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Appointing Arbitrators: Is Discrimination Allowed?

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[Thanks to Simon Oakes of Outer Temple Chambers for providing this case summary]

Is it possible to discriminate on religious grounds in the appointment of arbitrators? Yes, was the unanimous conclusion of the Supreme Court in Jivraj v Hashwani. 

The case concerned a failed joint venture; the joint venture agreement contained an arbitration clause. That clause provided that all arbitrators were to be respected Ismailis. One party tried to appoint a non-Ismaili arbitrator, arguing that this provision fell foul of the 2003 Employment Equality (Religion or Belief) Regulations (now covered by the Equality Act 2010) which prevented employers from discriminating on religious grounds. 

Although appointing an arbitrator involves the retention of their services, similarly to instructing a solicitor, the Supreme Court held that arbitrators are not 'employed' and therefore are not covered by the Regulations. Merely having a contract to do work is not enough. 

The Regulations did not apply here because arbitrators perform an independent role. Applying the principles from the case of Allonby, arbitrators are not employed 'under a contract of work' - they are not in subordination to the person receiving the service, nor under their direction. Rather, they are independent service providers. The Court also doubted whether people like plumbers would be caught by the Regulations, but did not express a decided view. 

The Supreme Court also considered the s.7 exception which allows employers to discriminate when being of a particular religion or belief is a 'genuine occupational requirement'. The Court held that the test is not one of 'necessity' but rather, whether the discrimination was legitimate and justified.