What is arbitration? In one of the previous columns, I dealt with the issue of arbitration in general. In this article, I will seek to address matters that are worth considering before the parties sign an arbitration agreement in any matter they are disputing.
Arbitration is an alternative process for clarifying rights between parties, and serves as an alternative to a lawsuit in court or tribunal. In this process, the parties agree on the identity of an objective third person who will serve as their arbitrator. In the religious private property courts, it is customary for three arbitrators to sit during the hearing.
The arbitrator has the authority to discuss, decide and rule, starting from the moment the parties sign their agreement that he will serve as arbitrator. The parties sign a document called an 'arbitration bill', in which the parties explicitly determine and define the scope of the arbitrator's authority.
The judgment and decisions rendered by the arbitrator after hearing the parties' arguments and evidence are not void of content. This judgment will be enforceable like any ruling issued by any other judicial instance - a tribunal or court, and the validity of this procedure and the judgments are valid under any law.
The advantages of arbitration
In one of the previous columns, I listed the advantages and disadvantages of the arbitration process. As I mentioned, the arbitration process has several advantages, the most significant of which is the mutual agreement of the parties on the identity of the arbitrator. This advantage gives the hearing process flexibility and convenience for the parties. In addition, initiating a legal claim in the various courts requires bureaucracy, payment of file opening fees, judicial and hearing time, which sometimes takes many months or even years, the burden of legal expenses on the unsuccessful party, and sometimes the parties' verdict may be published on legal websites.
Unlike in an arbitration process, where hearings are held on a rapid schedule, opening a lawsuit does not involve expensive fee payments, and as far as litigation in private courts of law is concerned, the arbitrators do not charge a fee for the litigation, as the litigation is confidential, and the issue of awarding legal costs to the unsuccessful party can also be stipulated and agreed upon between the parties.
It can therefore be concluded that, in general, the arbitration process has significant advantages, while at the same time there is importance on the identity of the arbitrator, his honesty and fairness, and on the precise wording of the arbitration agreement in all its sections, which I will detail below.
Provision for charging legal costs in the arbitration agreement
As is known, in private property law courts, it is not customary to charge the losing party with legal costs and attorney fees of the winning party, unless it turns out that the claim was a 'vicious claim' intended primarily to cause damage and legal confusion to the defendant, in which case the court may sometimes charge legal costs.
However, to the extent that the parties wish to stipulate between themselves that the losing party in the case will be liable for the winning party's legal expenses, they must expressly stipulate this in the arbitration agreement, and then it will be binding.
Right to appeal the arbitration
As a general rule, there is no right of appeal against judgments rendered in arbitration. These judgments can only be annulled by filing a motion to quash the arbitration, and it is important to note that a claim to annul an arbitrator's judgment will in most cases not be approved in court, and will even cause the party filing the claim heavy legal expenses, as the trend in the courts is to confirm judgments issued by arbitration institutions, and the reason for this is apparently due to the existing burden on the courts.
However, in 2008, an amendment was added to the Arbitration Law that the parties to the arbitration process may agree and stipulate between themselves that each of them will have the right to appeal to another arbitrator, but it is important that this be explicitly stated in the arbitration agreement.
It is important to note that within the framework of Torah law in the courts, the arbitration agreement is usually worded so that the parties will not have the right to appeal.
Therefore, to the extent that the parties, or one of them, desires that after the ruling is rendered, he will have the right to appeal to a judge or another agreed arbitrator, he must expressly stipulate this in the arbitration agreement.
The hearing regulations of the rabbinical courts [Regulation 117] state the following in a different way: "Waiver of the right to appeal - a judgment given on the basis of an arbitration deed is not appealable if it is stated in the arbitration deed that both parties waive the right to appeal or if the parties have declared before the court that they waive the right to appeal. If one party has declared, as aforesaid, it may not appeal unless the opposing party has appealed.""
But as stated, when the parties come to litigate in the context of arbitration in the property courts, to the extent that the parties wish to retain the right to appeal, they must expressly stipulate this in the arbitration agreement.
The arbitrator's duty to justify the award
It is important to note that within the framework of Torah law in the courts, the arbitration agreement is usually worded so that the court will not have the obligation to provide reasons for the ruling.
Therefore, to the extent that the parties, or one of them, desires that the award be reasoned, they must expressly stipulate this in the arbitration agreement.
Therefore, litigants who submit their case to an arbitrator in the framework of a sole arbitrator or in the framework of a 'Din Torah' in a court of law, if they wish, can explicitly state in the arbitration agreement that the arbitrators will have the duty to provide reasons for their rulings, emphasizing that this duty to provide reasons will apply to both the final ruling and any interim decisions that may be rendered, thereby undoubtedly removing any concern about a lack of objectivity on the part of the arbitrator.
The conclusion, therefore, is that the arbitration process has significant advantages, and it is important to pay attention to stipulating the things that are important to the parties in precise wording in the arbitration agreement.
The author of the article – Rafael Ohana, a rabbinical lawyer in family law and property law
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