The English Court of Appeal declined to uphold an arbitration clause in a joint venture agreement which required the arbitrator to be ‘a respected member of the Ismaili community’: Jivraj v Hashwani, [2010] EWCA Civ 712 [Link available here]. The court found that this clause violated UK and EU human rights legislation preventing discrimination in ‘employment’.

The UKSC has unanimously reversed the Court of Appeal: Jivraj v Hashwani, [2011] UKSC 40 [Link available here] The Supreme Court held that arbitrators are independent providers of services, not employees; they are not in a relationship of subordination but instead act as quasi-judicial adjudicators of disputes referred to them under contract. The CA took too legalistic a view and was incorrect not to recognise that being of a particular religion or belief can be a relevant criterion for appointment. As a result, the particular clause limiting potential arbitrators to members of the Ismaili Muslim community did not offend employment equity laws.

The arbitration community can breathe a sigh of relief, having feared that the CA’s ruling would also preclude clauses restricting appointment on the basis of nationality. Such clauses are frequently used to promote neutrality where there is a sole arbitrator or a panel of three in an arbitration involving multi-state parties.