Jivraj v Hashwani

An arbitration agreement requiring arbitrators to belong to a particular religious community is not, merely for that reason, unlawful discrimination. Arbitrators are not ordinarily employed under a contract personally to do work because they are independent, impartial decision-makers with no client or controlling employer. The Employment Equality (Religion or Belief) Regulations 2003 therefore do not apply to their appointment.

Even if the Regulations applied, the religious requirement would constitute a genuine occupational requirement proportionately imposed in pursuit of a legitimate dispute-resolution aim. Convention rights do not ordinarily operate directly between private contracting parties, and the agreed restriction was justified and waived. If the requirement were invalid, it could not be severed without rewriting the carefully structured arbitration clause.

The parties entered into a 1981 joint venture agreement containing an arbitration clause. It required three arbitrators, including a specified community office-holder, and provided that all arbitrators had to be respected members of the Ismaili community and holders of high office within it.

Following an unresolved dispute, Mr Hashwani sought to appoint Sir Anthony Colman, who was not an Ismaili. Mr Jivraj challenged that appointment. The court considered whether the religious qualification was unlawful under the Employment Equality (Religion or Belief) Regulations 2003, the Human Rights Act 1998, or the common law, and whether any invalid requirement could be severed from the arbitration clause.

1. The clause was valid and enforceable. The requirement that arbitrators be members of the Ismaili community did not permit Mr Hashwani to appoint a non-Ismaili arbitrator.
2. The Employment Equality (Religion or Belief) Regulations 2003 were directed to employment. Although an arbitrator’s appointment may have contractual features, an arbitrator is independent, impartial, owes duties to both parties, cannot be instructed as to the manner or outcome of the work, and has no client. The closest analogy is a judge. The appointment is therefore not employment under a contract personally to do work for the purposes of the Regulations. The provisions concerning establishments, vicarious liability and employment tribunals reinforced that conclusion.
3. Alternatively, the requirement would satisfy the genuine occupational requirement exception. The evidence showed that dispute resolution within the Ismaili community formed part of its religious ethos. In light of the parties’ freedom under section 1 of the Arbitration Act 1996 to agree how disputes should be resolved, the requirement was proportionate.
4. The Human Rights Act 1998 supplied no basis for invalidating the agreement. The selection of an arbitrator from a religious community was not within the relevant ambit of Article 6, and any interference was justified. The parties were private persons, so Convention rights did not operate directly between them under sections 3 or 6. The claimant was not the direct victim of any discrimination against a potential arbitrator, and Article 9 created no right to be considered for appointment by private parties.
5. The common law public-policy argument failed. Parliament had legislated extensively on discrimination, and it was inappropriate for the court to create a further prohibition by filling an alleged statutory gap.
6. If the religious qualification had been invalid, it could not have been severed. Although the arbitration clause was separable, deleting the final sentence would substantially alter the parties’ carefully structured choice of tribunal, cost, privacy and dispute-resolution process. The court could not rewrite the agreement.