Arbitration: Can You Choose Your Arbitrator Or Not? Jivaraj v Hashwani [2010] EWCA Civ 712 Court Of Appeal

A central reason for opting to determine a dispute by Arbitration is the parties freedom to determine their arbitrator(s). Indeed according to Redfern & Hunter's leading text book, Law and Practice of International Commercial Arbitration,1 the ability to choose the neutral is the 'first' reason why parties choose to arbitrate over using national courts of law. Additionally the UK Arbitration Act 1996 makes clear that parties are free to determine the number of arbitrators on a tribunal and to choose whom they please.2 It is therefore a great surprise to many in the arbitration community that the English Court of Appeal have given judgment in Jivaraj v Hashwani restricting the right of choice over their arbitrator. This article will look at the case and the reasoning for restricting a party's right to choose their neutral.

The Appeal

The Jivaraj case arose from a dispute concerning the arbitration agreement to choose an arbitrator from a specific religious community, in this case the Ismaili community. Importantly it was common ground that, although the arbitration agreement was lawful when it was made, it is now subject to the provisions of the European Employment Equality (Religion and Belief) Regulations 2003, and this raised a question of whether the clause relating to the religious background of an arbitrator was permissible under the new law. The form of the Regulations follows closely that of the earlier legislation, in particular in defining 'employment' as including a contract personally to do work of any kind, and this was the way in which it was suggested that arbitrators were 'employed.'

The Background

In January 1981 the appellant, Mr. Nurdin Jivraj, and the respondent, Mr. Sadruddin Hashwani, entered into a joint venture agreement for investment in real estate in various parts of the world, initially Canada and subsequently elsewhere. Article 8 of the contract provided, so far as material, as follows:

'(1) If any dispute difference or question shall at any time hereafter arise between the investors with respect to the construction of this agreement or concerning anything herein contained or arising out of this agreement or as to the rights liabilities or duties of the investors or either of them or arising out of (without limitation) any of the businesses or activities of the joint venture herein agreed the same (subject to sub-clause 8(5) below) shall be referred to three arbitrators (acting by a majority) one to be appointed...