On July 27, 2011, the English  Supreme Court clarified that an agreement to refer disputes to international arbitration in England may validly specify required attributes for arbitrators, such as nationality. This decision affirms party autonomy and overturns a previous Court of Appeal judgment that such specification would breach antidiscrimination law.

It is a particular feature of international arbitration that the parties are free to agree on a tribunal in which they have confidence to resolve their disputes, and specifying required attributes for the tribunal may be an important aspect of such party autonomy. For example, a number of institutional rules in international arbitration impose restrictions on the choice of arbitrators on the basis of nationality. Therefore, under Article 6 of the LCIA rules, the sole arbitrator or the chairman of a three-person tribunal shall not be of the same nationality as either of the parties to the dispute. Article 9 of the ICC Rules contains a similar requirement.

The lawfulness of such provisions in English seat arbitrations was called into question by the decision of the Court of Appeal in Jivraj v Hashwani[1], where it was found that English and EU antidiscrimination employment laws applied to the appointment of arbitrators. In response, in recent months, it had become common for English arbitration clauses to disapply “nationality provisions” in institutional rules.

However, the Supreme Court’s reversal of the Court of Appeal’s decision has now clarified that antidiscrimination employment laws do not apply to the appointment of arbitrators because they are not employees.[2]

Lord Clarke, delivering the lead judgment of the Court, specifically acknowledged the importance of freedom of selection of arbitrators and customization of procedure in the international arbitral process: “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.”

The judgment of the Supreme Court affirms the supportive approach of the English courts to international arbitration.

[1] [2010] EWCA Civ 712.

[2] Jivraj v Hashwani [2011] UKSC 40.