Dispute Resolution Group Newsletter Third Case Review of 2010

We are pleased to present our third case review of 2010 which contains summaries of selected cases which will impact on the way in which parties conduct litigation and their business dealings.

In this review we consider recently decided cases on whether an arbitration agreement can stipulate that arbitrators must come from a particular religious group, varying a freezing order and the meaning of "ordinary course of business" and waiver of privilege in relation to an application to sanction of a scheme of arrangement.

We also consider cases giving guidance on the need to withdraw a Part 36 Offer, cases on pre-action admissions and disclosure and the scope of the Rome II Regulation

Arbitration

Jivraj v Hashwani [2010] EWCA Civ 712

Whether arbitration agreement can stipulate arbitrators must come from a particular religious group

The appellant and respondent entered into an arbitration agreement which stipulated that all the arbitrators had to be high office holders within the Ismaili community. The appellant applied to the English courts seeking an order that a particular arbitrator, who was not a member of the Ismaili community, be appointed. It was argued that the requirement that the arbitrators came from the Ismaili community, although lawful when the agreement was made, had been rendered unlawful and was void because it contravened the Employment Equality (Religion and Belief) Regulations 2003 ("the Regulations"). At first instance, the judge held that the Regulations did not apply because the arbitrators were not employees and permission to appeal was granted by the Court of Appeal.

Regulation 6 of the Regulations (broadly) makes it unlawful for an employer to discriminate against a person applying for employment. Regulation 7 provides an exception where belonging to a particular religion is a genuine occupational requirement of the job. The Court of Appeal (Moore-Bick LJ giving the leading judgment) held as follows:

Arbitrators are "employees" for the purposes of the Regulations. The Regulations are intended to apply to all forms of employment in the broadest sense, including the provision of services under any form of contract. In most cases, the arbitrator will enter into a contract (even where, as here, the arbitrators do not accept any remuneration for acting); Discrimination is not permitted in respect of private hirings and "the choice of a solicitor, plumber or arbitrator, whether on religious, racial or any other grounds" can fall foul of Regulation 6. Nor are arbitrators "self-employed" for the purpose of Regulation 6, since their working arrangements are controlled, to a greater or lesser extent, by others; A term requiring arbitrators to come from a particular religious background is void. Since the arbitrator was not required to apply any particular ethos of the Ismaili community (the dispute had to be resolved in accordance with English law), there was no genuine occupational requirement that the arbitrator come from the Ismaili community. Accordingly, the term requiring the arbitrator to come from the Ismaili community was void; and Although it was possible to strike out the offending sentence from the arbitration clause and the remaining clause would still be workable, the Court of Appeal agreed with the trial judge that that would render the agreement substantially different from that which had originally been intended. Accordingly, the entire arbitration agreement was void. Injunctions

Abbey Forwarding Ltd v Hone & Ors [2010] EWHC 1532 (Ch)

Varying a freezing order and the meaning of "ordinary course of business"

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