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In these circumstances paragraph 2 must be the source of paragraph (3) of the regulation, with the result that the expression genuine occupational requirement must (either alone or together with proportionality in requirement (3)) have been intended to reflect the expression genuine, legitimate and justified occupation... |
If the legitimacy or justification of a requirement were assessed purely by reference to the subjective view of the employer, they would add nothing to the stipulation that a requirement be genuine. Ratio |
In my view, whether or not a particular religion or belief is a legitimate and justified requirement of an occupation is an objective question for the court. Ratio |
This is not however as strict a test as that applied under regulation 7(2), namely that a particular religion or belief is an essential requirement for the job. Ratio |
As I see it, the question is simply whether in all the circumstances of the case the requirement that the arbitrators should be respected members of the Ismaili community was, not only genuine, but legitimate and justified. Ratio |
I do not agree with Mr Brindle that the requirement that arbitrators be Ismailis cannot be objectively justified. Ratio |
His submission that an English law dispute in London under English curial law does not require an Ismaili arbitrator takes a very narrow view of the function of arbitration proceedings. Ratio |
This characterisation reduces arbitration to no more than the application of a given national law to a dispute. Ratio |
One of the distinguishing features of arbitration that sets it apart from proceedings in national courts is the breadth of discretion left to the parties and the arbitrator to structure the process for resolution of the dispute. Ratio |
This is reflected in section 1 of the 1996 Act which provides that: the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest. Ratio |
The stipulation that an arbitrator be of a particular religion or belief can be relevant to this aspect of arbitration. Ratio |
As the ICC puts in its written argument: The raison dtre of arbitration is that it provides for final and binding dispute resolution by a tribunal with a procedure that is acceptable to all parties, in circumstances where other fora (in particular national courts) are deemed inappropriate (eg because neither party will... |
Under section 34 of the 1996 Act (referred to above) the arbitrators have complete power over all procedural and evidential matters, including how far the proceedings should be oral or in writing, whether or not to apply the strict rules of evidence, whether the proceedings should be wholly or partly adversarial or whe... |
They are the sole judges of the evidence, including the assessment of the probabilities and resolving issues of credibility. Ratio |
In paras 41 to 44 of his judgment [2010] 1 All ER 302 the judge made detailed findings which seem to me to be relevant to this question. Ratio |
I refer to only some of them. Ratio |
In para 41 he described the history and development of the Ismaili Community. Ratio |
He noted from the summary on the website of the Aga Khan Development Network that in the early part of the 20th century Aga Khan III introduced a range of organisational forms that gave Ismaili communities the means to structure and regulate their own affairs. Ratio |
He added that those forms were established against the background of "the Muslim tradition of a communitarian ethic on the one hand, and responsible individual conscience with freedom to negotiate one's own moral commitment and destiny on the other". Ratio |
At para 42 the judge quoted extensively from the same summary which included this: Spiritual allegiance to the Imam and adherence to the Shia Imami Ismaili tariqah (persuasion) of Islam according to the guidance of the Imam of the time, have engendered in the Ismaili community an ethos of self-reliance, unity, and a co... |
He noted that in 1986 the present Aga Khan: promulgated a Constitution that, for the first time, brought the social governance of the world-wide Ismaili community into a single structure with built-in flexibility to account for diverse circumstances of different regions. Ratio |
Served by volunteers appointed by and accountable to the Imam, the Constitution functions as an enabler to harness the best in individual creativity in an ethos of group responsibility to promote the common well-being. Ratio |
Like its predecessors, the present constitution is founded on each Ismaili's spiritual allegiance to the Imam of the time, which is separate from the secular allegiance that all Ismailis owe as citizens to their national entities. Ratio |
The guidance of the present Imam and his predecessor emphasised the Ismaili's allegiance to his or her country as a fundamental obligation. Ratio |
These obligations discharged not by passive affirmation but through responsible engagement and active commitment to uphold national integrity and contribute to peaceful development. Ratio |
In para 43 the judge quoted from a paper presented to the Council of Europe in March 2009 by the Director of International Training with the secretariat of the Aga Khan which included the following: Under the Constitution, the Imam has also established National and International Conciliation and Arbitration Boards to e... |
In fulfilling the mandate to sustain social, economic, cultural and civil society development, the Imamat collaborates with national governments, regional and international institutions as well as civil society organisations. Ratio |
This paper highlights the work of the Conciliation and Arbitration Boards established under the Ismaili Constitution and more particularly the training programmes that have been conducted for them over the last decade, indicating some of the best practices. Ratio |
Over the centuries, Ismaili communities in various parts of the world, have been conducting their own ADR processes based on the ethics of the faith as guided by the Imams of the Time. Ratio |
[The Aga Khan] was concerned about the massive costs of litigation faced by members of the Ismaili community in various parts of the world. Ratio |
Not only were the legal costs very high, but the legal procedures, in many countries, were particularly lengthy and did not always result in outcomes that conformed with the principles of natural justice. Ratio |
The Aga Khan was concerned about compliance with the ethics of the faith which promote a non-adversarial approach to dispute resolution in keeping with the principles of negotiated settlement (sulh) enshrined in the Holy Qur'an. Ratio |
The study indicated that a majority of the cases were in the field of family disputes and that the national courts in the countries, where the disputants were settled, were not always able to comprehend the inter-generational attitudinal issues involved, let alone being able to resolve them. Ratio |
This syndrome is very much in keeping with the notion of the "limited remedial imagination" that Menkel-Meadow attributes to the adversarial system which focuses on a zero-sum numbers game where the "winner takes all". Ratio |
It was therefore decided by the Imam, in consultation with the leaders of the various Ismaili communities worldwide, to build on the community's existing tradition of settling disputes amicably within the ethics of Islam and to establish Conciliation and Arbitration Boards at various levels of social governance in the ... |
It was also felt that the system should be such that the first submission of an issue to an arbitrational or mediational body should ensure the highest degree of proficiency, probity and fairness so that the number of cases which go for appeal would be minimal and that the process would be seen as being equitable, fair... |
The Aga Khan's advice was that such a system should endeavour to resolve disputes within the community without the disputants having to resort to unnecessary litigation which is time consuming, expensive and destructive. Ratio |
The Aga Khan saw the amicable resolution of disputes, without resorting to a court of law and within the ethics of the faith, as an important aspect of the improvement of the quality of life of the Ismailis globally. Ratio |
Consequently, the Ismaili Constitution of 1986 made provision for the establishment of the Conciliation and Arbitration Boards. Ratio |
The judge then in para 44 set out part of article XIII of the Constitution which set up a National Conciliation and Arbitration Board for all types of dispute, which provided by article 13.5: Each National Conciliation and Arbitration Board shall upon the application of any Ismaili assist him to settle any differences ... |
Article 13.1(a) provided that the Board was: to assist in the conciliation process between parties in differences or disputes arising from commercial, business and other civil liability matters, domestic and family matters, including those relating to matrimony, children of a marriage, matrimonial property, and testate... |
In these circumstances the judge held that the provision in the JVA which provided that the arbitrators should be respected members of the Ismaili community and holders of high office within the community was a GOR within regulation 7(3). Ratio |
He did so on the basis that the material set out above showed that, as he put it at para 45, one of the more significant and characteristic spirits of the Ismaili sect was an enthusiasm for dispute resolution contained within the Ismaili community. Ratio |
He said that he had no difficulty in determining this spirit to be an "ethos based on religion". Ratio |
He also relied upon the terms of the arbitration clause itself and the engagement by both sides of members of the Ismaili community to perform mediation and conciliation services from 1988 until 1994. Ratio |
In my opinion the judge was justified in concluding that the requirement of an Ismaili arbitrator can be regarded as a genuine occupational requirement on the basis that it was not only genuine but both legitimate and justified, so that requirement (2) was satisfied. Ratio |
As to requirement (3), the judge said at para 46 that, had proportionality been a live issue, having regard to the parties freedom in section 1 of the 1996 Act (quoted above) he would have held that article 8 of the JVA was proportionate. Ratio |
The reasoning of the Court of Appeal [2010] ICR 1435 is set out in their para 29 as follows: The judge's findings about the nature and ethos of the Ismaili community were not challenged, but in our view he failed to pay sufficient regard to the other requirements of regulation 7(3), in particular, to whether, having re... |
If the arbitration clause had empowered the tribunal to act ex aequo et bono it might have been possible to show that only an Ismaili could be expected to apply the moral principles and understanding of justice and fairness that are generally recognised within that community as applicable between its members, but the a... |
That requires some knowledge of the law itself, including the provisions of the Arbitration Act 1996, and an ability to conduct the proceedings fairly in accordance with the rules of natural justice, but it does not call for any particular ethos. Ratio |
Membership of the Ismaili community is clearly not necessary for the discharge of the arbitrator's functions under an agreement of this kind and we are unable to accept, therefore, that the exception provided in regulation 7 of the 2003 Regulations can be invoked in this case. Ratio |
I prefer the approach of the judge. Ratio |
For the reasons given earlier, I am not persuaded that the test is one of necessity. Ratio |
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. Ratio |
In my opinion it was. Ratio |
The approach of the Court of Appeal seems to me to be too legalistic and technical. Ratio |
The parties could properly regard arbitration before three Ismailis as likely to involve a procedure in which the parties could have confidence and as likely to lead to conclusions of fact in which they could have particular confidence. Ratio |
For these reasons I would, if necessary, have allowed the appeal on the basis that article 8 was a GOR within regulation 7(3). Ratio |
This conclusion makes it unnecessary to consider whether it also satisfied regulation 7(2). Ratio |
Severance and costs Ratio |
In these circumstances, neither the severance issue raised by Mr Hashwani nor the appeal on costs advanced by Mr Jivraj arises and I say nothing about them. Ratio |
Reference to the Court of Justice Ratio |
I would not refer any of the questions which arise in this appeal to the Court of Justice. Ratio |
On the first question, the only questions of EC law which arise relate to the true construction of the Directive. Ratio |
The Court of Justice has resolved those issues in a number of cases, notably Allonby [2004] ICR 1328. Ratio |
To my mind the principles are now acte clair. Ratio |
On the second question, the principal issue between the parties relates to the application of the relevant principles to the facts. Ratio |
As to the correct construction of regulation 7(3), I have accepted Mr Brindles submission that it does not involve a wholly subjective question on the ground that the relevant provision must be not only genuine, but also legitimate and justifiable. Ratio |
In these circumstances, I see no basis for a reference in relation to GOR, which was in any event not determinative of the appeal. Ratio |
CONCLUSION RPC |
I would allow the appeal. RPC |
The first point Ratio |
I have read and agree entirely with the judgment of Lord Clarke on the first point: that is, whether the arbitrators contemplated by article 8 of the Joint Venture Agreement are persons who would be engaged in employment under a contract personally to do work within the meaning of regulation 2 of the Employment Equalit... |
The conclusion that they would not be is, I think, unsurprising for all the reasons that Lord Clarke gives. Ratio |
I note that as long ago as 1904 (RGZ 59, 247), the German Reichsgericht identified the particular nature of an arbitral contract, in terms which I think have a relevance to arbitration generally, when it said (in translation), that: It does not seem permissible to treat the arbitrator as equivalent to a representative ... |
His office has . Ratio |
an entirely special character, which distinguishes him from other persons handling the affairs of third parties. Ratio |
He has to decide a legal dispute in the same way as and instead of a judge, identifying the law by matching the relevant facts to the relevant legal provisions. Ratio |
The performance expected from him is the award, which constitutes the goal and outcome of his activity. Ratio |
It is true that the extent of his powers depends on the arbitration agreement, which can to a greater or lesser extent prescribe the way to that goal for him. Ratio |
But, apart from this restriction, his position is entirely free, freer than that of an ordinary judge. Ratio |
A more modern source, Gary B Borns authoritative work on International Commercial Arbitration (2009), convincingly discusses the general international legal understanding of the nature of an arbitrators engagement in the following passage (Vol I, pp 1607-1609): There is also debate about how to characterize the arbitra... |
Some commentators consider the arbitrators contract to be an agency agreement, where the arbitrator serves as the parties agent. Ratio |
Other authorities have suggested treating the arbitrators contract as an agreement for the provision of services. Ratio |
A third approach has been to regard the arbitrators contract as a sui generis or hybrid form of agreement, not being categorizable in conventional terms and instead giving rise to a unique set of right and duties. Ratio |
The proper analysis is to treat the arbitrators contract as a sui generis agreement. Ratio |
That is in part because this characterization accords with the specialized and distinct nature of the arbitrators mandate: as noted above, that mandate differs in fundamental ways from the provision of many other services and consists in the performance of a relatively sui generis adjudicatory function. Ratio |
It is therefore appropriate, and in fact necessary, that the arbitrators contract be regarded as sui generis. Ratio |
At the same time, there are no other satisfactory characterizations of an arbitrators contract. Ratio |
It makes no sense to treat the arbitrators contract as an agency agreement. Ratio |
Under most legal systems, that characterization would require the arbitrator to follow the parties directions and to provide the parties with information and an accounting all of which can only with difficulty, if at all, be assimilated to the adjudicative role of an arbitrator. Ratio |
Moreover, the role of an agent is inconsistent with the arbitrators adjudicative function which is precisely to be independent of the parties. Ratio |
This was underscored by a French appellate decision, which held that an agreement for the parties representatives to resolve their dispute could not be an arbitration agreement: A stipulation of that kind is incompatible with the actual concept of arbitration, since the arbitrators, though appointed by the parties, can... |
That would imply, in particular, that they represent the parties and account for their functions. Ratio |
Such a role, and the obligations it entails, are alien to the functions of an arbitrator, which are judicial in nature. Ratio |
Equally, regarding the arbitrator as a service provider, like an accountant, investment banker, lawyer, or other professional, ignores the essential adjudicative character of his or her mandate. Ratio |
Arbitrators do not merely provide the parties with a service, but also serve a public, adjudicatory function that cannot be entirely equated with the provision of service in a commercial relationship. Ratio |
The proper analysis is therefore to regard the arbitrators contract as a sui generis agreement specifying the terms on which this adjudicative function is to be exercised vis--vis particular parties and on particular terms. Ratio |
Both these citations catch and support the essence of Lord Clarkes distinction between persons under the direction of another and arbitrators who perform an independent role, free of such control. Ratio |
The second point Ratio |
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