Belief) Regulations 2003 rendered void an arbitration agreement which provided for the appointment of arbitrators from a particular religious community on the basis that it was discriminatory.

Although the facts of the case concerned a requirement relating to membership of a particular religious community, the Court of Appeal’s previous ruling in June 2010 had led to broader concerns about the inclusion of nationality requirements for arbitrators in arbitration agreements. As a precaution, we had advised clients to exclude from existing and future arbitration agreements any institutional rule or requirement regarding nationality (such as article 6 of the LCIA Rules, or article 9(5) of the ICC Rules) or other specific characteristics of potential arbitrators, in case such requirements could also be found to infringe UK anti‑discrimination legislation and render the entire arbitration agreement void.  

As a result of the Supreme Court’s ruling, this doubt as to whether arbitration agreements must comply with UK anti‑discrimination legislation no longer exists, and it is no longer necessary to carve out such nationality provisions from arbitration agreements. We are in the process of updating our model forms to reflect this clarification. In the meantime, please speak to one of the listed contacts or a member of the arbitration group if you are advising on the inclusion of an arbitration clause.

For more details see our e-bulletin dated 27 July 2011 available on our website at http://www.herbertsmith.com/NR/rdonlyres/DA5690B3-0365-4A89-ADD5-C4BEEF21ABF8/0/JIVRAJ.html.