In the case of Jivraj v Hashwani [2011] UKSC 40, the Supreme Court recently ruled on whether arbitrators were subject to equality laws.

The case concerned a joint venture agreement between Mr Jivraj and Mr Hashwani, which contained an arbitration clause providing that, in the event of a dispute, resolution should be sought by the appointment of three arbitrators, each from the Ismaili community. A dispute arose in relation to the arbitration clause in 2008 when Mr Hashwani appointed an arbitrator who was not a member of the Ismaili community. As a result, Mr Jivraj commenced proceedings in the Commercial Court seeking a declaration that the appointment of the arbitrator was invalid because he was not a member of the Ismaili community.

The principal issue in dispute was whether the arbitration agreement became void due to the implementation of the Employment Equality (Religion or Belief) Regulations 2002 (the Regulations), on the ground that it constituted an unlawful arrangement to discriminate on grounds of religion when choosing between people offering personal services.

At first instance, the judge held that the term did not constitute unlawful discrimination as the arbitrators were not "employed" within the meaning of the Regulations. It was also held that if the appointment of the arbitrators did fall within the scope of the Regulations, the requirement for arbitrators to be members of the Ismaili community constituted a "genuine occupational requirement" which it was proportionate to apply within the Regulations. The first instance judge also commented that the requirement was not severable from the arbitration provision as a whole, so if it were held to be invalid, the agreement would be void.

The matter then progressed to the Court of Appeal, which reached a different conclusion, finding  that the appointment of an arbitrator involved a contract for the provision of services which constituted "a contract personally to do any work", and satisfied the definition of "employment" in the Regulations. The Court of Appeal concluded that the appointer was therefore an "employer", and that the restriction of appointment to members of the Ismaili community was unlawful discrimination on religious grounds.

On further appeal, the Supreme Court examined a range of European and domestic case law regarding the definition of "employment". The Supreme Court unanimously allowed the appeal on the ground that "an arbitrator is not a person employed under a contract personally to do work within the meaning of the regulations, which do not therefore apply." The judgment further stated that "the judge [at first instance] had correctly found that the Ismaili community had demonstrated an ethos, based on religion, for dispute resolution contained within that community."

This ruling has been greeted positively given the discomfort many felt over the categorisation of arbitrators as "employees" of those appointing them and their duty of impartiality. There had also been considerable concern that a large number of arbitration agreements would have fallen foul of similar equality laws and been struck out in their entirety if the Court of Appeal decision had not been overturned.