Jivraj v Hashwani (Rev 2)

An arbitrator appointed under a contract to determine disputes personally provides services under a contract of employment for the purposes of the Employment Equality (Religion and Belief) Regulations 2003. The prohibition on discrimination in arrangements for, or offers of, employment can therefore apply to a private contractual restriction limiting appointments to members of a religious community. A religious requirement is exempt only where it is a genuine occupational requirement, proportionate to apply, and necessary having regard to the employer’s ethos and the nature of the work. That exception did not apply where arbitrators had to decide disputes under English law. If the discriminatory term is integral to the agreement to arbitrate, it cannot be severed.

The parties entered into a joint venture agreement containing an arbitration clause. It required all arbitrators to be respected members of the Ismaili community and holders of high office within it. After a dispute arose, Mr Hashwani appointed Sir Anthony Colman and sought an order under section 18(2) of the Arbitration Act 1996. Mr Jivraj sought a declaration that the appointment was invalid because Sir Anthony was not an Ismaili.

Steel J held that the Regulations did not apply to arbitrators, but also considered that the religious requirement would fall within the genuine occupational requirement exception if they did apply. He further held that the requirement was not severable. The Court of Appeal considered the scope of the Regulations, the regulation 7 exception, and severance.

1. Appeal allowed in part. The first declaration made by Steel J was set aside, but the declaration that Sir Anthony Colman’s nomination was invalid was affirmed. Clause 8(1) of the joint venture agreement was void in its entirety.
2. An arbitrator ordinarily performs work personally under a contract with the parties. The arbitrator’s adjudicative status does not prevent that relationship from constituting employment within the Regulations. The appointing parties are employers and the arbitrator is an employee for those purposes.
3. The arbitration agreement constituted arrangements under regulation 6(1)(a) for determining to whom employment should be offered. Its religious restriction also engaged regulation 6(1)(c), because complying with it required the parties deliberately not to offer arbitral work to persons outside the Ismaili community. The prohibition was not confined to public recruitment or conventional employment.
4. Regulation 7(3) did not save the restriction. Although the Ismaili community had an ethos based on religion or belief, the arbitrators had to determine disputes according to English law and natural justice. That function did not require a particular religious ethos, so Ismaili membership was not a genuine occupational requirement.
5. Under paragraph 1(1) of schedule 4, the discriminatory term was void. A term can be severed only if its removal does not make the remaining agreement substantially different from what the parties intended. The restriction on tribunal composition was integral to the agreement to arbitrate and could not be removed without substantially changing it. The clause therefore stood or fell as a whole.

• Court of Appeal (Civil Division) [2010] EWCA Civ 712: allowed the appeal to the extent of setting aside the first declaration, but affirmed the declaration that Sir Anthony Colman’s nomination was invalid; clause 8(1) was void in its entirety.
• High Court of Justice, Queen’s Bench Division, Commercial Court [2009] EWHC 1364 (Comm): held that the Regulations did not apply to arbitrators, granted a declaration that the appointment was invalid, dismissed Mr Hashwani’s claim, and held alternatively that the religious requirement would be exempt under regulation 7 and was not severable.