Supreme Court Hearing of Hashwani v Jivraj

On 6 - 7 April 2011, the Supreme Court of the United Kingdom will hear the appeal of a case that has been the subject of immense discussion in the international legal fraternity where the Court of Appeal decided that an arbitration agreement which stated that the arbitrator must be an Ismaili Muslim was void and a breach of the Employment Equality (Religion or Belief) Regulations 2003.

The Court of Appeal also decided for the very first time that an arbitrator is an “employee'” of the disputing parties.

This judgment is so crucial that arbitration organizations such as the LCIA and the ICC have made successful applications to intervene in the proceedings. More recently, the H H Aga Khan Arbitration and Conciliation Board has also made an application to intervene.

Background

Two Pakistani businessmen who are both members of the Shia Ismaili Muslim community concluded a joint venture agreement in 1981 which contained an arbitration clause stating that any arbitrator appointed must be an Ismaili Muslim.

A dispute arose and Mr. Hashwani exhausted attempts to settle the matter within the Ismaili community. He thereafter appointed a Jewish former English High Court Judge, Sir Anthony Coleman, as his arbitrator. Mr. Jivraj objected on the basis that Sir Anthony was not an Ismaili Muslim.

In July 2010 the English Court of Appeal held that:

1) Arbitrators were “employees” of the parties and, therefore, subject to Employment Equality (Religion or Belief) Regulations 2003 which prohibit discrimination in employment on grounds of religion or belief;

2) The Arbitration Agreement providing that the arbitrators must be Ismaili was, therefore, void.

The result of the Hashwani Jivraj case has raised concerns about whether arbitration agreements which place restrictions on nationality or religion of an arbitrator are valid. Furthermore, religious dispute resolution panels are on tenterhooks to see if the decision of the Supreme Court will impact their ability to decide disputes for their own community members.

The recent ruling means that the contractors of any description can now be considered as an “employee” and no private individual in the UK can discriminate against the appointment of an independent contractor, be it solicitor, plumber or arbitrator on grounds of race, religion or gender.

Zaiwalla & Co Solicitors, London are acting on behalf of Mr. Hashwani who succeeded in the English Court of Appeal.