Hashwani v Jivraj

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Moore-Bick
Judgment Date22 June 2010
Neutral Citation[2010] EWCA Civ 712
Docket NumberCase No: A2/2009/1963

[2010] EWCA Civ 712

[2009] EWHC 1364 (Comm)

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION (COMMERCIAL COURT)

(Mr. Justice David Steel)

Before: Lord Justice Moore-bick

Lord Justice Aikens

and

Sir Richard Buxton

Case No: A2/2009/1963

Between
Nurdin Jivraj
Claimant/Respondent
and
Sadruddin Hashwani
Defendant/Appellant
and Between
Sadruddin Hashwani
Claimant/Appellant
and
Nurdin Jivraj
Defendant/Respondent

Mr. Michael Brindle Q.C. and Mr. Brian Dye (instructed by Zaiwalla & Co) for Mr. Hashwani

Mr. Rhodri Davies Q.C. and Miss Schona Jolly (instructed by Hill Dickinson LLP) for Mr. Jivraj

Hearing dates: 2 nd March 2010

Lord Justice Moore-Bick

Lord Justice Moore-Bick:

1

This is the judgment of the court to which all its members have contributed.

The issue in this case

2

The question that arises in this appeal is whether parties to an arbitration agreement in a commercial contract can stipulate that the tribunal is to be drawn from members of a particular religious group, in this case the Ismaili community. In January 1981 the appellant, Mr. Sadruddin Hashwani, and the respondent, Mr. Nurdin Jivraj, 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 by each party and the third arbitrator to be the President of the H.H. Aga Khan National Council for the United Kingdom for the time being. All arbitrators shall be respected members of the Ismaili community and holders of high office within the community.

(2) The arbitration shall take place in London and the arbitrators’ award shall be final and binding on both parties.”

3

In 1988 the parties decided to terminate their venture. They appointed three members of the Ismaili community as a conciliation panel to assist them in dividing the assets, but certain matters remained unresolved and an attempt to resolve their remaining differences by means of an ad hoc arbitration came to nothing. The matter then fell into abeyance until July 2008 when solicitors acting for Mr. Hashwani wrote to Mr Jivraj putting forward a claim for £1,412,494, together with interest compounded quarterly from 31 May 1994, and notifying him of the appointment of Sir Anthony Colman as arbitrator under Article 8 of the agreement. They called on Mr. Jivraj to appoint an arbitrator within 7 days.

4

Mr. Jivraj's response was to start proceedings in the Commercial Court (2008 Folio 1028) seeking a declaration that the appointment of Sir Anthony was invalid because he is not a member of the Ismaili community. Six weeks later Mr. Hashwani issued an arbitration claim form (2008 Folio 1182) seeking an order that Sir Anthony be appointed sole arbitrator pursuant to section 18(2) of the Arbitration Act 1996. The application was made on the basis that the requirement that the arbitrators be members of 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”). Mr. Hashwani also sought to rely on the Human Rights Act 1998 and public policy in support of his case.

Domestic and EU legislation on discrimination in employment

5

The Regulations provide, so far as is material, as follows:

2.—Interpretation

(3) In these Regulations –

references to “employer”, in their application to a person at any time seeking to employ another, include a person who has no employees at that time;

“employment” means employment under a contract of service or of apprenticeship or a contract personally to do any work, and related expressions shall be construed accordingly;

3.—Discrimination on grounds of religion or belief

(1) For the purposes of these Regulations, a person (“A”) discriminates against another person (“B”) if –

(a) on grounds of religion or belief, A treats B less favourably than he treats or would treat other persons;

6.—Applicants and employees

(1) It is unlawful for an employer, in relation to employment by him at an establishment in Great Britain, to discriminate against a person –

(a) in the arrangements he makes for the purpose of determining to whom he should offer employment; or

(b) in the terms on which he offers that person employment; or

(c) by refusing to offer, or deliberately not offering, him employment.

7.—Exception for genuine occupational requirement

(1) In relation to discrimination falling within regulation 3 (discrimination on grounds of religion or belief) –

(a) regulation 6(1)(a) or (c) does not apply to any employment …

where paragraph … (3) applies.

(3) This paragraph applies where an employer has an ethos based on religion or belief and, having regard to that ethos and to the nature of the employment or the context in which it is carried out—

(a) being of a particular religion or belief is a genuine occupational requirement for the job;

(b) it is proportionate to apply that requirement in the particular case; and

(c) either—

(i) the person to whom that requirement is applied does not meet it, or

(ii) the employer is not satisfied, and in all the circumstances it is reasonable for him not to be satisfied, that that person meets it.”

6

The Regulations were made to give effect to Council Directive 2000/78/EC, which established a general framework for equal treatment in employment and occupation. It was common ground, therefore, that they are to be construed as far as possible in a way that gives effect to the objective of the Directive: see Marleasing S.A. v La Comercial Internationale de Alimentacion S.A. [1990] ECR I-4135. A striking example of the lengths to which the court may go in giving effect to that principle is to be found in Litster v Forth Dry Dock & Engineering Co Ltd [1990] 1 A.C. 54 It was also common ground that, although the arbitration agreement was on any view lawful when it was made, it is now subject to the provisions of the Regulations.

7

It is unnecessary in our view to refer in detail to the recitals to the Directive, save to note that in them its objects are expressed in very wide terms which suggest that its purpose is to prohibit discrimination wherever it exists in relation to employment and occupation and in whatever form. The provisions of most relevance to the present appeal are to be found Articles 1 to 3, the material parts of which provide as follows:

“Article 1

Purpose

The purpose of this Directive is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment.

Article 2

Concept of discrimination

1. For the purposes of this Directive, the ‘principle of equal treatment’ shall mean that there shall be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1.

Article 3

Scope

1. Within the limits of the areas of competence conferred on the Community, this Directive shall apply to all persons, as regards both the public and private sectors, including public bodies, in relation to:

(a) conditions for access to employment, to self-employment or to occupation, including selection criteria and recruitment conditions, whatever the branch of activity and at all levels of the professional hierarchy, including promotion;

(b) access to all types and to all levels of vocational guidance, vocational training, advanced vocational training and retraining, including practical work experience;

(c) employment and working conditions, including dismissals and pay;

(d) membership of, and involvement in, an organisation of workers or employers, or any organisation whose members carry on a particular profession, including the benefits provided for by such organisations.”

8

The Directive is concerned with discrimination on the grounds of religion or belief, disability, age or sexual orientation. It is therefore much wider in its scope than the Regulations, which are concerned only with discrimination on the grounds of religion or belief. The explanation lies in the fact that the United Kingdom had already introduced legislation dealing with discrimination on most of the other grounds covered by the Directive in connection with employment and occupation. Discrimination on the grounds of sex and sexual orientation was rendered unlawful by the Sex Discrimination Act 1975, discrimination on the grounds of race by the Race Relations Acts 1968 and 1976 and discrimination on the grounds of disability by the Disability Discrimination Act 1995. Legislation dealing with discrimination on the grounds of age and religion or belief was still required to ensure compliance with the Directive. The Regulations deal with discrimination on the grounds of religion or belief and discrimination on the grounds of age is now covered by the Employment Equality (Age) Regulations 2006.

9

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