FAQs about Jewish Arbitration

Contents
Doesn’t the arbitrator have to be a rabbi?
Will civil law be taken into account?
Can I force my opponent to Jewish Arbitration?
Do the Arbitrators have to be expert in both Jewish and Civil law?
Will there be an open and transparent process?
Is this only for the Orthodox Jews?
Why do you have a Preliminary Hearing?
But I can’t claim interest like I can in Court, can I?
You say you issue an “indicative ruling”. What is that?
What about enforcement of Jewish arbitral awards?


Doesn’t the arbitrator have to be a rabbi?

No. There is a halachic rule (Baba Metzia 94a) that all conditions (if structured properly) regarding monetary matters are valid (“b’davar sheb’mamon tena’o kayam”). So whomever the parties accept as an arbitrator, even if not a dayan (Jewish judge) or rabbi, is empowered to issue a binding award upon them.

 

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Will civil law be taken into account (“Dina demalchuta dina”- the law of the land is Jewish law)?

“Dina demalchuta dina” (Baba Kamma 113a) is a quote from the Talmudic sage, Samuel, however what he meant is not so clear. It has been interpreted to mean anything from responsible taxation laws, to anything that any level of government legislates that is for the betterment of society.

We enter into contractual obligations based on Acts of Parliament and common law.

Halacha recognises this. There is the concept of “minhag hamedinah”, which is common business practice in a particular locale.   In our rules, the arbitrator is empowered to consider civil law as part of minhag hamedinah and rule on that accordingly.

The Commercial Arbitration Act 2011 (Victoria) itself contemplates this very situation where there are two conflicting systems of law.  The parties are, by agreement, entitled to cherry pick.

This is also why the Rules in many places replicate the actual words of many sections of the Act.

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Can I force my opponent to Jewish Arbitration?

No. These rules are based on a purely voluntary agreement by two or more parties to have their dispute resolved by arbitration.  There is no coercion, nor can one be forced to use them.  Acceptance of the Rules or changes by consent have to be confirmed prior to the arbitration agreement being signed. The parties by consent can change their minds about anything as the arbitration progresses.  The  coercive features in the Rules only come into play to ensure compliance if one party, usually someone who thinks that they are going to lose, wants to sabotage the process.

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Do the Arbitrators have to be expert in both Jewish and Civil law?

An arbitrator has to have similar qualities to that of a judge who is knowledgeable in procedure, and can interpret and apply relevant laws to a situation. If a party has advisors, then each party can be assisted by a person to present their legal case as strongly as possible, and/or a person to present their halachic case as strongly as possible, with the arbitrators being able to consider all four positions; two parties each having a separate legal and rabbinic adviser if they so desire. In addition, independent expert witnesses can be called to advise on specific legal and halachic grounds.

Likewise, if the parties are representing themselves and the arbitrator feels the need of more legal and halachic assistance, again independent legal and halachic expert witnesses can be called upon.

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Will there be an open and transparent process ?

This is the very reason why the Rules are so long – to spell out common situations so that the parties and their advisers will not be caught by surprise.

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Is this only for the Orthodox Jews?

No. All Jews, not just orthodox, as well as people of other faiths and lifestyles, are equally able to use our services.   The procedures and awards must be in alignment with the civil laws of the land.   There is no coercion to use lawyers or rabbinical advocates. An unrepresented litigant is treated no differently than any other unrepresented litigant in any other court hearing or arbitration.

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Why do you have a Preliminary Hearing?
The Preliminary Hearing is designed for the parties, their advisors and the arbitrator(s) to discuss in detail the arbitration procedure and how halacha impacts on the particular case. This will enable the parties to come to an agreement regarding the feasibility and hence ultimate success of the arbitration. If an agreement cannot be reached at this point it will be clear that a voluntary arbitration at this time is not practical.

Our Standard Arbitration Agreement consists of the important procedural issues to be considered and includes a checklist of many common scenarios for the parties to turn their minds to prior to the Preliminary Hearing.

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But I can’t claim interest like I can in Court, can I?

Not entirely correct. You are right that there is a mitzvah, a Divine  Commandment, not to claim interest (Exodus 22:24). The problem of interest per se can be understood as a socially destructive force. We see this quite clearly on a micro economic level – that is, the effect of high interest rates on people’s ability to repay, leading to adverse social consequence – and on a macro level – the problems facing countries in repaying National Debt. One of the Hebrew words for interest is “neshech”, which also means “bite”. A snake bites by making a small wound in a person’s foot, and the person does not feel it at first. Suddenly it spreads as far as his head. So it is with interest, does not feel it at first and it is not noticeable until the interest accumulates to a large sum of money (Rashi on Exodus 22:24 quoting Midrash Tanchuma ).
However, even in the days of the Talmud, the Rabbis realised that interest can be a vital component of an advanced monetary system. Therefore, in many circumstances, they instituted processes by which interest can be claimed, or the equivalent awarded.

So depending on the case and circumstances, Halacha will countenance interest being claimed and awarded.

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You say you issue an “indicative ruling”. What is that?

Other than going to Court, there is no appeals structure relating to an arbitration award. Part of the philosophy behind the Commercial Arbitration Act 2011 (Victoria) is that the Court should minimally interfere with an award, and instructs a Court to only consider an appeal on a question of law if both parties specifically agree to that (Section 34A).

We also do not believe that it is appropriate for a Court to make a determination on what the Halacha is, even if it was minded to – we have no problem with a Court making a finding on, for example, public policy, which may include natural justice (Section 34).

Other than in Israel or where the parties themselves nominate another body to hear an appeal, there is no formal avenue for a halachic review. As Jewish Law Courts (Batei Din) have been decentralised since Talmudic times, the problem of halachic review has been dealt with and there have been many  ways devised to ensure that a judgement can be reviewed and reconsidered.

The most popular way is that the original Beth Din maintains it ability to reconsider its verdict, if new arguments, usually of a halachic nature, are put to it. That is why many shtarei borerim (arbitration agreements) of Batei Din all over the world explicitly give that power to the original Beth Din.

However this defeats the idea of finality of why the parties go to arbitration in the first place.

Further, from a civil point of view, once an award has been given, the arbitral tribunal is functus officio – “having fulfilled its purpose” – and cannot change the award, except for minor and other consequential matters, spelt out in the Act.

To overcome these problems, we have utilised what we have described as an “indicative ruling” – an award which is not an award.

After hearing all the evidence and arguments, we will issue the indicative ruling which is what we would award and the reasons for that, if the parties have requested reasons, which is usually the case.

Any party can then decide if an appeal on halacha or even civil law could be practically made. They then have the opportunity to make that argument to us. If we agree with that, we will amend the indicative ruling and issue a further indicative ruling, allowing the parties to argue only on the changes.

If we do not agree to the original “appeal” argument, or when the last indicative ruling has been exhausted, we will then issue our award.

Prior to signing the arbitration agreement, at the Preliminary Hearing we will discuss both our Rule 40 dealing with indicative rulings and Section 34A of the Act dealing with appeals to the Court. The parties will have the opportunity to decide whether or not they would like an appeal option.

This is how we aim to preserve transparency, accountability and confidence in our system.

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What about enforcement of Jewish arbitral awards?

Having a qualified Jewish arbitrator as the arbitrator or a member of the arbitral tribunal, the parties can be assured that the elements of the Commercial Arbitration Act 2011 (Victoria) have been considered. Part 8 of the Act – Recognition and Enforcement of Awards – will then apply.

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