## Facts

- Two members of the Ismaili community entered a 1981 joint venture agreement governed by English law to make worldwide real estate investments.
- The agreement’s arbitration clause required disputes to be arbitrated by three arbitrators, each a respected member of the Ismaili community.
- The joint venture ended in 1988, but disputes later remained unresolved.
- In 2008, one party sought arbitration and nominated a retired Commercial Court judge who was not Ismaili.
- The other party objected, asserting the nomination violated the Ismaili-only requirement.
- The nominating party argued the religious criterion was unlawful under the Employment Equality (Religion or Belief) Regulations 2003, which restrict certain religious discrimination in “employment” arrangements.

## Issues

1. Whether an arbitrator appointed under an arbitration agreement works under a “contract personally to do any work” such that the appointment falls within “employment” regulated by the Employment Equality (Religion or Belief) Regulations 2003.
2. If the Regulations applied, whether limiting arbitrators to Ismailis constituted unlawful religious discrimination or could be justified as a genuine occupational requirement.
3. If unlawful, whether the religious qualification could be severed or instead invalidated the arbitration clause.

## Decision

- The Supreme Court allowed the appeal and reversed the Court of Appeal.
- Arbitrators are not “employees” within the meaning of the 2003 Regulations; they are independent adjudicators rather than persons in a relationship of subordination.
- Because the Regulations did not apply, the Ismaili-only requirement was not rendered void under those Regulations.
- The Court did not need to decide the genuine occupational requirement or severance issues, but made observations suggesting the religious requirement could potentially be justified, and that severance might be the proper remedy if the words were unlawful.

## Legal Principles

- Anti-discrimination rules directed at “employment and occupation” apply primarily to relationships marked by subordination, not to independent service providers acting autonomously.
- An arbitrator’s defining functions—independence and impartial adjudication—are inconsistent with being treated as an “employee” of either appointing party for equality legislation focused on employment relationships.
- Arbitration party autonomy generally permits qualification requirements for arbitrators where not prohibited by applicable statutory regimes.
- If a discrete contractual term is unlawful, courts may consider severing the offending words rather than invalidating an entire arbitration clause, depending on whether the remainder can operate without fundamentally altering the bargain.

## Conclusion

The U.K. Supreme Court held that appointing an arbitrator under a private arbitration clause is not “employment” for purposes of the Employment Equality (Religion or Belief) Regulations 2003, so the contractual requirement that arbitrators be members of the Ismaili community was not invalidated by those Regulations.


Jivraj v. Hashwani, [2011] UKSC 40 (U.K. 2011)