Arbitrators are not bound by equality laws, Supreme Court rules

In a keenly awaited judgment, the Supreme Court reaffirmed London as the arbitration capital of the world, overturning a Court of Appeal ruling that would have seen arbitrators fall within the scope of the regulations.

The original case focused on a £1.5m dispute over a joint venture agreement for investment in real estate projects worldwide.

An arbitration agreement between the parties stipulated that arbitrators overseeing any dispute between them were to be “respected members of the Ismaili community and holders of high office within the community”. Ismailism is a branch of the Shia denomination of Islam.

When Sadruddin Hashwani launched his claim against former business partner Nurdin Jivraj, he applied to the Commercial Court to have Sir Anthony Colman appointed as an arbitrator. Zaiwalla & Co name partner Sarosh Zaiwalla instructed Fountain Court Chambers’ Michael Brindle QC for Hashwani.

In response, Jivraj applied to the Commercial Court for a declaration that the appointment was invalid as Colman was not a member of the Ismaili community.

The case attracted such controversy that it snowballed and attracted a trio of intervenors: the London Court of International Arbitration; the International Chambers of Commerce; and His Highness Prince Aga Khan Shia Ismami Ismaili, International Conciliation and Arbitration Board.

The court ruled that in this instance it was justified for the arbitration to be heard before three Ismailis.

Delivering the substantive judgment Supreme Court justice Lord Clarke stated: “The question is whether, in all the circumstances, the provision that all the arbitrators should be respected members of the Ismaili community was legitimate and justified. In my opinion it was. The approach of the Court of Appeal seems to me to be too legalistic and technical.”

The legal line up:

Hill Dickinson partner Jonathan Berkson instructed One Essex Court’s Rhodri Davis QC to lead Schona Jolly of Cloisters for Jivraj.

Zaiwalla & Co name partner Sarosh Zaiwalla instructed Fountain Court Chambers’ Michael Brindle QC to lead Essex Court Chambers’ Brian Dye for Hashwani.

Interveners:

Linklaters partner Christopher Style QC instructed One Essex Court’s Laurence Rabinowitz QC to lead Blackstone Chambers’ Christopher McCrudden for the London Court of International Arbitration.

Allen & Overy partner Richard Smith instructed Matrix Chambers’ Thomas Linden QC, Essex Court Chambers’ Toby Landau QC, Paul Key and David Craig also of Essex Court Chambers for the International Chamber of Commerce.

Clifford Chance instructed Matrix Chambers’ Rabinder Singh QC and Aileen McColgan also of Matrix Chambers for His Highness Prince Aga Khan Shia Imami Ismaili, International Conciliation and Arbitration Board.