The UK Supreme Court has recently confirmed that arbitration clauses imposing selection criteria for arbitrators are not void.
The UK Position
In its judgment in Jivraj v Hashwani, the court found thatarbitrators are not to be considered “employees” within the meaning ofeither EU or UK anti-discriminatory legislation. The case supports theautonomy and flexibility of arbitration by determining that suchlegislation is not applicable to the selection, engagement orappointment of arbitrators.
The parties had entered into a joint venture agreement which requiredthat any dispute which might arise was to be resolved by threearbitrators, each of whom were to be members of the Ismaili communityand holders of high office within that community. When a dispute arose,one of the parties suggested a particular arbitrator, who did not fulfilthe selection criteria. Arguments then focused on whether thearbitration clause was subject to anti-discriminatory legislation and,if so, whether the clause was void. If void, it would have entitled thechallenging party to litigate the dispute through the courts.
The decision of the UK Supreme Court unanimously overturned theearlier finding of the UK Court of Appeal that arbitrators wereemployees for the purposes of the relevant legislation and that thearbitration clause and any appointment arising from the clause wastherefore discriminatory. Upholding the clause, the Supreme Court foundthat arbitrators are independent providers of services and arbitrationas a process and arbitrators are not subject to the legislation.Therefore imposing such selection criteria was not discriminatory. Byanalogy, other selection criteria, such as experience or qualifications,would equally be unlikely to fall foul of such legislation. Thedecision reinforces the autonomy and flexibility of arbitration as apreferred method of dispute resolution.
The Irish Position
The Irish Arbitration Act 2010 provides that parties are free to determine the method and manner of appointment of arbitrators.
The law does not require arbitrators to have any particular criteriaor qualifications, although parties may agree these. Appointing bodieswill have their own specifications or criteria for their panel appointedarbitrators. The law also requires the courts to have regard to theparties’ wishes regarding the criteria and qualifications ofarbitrators.
The UK Supreme Court’s ruling in this case would therefore appear toecho the current Irish position on the parties’ freedom to appointarbitrators.
Contributed by Cassandra Byrne, Jarleth Heneghan.
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