The parties here entered into a joint venture agreement to invest in real estate property in various parts of the world including Canada. The agreement included an arbitration clause stating that any dispute, diff erence or question arising between the investors would be referred to arbitration. The arbitration was to take place in London. The parties terminated their venture and the matter was referred to arbitration. Mr Hashwani appointed Sir Anthony Coleman as arbitrator and asked Mr Jivraj to appoint an arbitrator. There would then have been a third appointment as chairman of the arbitration panel. However, Mr Jivraj said that Sir Anthony Coleman’s appointment was invalid because of the terms of the arbitration agreement. The arbitration agreement required that the dispute would be referred to three arbitrators, one to be appointed by each party and the third to be the president of the H.H. Aga Khan National Counsel for the United Kingdom. However, the clause went on to state in its fi nal sentence:
“All arbitrators shall be respected members of the Ismaili community and holders of high offi ce within the community.”
Mr Jivraj sought a declaration that the appointment of Sir Anthony Coleman was not valid because he was not a member of the Ismaili community. The key issue before the CA was whether the agreement (although lawful when it was made) had become unlawful and void because it contravened the Employment Equality (Religion and Belief ) Regulations 2003, and the Human Rights Act 1998.
The Regulation arose from an EU Directive concerning discrimination on the grounds of religion or belief, disability, age or sexual orientation. The Regulation was aimed at making void agreements which sought to refuse or deliberately omit to off er employment on the grounds of religion or belief.
The CA considered that the arbitration clause restricted the off er of employment as arbitrator purely on religious grounds. It was therefore void. The second question was whether that fi nal sentence in the arbitration clause could be severed, so leaving the rest of the arbitration clause intact. The Court of Appeal came to the view that if they simply deleted the fi nal sentence then the agreement would be substantially diff erent from that which had been originally intended. As a result, the arbitration clause was void in its entirety.