THE JERUSALEM INSTITUTE OF JEWISH LAW Rabbi Emanuel Quint, Dean The halachah of arbitration as it appears in Shulhan Aruch Hoshen haMishpat deals almost exclusively with the obligation of the Beth Din to recommend arbitration as a method of settling a lawsuit already commenced. As commerce and industry have grown, so have the number of agreements between parties, or within industries, that contain arbitration clauses.
Most arbitrations are not involved in the judicial process. The parties, either by prior agreement or when a dispute arises, may agree to arbitrate their dispute. They will follow either the arbitration procedure provided for in the arbitration agreement or the procedures described in Hoshen haMishpat, chapter 13, wherein each party selects one of the arbitrators, and the two arbitrators thus selected then select a third arbitrator. (See next week's lesson)
Some of the advantages to arbitration are the speed and the modest fees of the process. Also, if difficult questions arise, the arbitrator can be an expert in the field, whereas judges may not be experts in the particular field involved in the dispute.
Every Beth Din should have a panel of arbitrators available to arbitrate disputes. Such a panel may be part of the Beth Din and may consist of judges or nonjudges, or both.
The judges of the Beth Din are duty bound, and it is a praiseworthy act on their part, to attempt to persuade the litigants to have their lawsuit settled by rules of arbitration rather than by strictly legal principles. The parties may insist that the judge or the judges of the Beth Din before whom the case was to have been tried be the arbitrator or arbitrators.
If either party claims that there is an agreement to arbitrate, the Beth Din must investigate the matter to see if such an agreement exists. If the Beth Din finds that such an agreement does exist then it may issue an order directing the parties to arbitrate as set forth in the agreement or upon such terms as the Beth Din shall determine.
The Beth Din may advocate arbitration at any time during the trial proceedings up until the verdict has been announced. Once the judge or Beth Din has announced its verdict, it may no longer suggest arbitration. However, a third party may suggest arbitration even after the verdict has been announced. Thus by request of the parties, or a suggestion by a third party, a case can be arbitrated if a Beth Din is asked to arbitrate even after the verdict has been announced, since the Beth Din does not lose jurisdiction over the case by announcing its verdict.
The Beth Din may compel arbitration if the necessity for one of the litigants to take an oath exists. This will generally happen when the defendant admits part of the plaintiff's claim. Even after the judges have announced their verdict, they may request that the winning party reduce the amount of the verdict.
The parties are not bound to proceed to arbitration and/or to adhere to the arbitrated decision unless they have bound themselves by a kinyan to do so. The kinyan process is simple. The judge hands his handkerchief to the plaintiff who states that he agrees that the judges arbitrate the dispute and that he will be bound by the decision of the arbitrators. The plaintiff then lifts up the handkerchief (and returns it to the judge). The same procedure is followed by the defendant. When I preside at a din Torah (always an arbitration) I prepare a written stipulation embodying the terms of the agreement to arbitrate, that the parties will be bound by the decision of the arbitrators, that the defendant if he loses the arbitration will pay the amount adjudged by the arbitrators to be due to the plaintiff, that the decision of the arbitrators shall be given effect the same as a decision of the local secular courts, and may be entered by either party in such courts if necessary. The necessity may arise in cases where only the secular courts have jurisdiction, for example the transference of real property. Or where one of the parties refuses to abide by the decision of he arbitrators. The other party may apply to the Beth Din for permission to enter the judgment of the Beth Din in the secular courts. I also include in the stipulation to arbitrate the names of the rabbis who will be part of the panel of arbitrators in this particular arbitration. I also have a clause that the decision of the arbitrators need not be unanimous. If the parties do not so agree, the decision of arbitrators, as distinguished from a din Torah, must be unanimous.
Once the parties have signed the stipulation, I require each party to submit a short statement setting forth his pleas. The plaintiff, in a short statement should set forth his claims and the defendant in a short statement should set forth his defenses to the plaintiff's claims, and any counterclaims he may have against the plaintiff. A counterclaim is a claim that the defendant has against the plaintiff which he could have sued on even if the plaintiff did not sue him. These statements are circulated among the judges prior to the first hearing.
At the first session of the arbitrators, I ask each party to make an opening statement up to half an hour to set forth his position. This sometimes gives the parties a better view of the contentions of the other side. The plaintiff then proceeds to make a full presentation including having witnesses testify on his behalf and to introduce relevant documents. The judges very often ask questions of the person testifying. When the witness or the plaintiff himself has completed his testimony, the defendant or his lawyer (I always encourage the parties to have lawyers with them) questions the plaintiff and/or his witnesses. If the plaintiff has made out a case on which the Beth Din can award a judgment, the defendant gets his chance to present his case, by his own testimony, by testimony of witnesses and by evidence. The judges also question him and the plaintiff or his lawyer may question the defendant. When all this has been completed, (sometimes in one session, very often in several sessions) each side may make a closing statement, usually limited to half an hour.
It is at this stage that I, and the other judges, meet with each party and his lawyer and see if some sort of compromise can be worked out. In this private meeting we point out the weaknesses of that party's case, so that he sees things in proper prospective as the judges see it. Most often a compromise is worked out, and the parties usually are happy to so settle their matter. Very often it takes more than one session to work out a compromise. If the parties cannot agree, they are told that the judges will let them know of the decision, in due time. The judges thereafter meet to discuss the case and most often at the first such session, a decision is arrived at and a written judgment is prepared. But if we feel that the case can still be compromised, another meeting is scheduled with the parties and their attorneys and another attempt is made to settle the matter. In most instances, if the case has not been settled at the last hearing of the trial, it is settled at this latest meeting. Failing to settle the matter, the decision of the Beth Din is sent to the attorneys and if the parties are not represented by attorneys it is sent to the party himself. The parties invariably abide by the decision of the arbitrators.
The subject matter of this lesson is more fully discussed in Vol. 1, Ch. 11, of A Restatement of Rabbinic Civil Law by E. Quint.
Address comments to quint@inter.net.il
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