Arbitration

 

 

 

 

 

 

COHN J. The learned  judge  in  the  District  Court  established  as  a fact that "It was the intention  of  the  parties  that, instead  of  bringing the matter to the attention of the authorities, proceedings should tak'e place before arbitrators", and further that "the true intention in making the arbitration agreement was to settle the m tter in a form  that  would not involve proceedings before a criminal court." In my opinion there was abundant evidence before the court on which it could make such findings, and this  court  should  not  interfere  with  findings  of  fact  of a court of first  instance.  For  myself  I  accept  Mr.  Sharfs  argument that the learned judge erred in the conclusion of law  which  he drew from these  facts  in  holding  that  there  was  here  no  offence  under sec. 129 of the Criminal Code Ordinance. 1936. I myself have no doubt that in view of the findings of fact of the learned judge there is no escaping the conclusion that, at least prima  facie,  an  offence  under  sec.  129 was proved. This section does not speak, as English  law  apparently does, of the stifling of the prosecution. This section is satisfied if the compounding is expressed by the grant of any benefit whatever, or  by the concealment of a crime from the authorities, or even by delay in prosecuting the charge or withholding evidence in connection there­ herewith.

If there was no actual compounding here-and I express no opinion as to whether there was such or not-Mr. Sharf is right in his argument that there was at least some delay and since the parties intende5i, as indicated, that the arbitration between  them  should  take  the  place of a criminal action, the conditions set out in sec. 129 have been met.

Nevertheless, I agree with my learned colleagues that this appeal should be dismissed. My reason is that this appellant does  not  come with clean hands any more than the respondents  who  under sec.  129  are the principal offenders. Not only did the appellant a'ssist, by counsel and deed, in submitting the relevant matter to arbitration and  con­ cealing it from the criminal court but, according to the evidence which reached the court, it was he who initiated the  whole  matter,  even  if only for the purpose of avoiding publicity; and he cannot now  be heard in argument as ifhe were not the prime mover.

 

Appeal dismissed. Judgment given on November 7, 1960.

The Supreme Court sitting as the High Court of Justice

 

HCJ 3856/11

 

Before:                                                The Honorable Deputy President M. Naor                                                                 The Honorable Justice E. Arbel                                                                                  The Honorable Justice N. Solberg

 

The Petitioner:                        Anonymous

 

v e r s u s

 

The Respondents:                   1.       The Supreme Sharia Court of Appeals

                                                      2.       The Sharia Court in Tayibe

                                                      3.       Anonymous

 

The Parties Requesting

to Join as amici curiae:           1.       "Kayan" – Feminist Organization

                   2.       The Concord Research Center for Integration of International Law in Israel

                                                                                   

Petition to Grant an Order Nisi

 

Date of Session:                                           13^th of Kislev, 5773 (November 27, 2012)

 

On behalf of the Petitioner:                Adv. V. Herzberg, Adv. T Mudlij

 

On behalf of Respondents 1-2:           Adv. A. Avzek

 

On behalf of Respondent 3:                Adv. A. Natur

 

On behalf of Party 1 requesting

to join as amicus curiae:                      Adv. S. Batshon

 

On behalf of Party 2 requesting

to join as amicus curiae:                      Adv. F. Raday

 

On behalf of the Attorney General:    Adv. D. Bricksman

 

 

J U D G M E N T

 

 

Justice E. Arbel:

 

Before us is a petition against the decision of the Sharia Court of Appeals ruling it is impossible to appoint a female arbitrator in a divorce proceeding before the court.

 

 

 

 

Background and Review of the Proceedings

 

1.The Petitioner and Respondent 3 (hereinafter: the “Respondent”) are Muslim Israeli citizens who are married to each other. A dispute erupted between the two, which led to various proceedings held in civil courts, including motions for protective orders, alimony actions and more. At the same time, on April 23, 2009, the Respondent filed an “Arbitration Claim” with the Sharia Court in Tayibe. There, the Petitioner claimed that the claim was filed in bad faith since the Respondent intended to divorce. Despite this, the court accepted the Respondent’s petition and on November 1, 2010, instructed that each party appoint an arbitrator on its behalf pursuant to Sections 130 and 131 of the Ottoman Family Law (hereinafter: the “Family Law”). On January 17, 2011, the Petitioner filed a notice to the Sharia court regarding the appointment of Hajjah Rudina Amsha from Tayibe as the arbitrator on her behalf.

 

2.On January 18, 2011, the Sharia Court ruled that: “This court sees that the religious scholars stipulated that the arbitrators must be men, according to the Maliki, Hanbali and Shafi schools of thought…”. Later the court required the Petitioner to appoint a male arbitrator. The Petitioner appealed this decision to the Sharia Court of Appeals. On April 5, 2011, the court denied the appeal. It was ruled that Section 130 of the Family Law, which is the binding law in Sharia courts in Israel, is based on the Maliki interpretation. Since the Maliki required that arbitrators be men, it is impossible to appoint women as arbitrators. Following the judgment, the Sharia Court in Tayibe decided again that the Petitioner must appoint an arbitrator on her behalf within a week. After the Petitioner did not appoint an arbitrator on her behalf, the court appointed two male arbitrators on its behalf on May 11, 2011. At the same time, this petition was filed. Notably, on June 2, 2011, this Court (Honorable Justice Meltzer) granted the Petitioner an interim order prohibiting the arbitrators appointed by the Sharia court from issuing any decisions in the entire matter handed over to their care, until another decision in the petition.

 

3.Following a hearing we held on July 13, 2011, we decided to issue an order nisi, and to have the Attorney General file its position on the matter. After receiving the positions of the parties, we held an additional hearing on May 7, 2012, in which we decided that the Sharia Court of Appeals should give a detailed and reasoned decision on the parties’ arguments, and particularly regarding the applicability of the Equal Rights for Women Act, 5711-1951 (hereinafter: the “Equal Rights for Women Act” or the “Act”). Such judgment was indeed handed down and provided to this Court on August 9, 2012, whose main points we shall address immediately. On November 27, 2012, we held a final hearing in the petition and heard the parties’ arguments. In order to complete the picture, it shall be noted that two organizations filed motions to join the petition as amici curiae“Kayan”–Feminist Organization (hereinafter: the “Kayan Organization”), and the second is the Concord Research Center for Integration of International Law in Israel (hereinafter: the “Concord Center”). Following these proceedings, it is now time to deliver our decision in the petition.

 

 

 

The Sharia Court of Appeals’ Judgment

 

4.As mentioned, following our decision, a reasoned judgment in the matter was given by the Sharia Court of Appeals on June 18, 2012. The Court stated that first the question of which school of thought was chosen by the Ottoman legislator when legislating Section 130 of the law, which binds the Sharia courts in Israel, must be addressed. The Court clarified that according to the Maliki school of thought, the arbitrators serve as a kind of Qadi, and not as representatives of the parties. Their authority is to reconcile the couple or divorce them from each other even without the couple’s consent. In contrast, according to the Hanafi, Shafi and Hanbali schools of thought, the arbitrators’ authority ends with delivering a report to the Qadi who is the one who performs the divorce according to the arbitrators’ report, and the arbitrators do not have authority to perform the divorce unless they have been permitted to do so. The Court further ruled that in Section 130 of the law, the Ottoman legislator relied on the Maliki's opinion, as the language of the section authorizes the arbitrators to dissolve the marriage and provides that the arbitrators’ judgment will be final. The court also relied on the explanatory notes to the Family Law that explicitly referred to the Maliki school of thought.

 

5.The Court stated that the Sharia courts indeed operate pursuant to this principle when implementing Section 130 of the Family Law, and it has been ruled that the act of the panel of arbitrators is a judicial act that creates a judgment similar to the act of a Qadi. The Qadi's only role is to confirm whether the arbitrators’ report is consistent with the law, and if not, to void it. It has been ruled that the Qadi may intervene in the scope of the dowry (mahr) given to the women if he found that the arbitrators unjustifiably reduced it, however this is only the case for a monetary matter and where the court has tools to intervene, in the absence of a Sharia reason for the reduction. It has been ruled that the purpose of the intervention is to prevent the prolonging of the litigation between the parties. In contrast, the court cannot intervene in other matters of the arbitrators’ report since the arbitrators are the ones who heard the couple’s arguments based upon which they reached their conclusions. In summary, the Sharia Court of Appeals rules that “the arbitrators, pursuant to Section 130 of the law, are Qadis and not representatives, and they are the ones who rule regarding the dissolution of a marriage, and the Qadi’s authority is to confirm their ruling.”

 

6.The Court stated that the law does not clarify the terms and characteristics required of the arbitrator, and therefore, it is necessary to turn to the customary opinion in the Maliki school of thought to clarify such terms. According to this school of thought, the arbitrators must be men. The court clarifies that the religious scholars that viewed arbitrators as representatives permitted women to be arbitrators, while the religious scholars that viewed arbitrators as Qadis did not permit women to be arbitrators. The Court further noted that according to the Hanafi school of thought a woman can also be a Qadi.

 

7.As for the Equal Rights for Women Act, the court rules that both of the Act’s exceptions apply: the exception regarding laws permitting or prohibiting marriage and the exception regarding appointing a person to a religious position. The Court emphasized that the arbitrators’ judgment has Sharia implications that stem from the dissolution judgment, which is final and binding, and therefore the Equal Rights for Women Act should not be applied to the appointment of arbitrators. The Court rejected the argument that the Family Law is a civil law and ruled that this law is the codification of Sharia laws that includes laws regarding marriage and divorce that were taken from various schools of thought. The Court also stated that at hand is a religious lex specialis that prevails over the provisions of the Mejelle which is legi generali. The Court cautioned that adopting a different school of thought would harm women, since according to other schools of thought the arbitrator cannot perform a divorce without the husband’s consent, while the Maliki school of thought is the only one that applies a cause of action for dissolving a marriage without the husband’s consent.

 

The Petitioner’s Arguments

 

8.The Petitioner’s attorney claims that Section 130 of the Family Law does not prohibit the appointment of a female arbitrator. According to him, we are concerned with a statue of a civil governing body within the codification process and reforms made during the Ottoman Empire. The Family Law was intended to introduce some into the existing rules and also to reform the legislation while adopting and integrating opinions from various schools of thought and creating a single body of binding legislation. It follows, as argued, that the law is to be interpreted similarly to other civil laws, rather than according to interpretations that were customary among the religious scholars in the period preceding the law’s legislation. It is further argued that the Ottoman legislature did not adopt the Maliki interpretation across the board and allowed itself to prescribe norms that diverge from this school of thought. For example, it is argued that the idea the law established, whereby the authority to dissolve the relationship is granted to the Qadi and not the arbitrators, deviates from Maliki law, as does the Qadi’s authority to appoint a third deciding arbitrator. The Petitioner’s attorney also refers to religious institutions in Muslim countries, such as Jordan, Egypt and Morocco, and even in the Palestinian Authority, where women were appointed in recent years to serve in the position of Qadis. The Petitioner’s attorney claims that according to the civil interpretation, Section 130 of the law is to be interpreted as allowing the appointment of a male or female arbitrator, based also on comparison with the provisions of the Mejelle, which deal with arbitration and grant the parties the freedom to choose the arbitrator acceptable to them.

 

9.The Petitioner’s attorney further claims that the Sharia court’s decisions are to be reversed as they are contrary to the Equal Rights for Women Act. According to the attorney, the Petitioner’s right to be heard (audi alteram partem) was impaired as her arguments regarding the appointment of the female arbitrator were not heard at all before the decisions of the Sharia courts were handed down.

 

10.In the supplementary arguments by the Petitioner, following the Sharia court giving its supplementary judgment, her attorney repeated the argument that the interpretation of Section 130 of the law must be separated from the Maliki school of thought and the law must be treated as an independent and modern statute. According to him, the Sharia courts have also not necessarily adhered to the Maliki school of thought in interpreting the law and that it has been ruled many times that the court has the authority to intervene and revoke the arbitrators’ judgment. He further argues that the Mejelle is based on the Hanafi school of thought and that that is how the residents of the country conducted themselves for several years, and therefore the rules of the Maliki school of thought should not be imposed upon them now. He states that no specific characteristics are required of the arbitrators other than them being acceptable to the parties.

 

The Respondent’s Arguments

 

11.The Respondent’s attorney claims first that the Petitioner’s right to be heard was not impaired since all her arguments were reviewed in writing before the Sharia Court of Appeals, which is not required to conduct oral hearings. As for Section 130 of the Family Law, he argues that this is part of the material-judicial-religious law that is based on the Quran. He presents references that the arbitrator is a judge of sorts who is somewhat inferior to a Qadi. The arbitrators’ authority to listen to the parties’ arguments, and even to rule on a divorce, indicates, so it is argued, their judicial position. The arbitrators’ authorities go to dissolving the relationship between the couple, and therefore their actions relate to the hard core of the laws of divorce. The Respondent’s attorney further states that the Court must accept the arbitrators’ judgment as long as it is not flawed. His conclusion is, therefore, that this is a religious judicial position that falls within the exceptions of the Equal Rights for Women Act. The Respondent’s attorney agrees that the Family Law was indeed legislated primarily based on the Hanafi school of thought, but it includes sections, such as Section 130, which were legislated based on the Maliki school of thought. Furthermore, he argues that the Court is authorized to appoint arbitrators without granting the parties the option of choosing arbitrators on their behalf. Finally, the attorney argues that this is not a case for the High Court of Justice to intervene.

 

12.In relating to the Sharia Court of Appeals’ supplementary judgment, the Respondent’s attorney reiterates his arguments and supports substance of the supplementary judgment. According to him, the Family Law is not a civil law, and contrary to the Mejelle, it is directly based on the Quran, which is a religious law. It is a lex specialis that prevails over the legi generali of the Mejelle. It is also argued that one must distinguish between arbitration under the Mejelle and arbitration under the Family Law. Arbitration under the Mejelle is pursuant to the parties’ desire and at their choice, while arbitration under the Family Law is mandatory by law and it is in fact the Qadi who is authorized to appoint. He further mentions that according to the Maliki school of thought, the arbitrators must be male.

 

The Position of the Attorney General

 

13.At our request, the Attorney General presented its position that the Family Law is a civil law that was legislated based on Sharia Law. During the Ottoman period it was applied to all of the subjects of the Empire irrespective of their religion, but since 1919 this law binds only the Sharia courts. The Family Law was primarily legislated based on the Hanafi school of thought, and it is turned to only upon a lacuna in the law. However, there are sections that were legislated based on other schools of thought, including Section 130, which is based on the Maliki school of thought. According to the Attorney General, the adoption of the Maliki school of thought in this context was apparently meant to benefit women, since this school of thought allows a woman to separate from her husband in broader circumstances and causes of action than the other schools of thought. According to this school of thought, the arbitrators must try to reconcile the couple that is in conflict, but should their attempts be unsuccessful, they have the power to separate the couple even without their consent. The arbitrators are further authorized to determine the sum of the dowry that the husband must pay the wife, according to the degree of fault by each party. The Attorney General clarifies that according to the Maliki school of thought the arbitrators are Qadis for all intents and purposes, and therefore, their ruling is final and binds the Qadi who is not authorized to intervene therein. Additionally, the arbitrator must be a man. However, there are schools of thought which relate to the arbitrators as representatives and allow a woman to be appointed to this position.

 

14.The Attorney General examines the two exceptions of the Equal Rights for Women Act. As for the exception regarding laws permitting or prohibiting marriage and divorce, the Attorney claims that there is doubt whether this exception applies. Indeed, according to the Maliki school of thought the arbitrators are authorized to dissolve the marriage, however, on the other hand it is not actual laws of divorce that are at hand, but rather the identity of those authorized to determine the divorce. According to the Attorney, it is doubtful whether the exception was meant to apply also to those authorized to implement the marriage and divorce laws. As for the exception regarding the appointment of a religious position pursuant to religious law, the Attorney General claims that according to the Maliki school of thought arbitrators have a somewhat judicial position that requires Sharia education. However he notes that this Court has ruled in the past that the arbitrators’ decision is not final and their decision is subject to the confirmation of the Sharia court, in which the court is also authorized to intervene. The Attorney General notes that the Sharia courts indeed do so de facto, similarly to the Hanafi school of thought. According to the Attorney General, these figures allegedly indicate that the exception does not apply to the appointment of the arbitrators. However, the Attorney General believes the exception also applies to religious positions that are not judicial. Since the position of the arbitrator was created by virtue of the Muslim religious law, it appears that the exception in the Equal Rights for Women Act does apply. The Attorney General adds that the Family Law grounds religious laws even if it was made by the Ottoman legislator which applied the law to all the subjects of the Empire.

 

The Position of the “Kayan” Organization

 

15.The "Kayan" organization emphasizes that the decisions of the Sharia court constitute an ultra vires act since they are contrary to the principle of equality and to the Equal Rights for Women Act. As for the exception regarding the appointment of a religious position according to religious law, the organization argues that it is to be interpreted narrowly, so that it shall only apply to actual religious or judicial positions. It is further argued that the arbitrator’s position is not a judicial or religious position and therefore does not fall within this exception. According to the provisions of the Family Law and according to the customary practice of Sharia courts, the arbitrators have the status of representatives of the parties and their recommendations are subject to the court’s confirmation. It follows that this is not a judicial position. According to the organization, these arguments were already accepted and ruled in the past, by this Court. The organization further adds that according to Sharia law and customary practice, the arbitrator can be any person whom either party chooses to appoint and that there are no criteria for such choice. The arbitrators can even be relatives of the couple. It is further argued that it is obvious that a relative, who lacks objectivity and independence in performing his duties, cannot accept a judicial position. Additionally, the Qadi is the one with the authority to confirm the marriage or to declare a separation between the parties. Scholars indicate that the Sharia court has deviated from the Maliki school of thought in all that relates to the roles of the arbitrator and has ruled that the court can reject the arbitrator’s judgment.

 

The “Kayan” organization further clarifies that it is its position that the arbitrator is not a religious position. There are no criteria for appointing an arbitrator, who may also be a relative, which indicates this is not a religious position. At issue, so it is argued, is a familial-social role that is intended to reconcile the couple. It also states that the Family Law is a civil law and argues that in any event the interpretation that minimizes the violation of the principle of equality should be chosen.

 

16.As for the exception relating to laws permitting or prohibiting marriage and divorce, the “Kayan” organization argues that since the arbitrator does not fulfill a judicial or religious position, and since the court is the one that rules on the divorce claim as it is permitted to reject the arbitrators’ recommendation, then this is not a matter of violating laws permitting or prohibiting divorce. The arbitrator has limited discretion that amounts to examining the fault of each of the parties and making a recommendation in the matter of the dowry.

 

17.In general, the “Kayan” organization further argues that preventing the appointment of a woman to the position of an arbitrator in a Sharia court critically violates women’s rights to dignity. It emphasizes that there is no relevant difference between men and women in terms of this position, and therefore, any distinction between them is improper. Furthermore, according to the organization, the appointment of women as arbitrators in necessary in order to realize women litigators’ right to self-expression, and so that they may have an arbitrator on their behalf who would listen to their inner-most feelings in such personal and sensitive matters, who would serve as a voice and a mouthpiece to the woman. Doing so would, in fact, prevent a double infringement, both to the arbitrating women and to the litigating women. Preventing the appointment of a woman as an arbitrator prejudices Muslim women’s access to Sharia courts and contributes to silencing their voice.

 

The Position of the Concord Center

 

18.The Concord Center focuses its arguments on the implications of international law on the case at hand. According to the Center, the Family Law and the Equal Rights for Women Act must be interpreted in light of the human rights conventions Israel committed to uphold. The Center mentions the International Convention for Civil and Political Rights, which protects the right of litigating parties to equality in civil legal proceedings. According to the Concord Center, the Sharia court’s interpretation violates this right, as it prevents one of the parties to the proceeding from exercising the litigating party’s right to choose the person who, pursuant to her discretion, will most efficiently represent her before the family council, while the other party benefits from the option of appointing such a person. According to the center, the said interpretation particularly violates women’s right to due process without discrimination. The disqualification of women to serve as arbitrators has negative implications for the status of women as litigating parties. Such disqualification signals to the litigating woman that her position is inferior to that of the man against whom she is litigating. Finally, the Concord Center argues that the Sharia court’s ruling excludes women in terms of public representation. Such exclusion is contrary to Israel’s commitment pursuant to Section 7(b) of the Convention on the Elimination of All Forms of Discrimination against Women, not to restrict women’s participation in the public arena.

 

Discussion and Decision – Intervening in the Judgment of Religious Courts

 

19.The religious courts, including Sharia courts, are independent judicial authorities with judicial jurisdiction in matters relating to personal status. As such, this court exercises narrow and limited judicial review to decisions of the religious courts, in accordance with that stated in Section 15 of Basic Law: The Judiciary:

 

15.       The Supreme Court

…

(c)        The Supreme Court shall sit also as a High Court of Justice. When so sitting, it shall hear matters in which it deems it necessary to grant relief for the sake of justice and which are not within the jurisdiction of another court.

(d)       Without limiting the general applicability of the provisions of subsection (c), the Supreme Court sitting as a High Court of Justice shall be authorized –

…

(4) to order religious courts to hear a particular matter within their jurisdiction or to refrain from hearing or continue hearing a particular matter not within their jurisdiction; provided that the court shall not entertain an application under this paragraph if the applicant did not raise the question of jurisdiction at its earliest opportunity; and if he had no reasonable opportunity to raise the question of jurisdiction until a decision had been given by a religious court, the Court may cancel a hearing that was held or a decision given by the religious court without authority.

…

 

It has been repeatedly said that this Court does not sit as an instance of appeal on decisions of the religious courts. As such, and in light of the authorities granted to them by law, defined causes of actions were prescribed for this Court’s intervention in decisions by religious courts (HCJ 2578/03, Pachmawi v. Pachmawi, para. 17 (May 8, 2006)). Among such causes of action is the cause of action of ultra vires – the cause of action of violating the rules of natural justice; and the cause of action enshrined in Section 15(c) of Basic Law: The Judiciary, regarding granting relief for the sake of justice (HCJ 11230/05, Muasi v. The Sharia Court of Appeals in Jerusalem, paragraph 7 (March 7, 2007) (hereinafter: the “Muasi Case”). These causes of action, and particularly the latter two, could include various matters from both sides of the coin of justice, violation of the rules of natural justice on the one hand, and relief that shall be granted for the sake of justice, on the other hand. As for this latter cause of action, it has been said:

 

“The latter cause of action for intervention – ‘for the sake of justice’ – is a blanket cause of action which can cover various different matters. The crux of all these matters is the need to grant relief for the sake of justice in the circumstances of a given case, and there is no necessary internal logical connection between them” (HCJ 5227/97, David v. The Great Rabbinical Court of Jerusalem, IsrSC 55(1) 453, 458-459 (1998)).

 

20.An additional cause of action justifying this Court’s intervention in the religious court’s decisions is the court’s deviation from the provisions of a law directed to it. The question whether this cause of action falls within the ultra vires cause of action prescribed in Section 15(d)(4) of Basic Law: The Judiciary, or rather within the cause of action justifying intervention to grant relief for the sake of justice, prescribed in Section 15(c) of Basic Law: The Judiciary, has been raised in the court’s rulings. The different classification of the causes of action implicates the determination of the scope of this Court’s intervention:

 

“This distinction between the causes of the High Court of Justice’s intervention according to the different alternatives of Section 15 of Basic Law: The Judiciary, could implicate the scope and extent of the High Court of Justice’s intervention in the relevant judicial act. If at hand is a court decision that is ultra vires since it did not follow all of the specific details of the civil partnership rule, such decision would generally be overturned. On the other hand, if the matter is classified as a case where relief must be granted for the sake of justice, then there is extensive discretion to examine the essence of the result reached by the court, from a perspective of justice, even if all of the specific details of the civil law required in the path chosen to obtain it, were not strictly implemented.” (HCJ 2222/99, Gabay v. The Great Rabbinical Court, IsrSC 54(5) 401, 426-427 (2000)).

 

In any event, the proper classification has yet to be ruled upon by courts, and it appears that we, too, are not required to rule on the matter.

 

The Matter Before Us

 

21.As emerging from the petition before us, the cause of action that merits our intervention in the Sharia court’s decisions is that relating to the religious court ignoring provisions of law directed to it. The relevant statutory provision here appears in Section 1A(a) of the Equal Rights for Women Act, which prescribes as follows:

 

“There shall be one law for a woman and a man for purposes of every legal act; any statutory provision which, for purposes of any legal act, discriminates against a woman because she is a woman shall not be followed.”

 

This statutory provision, which is also directed to the Sharia court, must be applied by the court, even if applying the religious law brings about different results:

 

“The actions of any court, which shall not act according to the law, shall be ultra vires. Because the Equal Rights for Women Act limited and restricted the authorities of the religious courts to act according to religious law, as they did before the Act’s legislation” (HCJ 187/54, Briya v. Qadi of the Muslim Sharia Court, Acre, IsrSC 9(2), 1193 (1955)).

 

Meaning, the religious court is not permitted to rule based on discriminating against the woman, at least as long as the exceptions to the application of the Equal Rights for Women Act do not apply, or as long as there is no other statute that trumps the provisions of the Equal Rights for Women Act (see HCJ 1000/92, Bavli v. The Great Rabbinical Court-Jerusalem, IsrSC 48(2), 221, 241 (1994) (hereinafter: the “Bavli Case”). It follows that should the Act apply to the case at hand, and the Sharia court reached a result that is contrary to this provision of the Law, and if there is no other law that implicitly overrides the provisions of the Equal Rights for Women Act, the petition is to be accepted and the decision of the Sharia court is to be overturned.

 

Therefore, first we shall have to examine whether the Act applies to Sharia court in the case before us, and whether the exceptions prescribed in it do not. To do so we must interpret the Act’s provisions, while elaborating on its fundamental principles and primarily on the principle of equality between the sexes. It is also necessary to elaborate on the essence of the Sharia court’s ruling in the matter before us. Should we find that the Act applies to the case at hand and that there is no other overriding statutory provision, it would be necessary to examine whether the Sharia court’s ruling violates it. Should the answer to this be in the affirmative, we shall examine the relief that should be granted to the Petitioner in this case.

 

The Principle of Equality Between the Sexes and the Equal Rights for Women Act

 

22.When the architects of the nation wrote the Declaration of Independence they promised to ensure “complete equality of social and political rights for all its citizens, regardless of religion, race and sex”. In doing so, they signed a bill for the benefit of the State, society and the women among it. A bill of promise of basic rights to life, liberty and equality. The State requested to honor the bill and in its early days legislated the Equal Rights for Women Act. The basis for the legislation of the Equal Rights for Women Act is, of course, the principle of equality between the sexes. The principle of equality constitutes one of the main foundations of our legal system and of the democratic rule, in general. The principle of equality is the soul of democracy. “Where there is no equality for a minority, there is also no democracy for the majority” (HCJ 6924/985, The Association for Civil Rights in Israel v. The Government of Israel, IsrSc 55(5) 15, 28 (2001) (hereinafter: the “Association for Civil Rights Case”)). This Court has emphasized the great importance of the principle of equality on many occasions, “setting its place in the center of the legal map and in the roots of all of the rules of law” (HCJ 6845/00, Niv v. The National Labor Court, IsrSc 56(6) 683 (2002) (hereinafter: the “Niv Case”); HCJ 2671/98, The Israel Women’s Network v. The Minister of Labor and Welfare, IsrSC 52(3) 630, 650-651 (1998) (hereinafter: the “Second Women’s Network Case”). Violating the principle of equality creates a double violation: both to the individual and to the public. Discrimination sends out a message of inferior status to the individual and to the discriminated group, and in doing so creates deep humiliation and violates the dignity of such individual or group (HCJ 4541/94, Miller v. The Minister of Defense, IsrSC 49(4) 94, 132 (1995) (hereinafter: the “Miller Case”); (HCJ 953/87, Poraz v. Mayor of Tel-Aviv-Jaffa, IsrSC 42(2) 309, 332 (1988) (hereinafter: the “Poraz Case”). “Discrimination is an affliction that creates a sense of deprivation and frustration. It damages the sense of belonging and the positive motivation to participate in social life and contribute to it” (HCJ 104/87, Nevo v. The National Labor Court, IsrSC 44(4) 479, 760 (1990) (hereinafter: the “Nevo Case”). Equality is essential for society and for the social contract upon which it is built. Infringing the principle of equality means not only prejudicing the individual discriminated against or the group experiencing the discrimination, but also “derogating from the entire public interest, from the character of the society, the wellbeing of all those who comprise it” (HCJ 5755/08, Aren v. The Government of Israel, para. 4 of Justice E. E. Levy’s opinion (April 20, 2009) (hereinafter: the “Aren Case”)). It should be emphasized that the meaning of equality is, not relating differently to people who are not different in any relevant way. The existence of a relevant difference directly and concretely related to the purpose at hand, could, however, justify a permitted and legitimate distinction (the Miller Case, on pages 109-110; the Nevo Case, on page 754). It shall further be noted that the examination of discrimination is an objective examination which is not impacted by the existence or absence of the intent to discriminate (the Niv Case, on page 698; the Second Women’s Network Case, on page 654).

 

23.The principle of equality holds many meanings and various sub-principles. However, the core of the principle of equality, or as it is called “the principle of equality in the narrow sense”, includes a list of defined causes of action which are referred to as the classic causes of action of equality or the generic causes of action of equality. Among these causes of action is equality between the sexes. Violation of the principle of equality in the narrow sense in considered especially severe, and in many countries is even deemed a violation of a constitutional right (the Association of Civil Rights Case, on page 27). “Discrimination due to religion, race, nationality or sex is among the most severe forms of discrimination”, and “the prohibition of sex discrimination – the prohibition of discrimination against women – became one of the strongest leading principles of Israeli law” (the Niv Case, p. 683; 689). Sex discrimination is a form of discrimination with which many of the world’s countries are dealing, and which requires eradication of prejudices and perceptions that were common in human society as to the essence of the differences between the sexes:

 

“Confronting the problem of discrimination in general, and with regard to differences between the sexes in particular, is not only our concern. It concerns every free society where the principle of equality is one of its foundations. Discrimination derives from a perception that was grounded in human society as part of a perspective that for generations viewed the status of women as inferior and without rights. The granting of rights to women has developed step by step. It received impetus and strength in this century as part of the ideological and practical renaissance aimed at eradicating discrimination between people. This struggle to eradicate discrimination against women because of their sex is taking place in various arenas and with a range of weapons. It occupies a place of honor in literature, philosophy, articles, the media, political frameworks and various public arenas.” (the Miller Case, p. 122; see also Justice Dorner’s review there, p. 129).

 

24.The principle of equality, in general, and the principle of equality between the sexes, in particular, have both been recognized in the State of Israel, since the birth of the State of Israel. The declaration of independence establishes the new state’s commitment to maintain “complete equality of social and political rights for all its citizens, regardless of religion, race and sex”. Not long after the Basic Laws were enacted, the principle of equality was recognized as a constitutional principle that is encompassed within human dignity – in its narrow model – and therefore, is protected by Basic Law: Human Dignity and Liberty. The position that was voiced was that the equality that is constitutionally protected is that whose violation amounts to humiliation. Sex discrimination was recognized as humiliating discrimination, and therefore a violation of a constitutional right (the Miller Case, p. 110, 132). It shall be noted that today an interim model has been adopted in the rulings of this Court, whereby “discrimination that does not involve humiliation may also be included within the boundaries of human dignity, provided it is directly related to human dignity as an expression of personal autonomy, freedom of choice and freedom of action, and such other aspects of human dignity as a constitutional right” (HCJ 6427/02, The Movement for Quality Government in Israel v. The Knesset, IsrSC 61(1) 619, para. 38 of President Barak’s opinion (2006); HCJ 4948/03, Elhanati v. The Minister of Finance, IsrSc 62(4) 406, para. 17 of Justice Hayut’s opinion (2008) (hereinafter: the “Elhanati Case”).

 

25.Israeli courts’ jurisprudence has, for many years, dealt with discrimination against women in various fields. The courts have constructed the roof beams upon the foundations laid by the legislature. Step by step, courts are taking strides towards eradicating discrimination against women, at least at the declarative and normative levels. The court applies the duty not to discriminate first and foremost to government authorities, “however since it derives from the fundamental principles of fairness and good faith that formulate any social contract and any jurisprudence that stem from them, the forms of the right to equality are not absent in the fields of private law” (the Elhanati Case, para. 17 of Justice Hayut’s opinion). Over the years, the legal system has played an important role in advancing the status of women in society and in realizing the aspiration towards an egalitarian society in which each individual has the opportunity for self-fulfillment, and realizing their capabilities, their desires and aspirations. The Court has not been deterred from intervening in and overturning decisions and actions that were afflicted by sex discrimination, in all walks of life, in a broad and varied list of matters: in the field of employment and wages (the Nevo Case; HCJ 1758/11, Goren v. Home Center (Do it Yourself) Ltd., (May 17, 2012); the Niv Case); in the matter of appropriate representation for women (the Aren Case; HCJ 5660/10, Itach-Women Lawyers for Social Justice Organization v. the Prime Minister of Israel, (August 22, 2010); HCJ 453/94, The Israel Women’s Network v. The Minister of Transportation, IsrSC 48(5) 501 (1994) (hereinafter: the “First Women’s Network Case”); the Second Women’s Network Case; NLC 33/3-25, Air Crew Flight Attendants Committee - Hazin, IsrLC 4 365 (1973)); in the military and security field (the Miller Case); in the family law field (developing the partnership presumption – see for example CA 1915/91, Yaacobi v. Yaacobi, IsrSC 49(3) 529 (1995); FC 4623/04, Anonymous v. Anonymous, IsrSC 62(3) 66 (2007); during pregnancy, birth and parenting (HCJ 11437/05, Kav Laoved v. The Ministry of Interior, (April 13, 2011)); and more. “The equal status of women within the principle of equality is not solely formal and it must span over all the arenas of our life in a practical and real way” (the Poraz Case, p. 342). The meaning of all of the above is that we hear the sounds of equality but still do not see it in full. There are still things to be done, improved and advanced, and the Court has an important and significant role in this matter.

 

One of the sensitive fields in which the court must deal with discrimination against women is that field which directly or indirectly relates to matters of religious law, religion and state. Indeed, the Court has, on more than one occasion, addressed the principle that prohibits discrimination against women because of their sex, in this field as well, and has overturned decisions afflicted by such discrimination. Thus, this Court intervened in the matter of training and appointing female rabbinical pleaders when it appeared that the relevant institutions were attempting to make it difficult for them in order to prevent such positions from being performed by women (HCJ 6300/93, “Hamachon Lehachsharat Toanot Beit Din” v. The Minister of Religious Affairs, IsrSC 48(4) 441 (1994) (hereinafter: the “Rabbinical Pleaders Case”); thus, a petition to order that the female petitioner be added to the Religious Council in Yerucham, after such candidate was disqualified merely because she was a woman, was accepted (HCJ 153/87, Shakdiel v. The Minister of Religious Affairs, IsrSC 42(2) 221 (1988) (hereinafter: the “Shakdiel Case”); and thus it was ruled that a local authority is not permitted to avoid selecting a woman as a representative to the meeting electing a city Rabbi, merely because she was a woman (the Poraz Case).

 

26.However, this is a field in which discrimination against women at the declarative and principle level, too, still remains. This is partly protected by legislation, and the Court must maneuver its way in a manner that respects the legislator’s decisions, but with maximum commitment to the basic principle and constitutional right of equality for women. This is particularly true when at hand are public and state institutions whose services are required by the entire public who cannot avoid such institutions’ services. The perspective regarding discrimination against women shall be different for a member of a community that chooses to belong to it and to accept its rules and the rulings of its institutions, than for a public institution which the public cannot choose whether or not to need its services (see Ruth Haplerin-Kaddari, More on Legal Pluralism in Israel, 23 559, 570 (5760)). It is clear that as every right, the right to equality between the sexes is also not absolute and at times requires balancing with additional interests and rights. However, a violation of equality between the sexes shall have to comply with the tests of the Limitation Clause prescribed in Basic Law: Human Dignity and Liberty (HCJ 11163/03, Vaadat Hamaakav Haelyona Leinyanei Haaravim Beyisrael v. the Prime Minister of Israel, IsrSC 61(1) 1, para. 22 of President Barak’s opinion (2006); the Miller Case, p. 138).

 

27.When we focus on religious courts, the difficulty is exacerbated, since discrimination is inherent to these institutions’ system. This is primarily because only men are being appointed to judicial positions, the appointment to which is allegedly protected by the Act, as we shall see below. Additionally, repeated arguments are heard that the religious law itself often creates discrimination against women, and that at the very least, in terms of results, there is often some kind of propensity against women in these institutions (see for example, Frances Raday, Religion and Equality: Through the Perspective of Jurisprudence, 341, 381, 386 (Vol B, 5760); Frances Raday, On Equality, 19 (edited Frances Raday, Carmel Shalev and Michal Liban-Kobi, 1995); Shirin Batshon, (Kayan Organization, 2012); Aharon Layish, The Status of the Muslim Women in the Sharia Court in Israel, 364 (edited Frances Raday, Carmel Shalev and Michal Liban-Kobi, 1995) (hereinafter: Layish); Pinchas Shipman, Rabbinical Courts: Where Are They Heading, 2 523 (5755); Yifat Biton, Feminine Matters, Feminist Analysis and the Dangerous Gap between Them: Response to Yechiel Kaplan and Ronen Perry, 28 871, 875, 890 (5765)). It shall be emphasized that it is important to maintain the sense of equality and egalitarian results particularly in these institutions, which deal with most sensitive matters of family law, and already often reflect a struggle between the sexes. In any event, the principle of equality also applies in religious courts, subject to the exceptions that were prescribed in the Act (the Shakdiel Case, on page 278). Hence, the role of the state and the government systems, with the support and intervention of this court, is to try, to the extent possible, to balance the said picture, so that women who require the services of these institutions feel they are equal and that they receive the same treatment given to men. For example, one can encourage the appointment of candidates to judicial positions, who besides their professional skills, are supported by women’s organizations (see my remark in HCJ 8756/07, Amutat “Mavoi Satum” v. The Committee for the Appointment of Religious Judges (June 3, 2008)); additionally, one can promote the appointment of women to managerial and administrative positions in the religious courts themselves (see HCJ 151/11, The Ruth and Emanuel Rackman Center for the Advancement of Women's Status v. The Ministry of Justice, (December 27, 2011)); one can also enable and encourage women to fill various positions in religious courts that do not represent the court itself, such as was done with respect to female Rabbinical pleaders in the Rabbinical Courts (the Rabbinical Pleaders Case). This is also the point of departure when examining the appointment of female arbitrators in Sharia courts. Having said that, we must examine the matter in light of the provisions of the Equal Rights for Women Act.

 

The Equal Rights for Women Act, Its Exceptions and Interpretation

 

28.Along with the work done by case law in advancing equality between the sexes, the legislature did not stand still either. Over the years, commencing from shortly after the establishment of the State and until this very day, statutes have been legislated with the purpose of protecting women from sex discrimination. First on the list of these laws is the Equal Rights for Women Act, which was legislated in as early as 1951, and which we discuss in further depth below. Additionally, the Authority for the Advancement of the Status of Women Act, 5758-1998, and the Local Authorities (Advisor for the Advancement of the Status of Women) Act, 5760-2000, were legislated with the general purpose of advancing equality between men and women in Israel. In the area of employment the following statutes and provisions were legislated: section 42(a) of the Employment Service Law, 5719-1959; the Equal Employment Opportunity Act, 5748-1988; the Equal Pay for Female and Male Employees Act, 5724-1964, which was replaced by the Equal Pay for Female and Male Employees Act, 5766-1996; and the Encouragement of Advancement and Integration of Women in the Workforce and the Adjustment of Workplaces for Women Act, 5768-2008. The Women’s Employment Act, 5714-1954, which was intended to protect women in the workplace was also legislated. Sections intended to obtain appropriate representation of women in various institutions and bodies were also legislated (see Section 18A of the Government Companies Act, 5735-1975; Section 4(b) of the Senior Citizens Act, 5750-1989; Sections 8(b)(3) and 16(c) of the National Laboratories Accreditation Authority Act, 5757-1997; Section 63(a)(3) of the Sewage and Water Corporations Act, 5761-2001; Section 15A of the State Service (Appointments) Act, 5719-1959; Section 11(d) of the National Battle Against Road Accidents Act, 5757-1997; see also the Niv Case, on page 686; the Second Women's Network Case, on pages 652-654). One of the long-standing and general statutes in this matter is the Equal Rights for Women Act, which stands at the heart of this petition, and on which we shall now focus.

 

29.As stated, the Equal Rights for Women Act was legislated in as early as 1951, and its purpose was to maintain “complete and full equality for women – equality in rights and obligations, in the life of the state, society and market and in the entire network of laws” (see the Equal Rights for Women Bill, 5711-1951, on page 191). The Act was recognized by this Court as having a special status, superior to ordinary laws. As such, it was referred to by President Barak as a “royal” law (the Bavli Case, p. 240), and Justice Zilberg emphasized that “this law is not like another ordinary law! This is an ideological, revolutionary law that changes social order” (HCJ 202/57 Sides v. The President and Members of the Great Rabbinical Court, Jerusalem, IsrSc 12 1528, 1537 (1958)). The Law is directed at all of the government authorities as well as all of the judicial instances, and religious courts were explicitly obligated to act accordingly (see Section 7 of the Act and the Bavli Case, p. 240). In 2000, a purpose statement was added in the following section:

 

1.Purpose of the Act

The purpose of this Act is to set principles for the assurance of full equality between women and men, in the spirit of the principles of the Declaration of Independence of the State of Israel.

 

It shall be noted that within that same amendment from the year 2000 the exception provided in Section 7(c), upon which we shall elaborate further below, was also added (see Equal Rights for Women (Amendment no. 2) Act, 5760-2000). The Act’s center of gravity, in my opinion, is located in the general and broad provision anchored in Section 1A of the Act, pursuant to which “There shall be one law for a woman and a man for the purposes of every legal act.” This section has been interpreted broadly as anchoring women’s right to equality not only regarding any legal act, but also regarding any legal aspect whatsoever (see Civil Appeal 337/61, Lubinski v. The Assessment Officer, Tel Aviv, IsrSC 16 403, 406 (1962); the First Women’s Network Case, p. 522, the Poraz Case, p. 335). It is further important to emphasize that this is a declaratory and descriptive statue rather than one that is constitutive, since the principle of equality between the sexes existed before the Act was legislated (see the Niv Case, p. 686). An interesting question then follows – what will the impact of the principle of equality on the matter be should we determine that the Equal Rights for Women Act does not apply to the case at hand (see the Shakdiel Case, p. 277). In any event, as we shall see below, we need not rule on this issue here. However, I find it appropriate below to add a few words on it.

 

30.The Equal Rights for Women Act applies broadly. Section 7(a) provides that every governmental authority is obligated to honor the rights detailed in the Act. Section 7(b) expands this application to all courts and tribunals competent to address matters of personal status as well, unless all parties agree to litigate according to the laws of their community. However the law establishes two central exceptions to its applicability, both of which relate to religious courts. Section 5 of the Act provides that “this Act shall not infringe any legal prohibition or permission in connection with marriage and divorce”. Section 7(c), which, as mentioned, was added to the Act in the legislative amendment of 2000, provides that:

 

The provisions of this Act shall not apply to an appointment to a religious position under religious law, including the appointment of rabbis and of holders of judicial positions in religious courts.

 

31.In light of the Act’s objective, its unique status and the principles upon which it relies, it is my opinion that the Act should be interpreted broadly while the exceptions provided in the Act should be interpreted narrowly. This approach follows this Court’s jurisprudence that legislation that violates basic human rights should be interpreted narrowly, based on the assumption that the Act’s provisions are not intended to violate the principle of equality (the Miller Case, p. 139; the Nevo Case, p. 763; the Shakdiel Case, p. 273; the Poraz Case, p. 322). This is all the more relevant when the principle of equality under the Equal Rights for Women Act is concerned:

 

“In this case even more weight should tip the scale in favor of the Equal Rights for Women Act. This law reflects an important and central value, a principle that formulates life in our state as a civilized state. The Equal Rights for Women Act declares a value that should encompass our entire legal system. Therefore, as long as nothing explicitly contradicts this law, an interpretation that corresponds with the principle of equality between the sexes should be preferred” (the Nevo Case, p. 764).

 

This approach certainly corresponds with the general objective of the Act, as is explicitly provided in Section 1 of the Act, which addresses securing full equality between men and women, explicitly provides. It is appropriate in a democratic state that honors human rights, in general, and equality between the sexes, in particular, and is all the more relevant when an interpretation relating to state and public institutions that serve the entire public is concerned. This approach also addresses the need to interpret the provisions of the Act in light of the spirit of Basic Law: Human Dignity and Liberty, which protects women from discrimination (see the Miller Case, p. 138).

 

32.The exceptions that are relevant to the case at hand appear, as mentioned, in Section 5 and Section 7(c) of the Equal Rights for Women Act. Pursuant to Section 5 of the Act we must examine whether the appointment of a female arbitrator according to Section 130 of the Family Law violates laws permitting or prohibiting marriage or divorce in Muslim law. Pursuant to Section 7(c) of the Act, we must examine whether the appointment of arbitrators is an appointment to a religious position according to religious law or an appointment to a judicial position in a religious court. In order to examine whether or not the case before us falls under the said exceptions, we must first elaborate on the legislative framework in Sharia law that applies to the matter at hand and understand its essence.

 

Arbitrators in Sharia Law and Section 130 of the Family Law

 

33.Before turning to understanding the matter that was presented to the Sharia Court, I shall state in general that the authority of the Sharia courts stems from Section 52 of the King’s Order in Council that grants Sharia courts exclusive jurisdiction to address matters of personal status of Muslim Israeli citizens. The matters of personal status also include matters of marriage and divorce pursuant to Section 7 of the Act of Procedure of the Muslim Religious Courts 1933 (see S. D. Goitein and A. Ben Shemesh The Muslim Law in the State of Israel 42, 276 (1957) (hereinafter: “Goitein and Ben Shemesh”)). It shall be noted that the Family Matters Court Act, 5755-1995, was amended in 2001 to grant parallel jurisdiction to the family matters courts to address personal status matters of Muslims, except matters of marriage and divorce (see HCJ 2621/11, Anonymous v. The Sharia Court of Appeals in Jerusalem, para. 13 (December 27, 2011)). The matter before us, which addresses the divorce of a couple, is, indeed, still in the exclusive jurisdiction of the Sharia court.

 

34.The law that applies to this case is the Ottoman Family Law. The Family Law was legislated by the Ottoman regime and its purpose was to regulate the family laws that would apply to all citizens regardless of their religion. In 1919, the British Mandate adopted the law in the framework of the Muslim Family Law Ordinance, but limited its applicability to Muslims only. The statute’s provisions address matters of marriage and divorce, and the drafters of the law adopted various laws from various schools of Muslim thought – the Hanafi, the Shafi, the Maliki and the Hanbali – in an attempt to choose the rules most appropriate for the twentieth century (Goitein and Ben Shemesh, p. 213; Layish, p. 371).

 

35.The parties before us disagree on whether the Family Law is a religious or civil law. The Family Law was legislated by the Ottoman legislature and was even intended to apply to all citizens of different religions, allegedly indicating that the law is “civil”. The Family Law does not adopt each and every rule of the Quran. For example, there are forms of termination of marriage which appear in the Quran and which were not expressed in the Family Law (see Goitein and Ben Shemesh, p. 139). The Ottoman legislature even took the liberty to select various rules from different schools of thought in Muslim law, as a sign of the times, as it deemed fit. However, the Ottoman legislature did not create rules out of nowhere, but rather, even if in a mixed manner and as per its civil discretion, anchored rules from the various schools of thought which are ultimately based on the Sharia and the Quran (see Iyad Zahalka, The Identity of the Sharia Courts in Israel, in 75 (edited by Liat Kozma, 2011)). It follows that I am willing to assume that the Family Law is a law that is religious in its essence (however, see Moussa Abu Ramadan, The Status of the Ottoman Family Law” in 49 (edited by Liat Kozma, 2011) (hereinafter: “Abu Ramadan”).

 

36.The section the Sharia court applied in this case is Section 130 of the Family Law, which reads as follows, as translated by Goitein and Ben Shemesh:

 

“If arguments and disagreements erupt between a couple, and one of them approached a judge, the judge shall appoint two arbitrators from the couple’s families and if arbitrators from among the relatives are not found or do not have the required characteristics, the judge shall appoint appropriate arbitrators not from among the relatives. A family panel of such composition shall listen to the parties’ complaints and arguments and shall try, to the best of its ability, to reconcile them. If this is not possible because of the husband, they shall rule that the marriage be untied, and if because of the wife, they shall also revoke her right to the entire dowry or a portion thereof. If the arbitrators cannot agree among themselves, the judge shall appoint appropriate arbitrators in a different composition, or a third arbitrator not from among the relatives. The decision of such persons shall be final and non-appealable.”

 

The section anchors an additional way of dissolving the marriage in the event that disputes emerge between the couple. Each one of the couple may demand that a family “panel” or “council” be established and that it shall be comprised of one representative from the husband’s family and one representative from the wife’s family. The council must attempt to reconcile the couple, but if they do not succeed, they must rule to untie the marriage and determine the scope of the dowry to be paid (the Muasi Case, para. 9). If the first arbitrators that were appointed do not agree among themselves, additional arbitrators must be appointed or a third arbitrator must be appointed to decide (HCJ 9347/99, Hamza v. The Sharia Court of Appeals in Jerusalem, IsrSC 55(2) 592, 597 (2001) (hereinafter: the “Hamza Case”).

 

37.The different schools of thought in Sharia law viewed the role of arbitrators differently. As the Sharia court stated in its decision here, the Maliki school of thought allows arbitrators to dissolve the marriage themselves without the involvement of the Qadi, and they serve as a kind of Qadi themselves. According to this school of thought, the arbitrators must be male adults. In contrast, the Hanafi school of thought, along with other schools of thought, views the arbitrators as representatives of the parties, and therefore there is nothing preventing the Qadi from intervening in their decision. According to these schools of thought, a woman can be appointed as an arbitrator (see also Moussa Abou Ramadan, Divorce Reform in the Sharia Court of Appeals in Israel (1992-2003), 13, 2 / (2006) (hereinafter: Abou Ramadan); Abu Ramadan, p. 61).

 

38.The matter of interpretating Section 130 of the Family Law was already brought before this Court in the Hamza Case, which addressed how to interpret the end of the section that “the decision of these people shall be final and is non-appealable.” This Court interpreted the section to mean that after the arbitrators completed their role, the matter is handed to the Sharia court to make its decision, and it has the discretion whether or not to adopt the arbitrators decision:

 

“It is my opinion that the proper interpretation of the sentence in dispute is that the finality mentioned therein means that from that stage, the matter is transferred to the decision of the Sharia court that appointed the arbitrators. At this stage, the arbitrators have completed their role, and the Sharia court is to have its say. The sentence uses the phrase “the decision of these people.” “These people”: the arbitrators, and the finality means that their decision is final, in the sense that their decision is the last decision to be given in by arbitrators before the Sharia court has its say. The arbitration proceeding pursuant to Section 130 has been exhausted and from this stage the Sharia court must rule in the dispute with the arbitrators’ decision before it. This does not mean that the Sharia court cannot return the matter to the arbitrators. But as of this stage, the arbitrators have completed their work, the decision is “final”, and the matter is transferred to the Sharia court for it to reach a decision.

This interpretation accords with the fact that in order for a separation between the couple to be valid, a Sharia court judgment is required. The arbitrators’ decision in and of itself does not dissolve the marriage. Only once a judgment by the court is handed down can the divorce be registered under the law (Section 131 of the law). It is unreasonable to interpret the sentence in dispute such that even though the court must issue a judgment, it does not have the discretion whether or not to accept the arbitrators’ decision. Only an explicit statement that the Sharia court is bound by the arbitrators’ decision and has denied the authority to rule in the matter, could bring about such an extreme result. Therefore the correct interpretation is that the arbitrators’ decision is final, on the arbitration level, but does not derogate from the regional Sharia court’s authority to consider the merits of the arbitrators’ decision and decide whether or not to adopt it” (the Hamza Case, p. 598).

 

According to this interpretation, the final authority to confirm a divorce judgment is granted to the Sharia court. The arbitrators’ decision itself does not dissolve the marriage, and the Sharia court must exercise its discretion and decide whether to adopt the arbitrators’ decision, reject it or accept it in part. The parties may raise arguments against the arbitrators’ decision before the Sharia court and the Sharia court has the authority to accept such or other arguments. It is the one that makes the final ruling in the dispute before it. It shall be noted that in its ruling, the Court also relied on the customary practice in Sharia courts, whereby the Sharia courts have consistently ruled that they have the authority to intervene in the arbitrators’ decision:

 

“One can see that the Sharia court intervenes in the arbitrators’ conclusion when it finds that it does not accord with the facts of the case or is not based on sufficiently solid evidence. It can further be seen that in certain circumstances the court sends the case back to the arbitration level. Meaning, it also emerges from the customary practice that the court has the authority to intervene in the arbitrators’ decision, and that this is how the sentence that is in dispute is interpreted." (The Hamza Case, p. 600).

 

This case law has indeed since been implemented by this Court (the Muasi Case).

 

 

 

Applying the Exceptions of the Equal Rights for Women Act on the Appointment of Arbitrators

 

39.After elaborating on the Equal Rights for Women Act, its purpose and the manner it is interpreted, as well as on the essence of the matter before us, it is now time to examine whether the exceptions in the Act apply to the appointment of arbitrators under Section 130 of the Family Law. The first exception is that in Section 5 of the Act whereby “this Act shall not infringe any legal prohibition and permission in connection with marriage and divorce.” In this matter I agree with the Attorney General’s position that this section was intended to apply to the content of the religious law itself that regulates the matters of divorce and not to the laws that apply to the persons having the authority to implement such laws. This explicitly emerges from the language of the section that deals with the prohibition and permission laws.

 

Furthermore, as mentioned, in my opinion the exceptions in the Act should be interpreted narrowly and thus the interpretation which relates only to the content of religious law, as implied by the language of the section itself, must be preferred. Section 7(c) of the Act also supports this interpretation, since it addresses the persons holding the positions that implement the religious law. The logical conclusion is that Section 5 does not address those in these positions. However, I shall leave instances where a certain appointment in and of itself results in violating laws prohibiting and permitting marriage or divorce for future consideration. In the case of the appointment of arbitrators, at hand is an appointment to a position that exercises authorities related to divorce and not to the actual law that regulates divorce. Additionally, as we saw, there are schools of thought in Sharia law which allow women to be appointed as arbitrators. So the question left for future consideration does not arise. Hence, the conclusion is that the exception in Section 5 does not apply to the case at hand.

 

40.The main exception on which the litigating parties focused, is in Section 7(c) of the Equal Rights for Women Act, and in light of its importance I found it appropriate to restate it here as well:

 

(c)        The provisions of this Act shall not apply to an appointment to a religious position under religious law, including the appointment of rabbis and of holders of judicial positions in religious courts.

 

The section effectively includes two exceptions, and we must explore the application of both here. The first addresses the “appointment to a religious position under religious law,” and the second addresses the “appointment of holders of judicial positions in religious courts.” On its face, according to the Act’s language the second exception is encompassed by the first exception, but we shall examine each exception separately.

 

41.Is the appointment of arbitrators an appointment to a religious position under religious law? As mentioned, I am willing to assume that the Family Law is a religious law and therefore the end part of the exception applies. This assumption is not free of challenges, because this Act was legislated by a civil legislature and was absorbed into our general system of laws (see Abu Ramadan). However, we shall leave this assumption in place, since in any event I am of the opinion that one cannot say we are concerned with a religious position. The legislature did not exclude any appointment to a position under religious law, but rather only the appointment to a religious position under religious law. This distinction by the legislature is significant. I find much logic in this distinction. There can be an appointment to an administrative position under religious law. Why should such an appointment be excluded from the provisions of the Act? I believe that the expression “religious position” must be interpreted as a position in which some level of professionalism and expertise in religious law and the exercise of such law in the course of the position are required (see the Shakdiel case, p. 274: “Indeed, there is nothing in the Religious Services Act that indicates that only religious and legal scholars should serve on religious councils, and in principle even a non-religious person is qualified to serve on the council”). The more professionalism and expertise in religious law are required for the position and the more religious law is actually exercised in the course of the position, the more we will tend to perceive the position as a religious position, and vice versa.

 

The appointment of arbitrators pursuant to Section 130 of the Family Law does not meet such definition at all. The arbitrators, as we have seen, are representatives of the disputing couple’s relatives. They are not required to have any familiarity with religious law, skills, understanding or qualification in this law. They have no professionalism or expertise in exercising the religious law. Even according to the Maliki school of thought, the characteristics are unrelated to the religious matter (for example, it is required that the arbitrators be fair, mature, adult persons who are not slaves, are not corrupt, are not wastrels and are not atheists. It is preferable that they be relatives or neighbors and in any event that they be aware of the problems between the parties. See Abou Ramadan, p. 264-265). Furthermore, the arbitrators are not required to implement religious law in the course of their position. All they are required to do is act according the provisions of the section – to try to reconcile the couple, and when unable to do so, they must rule a divorce while determining which party is at fault, and accordingly, the scope of the dowry. Once they encounter any problem they must turn to the Sharia court for instructions (see the Muasi Case, paragraph 13).

 

The conclusion is, therefore, that the appointment of the arbitrators is not a religious appointment under religious law, and therefore is not included in this exception.

 

42.Is the appointment of arbitrators an appointment to a judicial position in a religious court? I believe that the answer to this question is also in the negative. On its face, it appears that the section’s interpretation must be limited only to holders of judicial positions in actual religious courts, such as rabbinical judges or Qadis. However, even were we to assume that the exception should be interpreted more broadly, it would not cover the appointment of arbitrators pursuant to Section 130 of the Family Law. As mentioned, in the Hamza Case the Court held that the arbitrators’ decision is not final and is subject to the Sharia court’s absolute discretion. In practice, Sharia courts intervene in the arbitrators’ rulings (see Abu Ramadan, p. 61). It follows that even pursuant to Section 130 of the Family Law the judicial position to rule the divorce is granted to the Qadis in Sharia courts, and not to arbitrators. While arbitrators are important auxiliary tools for Qadis in ruling in the dispute between the couple, they do not make the final decision and they have no authority to divorce the couple without receiving material confirmation from the Sharia court of such decision. The conclusion is that arbitrators cannot be perceived as holding any judicial position whatsoever. It shall be further noted that contrary to holders of a judicial position, arbitrators are not an objective party in the dispute, but rather an involved party, that is generally appointed from among the relatives and as per the desire of the parties in dispute, and therefore, their position cannot be perceived as a judicial position.

 

Hence, Section 7(c) does not apply to the appointment of arbitrators pursuant to Section 130 of the Family Law.

 

43.It emerges from the above analysis that the exceptions provided in the Equal Rights for Women Act do not apply to the case at hand. It follows that the Sharia court should have ruled in this case according to the provisions of the Act that there shall be one law for a woman and a man. The parties before us did not, in fact, dispute the fact that the ruling of the Sharia court was contrary to this provision. None of the parties even raised an argument that there are contrary or conflicting interests in the matter. In my opinion it cannot be said that Section 130 of the Family Law intended for the provisions of the Equal Rights for Women Act not to apply. First of all, the Equal Rights for Women Act was legislated after the Family Law. Secondly, there is not even a hint in the section implying the intention of the law not to allow the appointment of female arbitrators. Furthermore, the purpose of the section supports the appointment of female arbitrators according to the parties’ desire. The arbitrators are meant to represent the parties. They are meant to try to reconcile the couple, and if this is unsuccessful, to determine fault in the dissolution of the couple’s relationship. As such, it is proper to allow the couple to choose an arbitrator who shall be acceptable to them and with whom they are comfortable. Indeed, the Sharia court, as occurred in the case at hand, approaches the couple and allows them to choose an arbitrator on their behalf who shall be approved by the court. Since we are concerned with a dispute between a couple, in a system that is generally patriarchal, it should not come as a surprise that a woman would, at times, prefer to appoint a woman, rather than a man, as arbitrator on her behalf (and of course the man may as well). Perhaps by appointing someone who is acceptable to each of the parties and with whom they are comfortable, the chances of reconciling the couple increase. Similarly, maybe the chances of reaching the correct decision regarding each party’s fault in the dissolution of the relationship and the scope of the dowry would also increase. It follows that the objective of the section also indicates the need to allow a female arbitrator to be appointed.

 

The conclusion that emerges from all of the stated above is that the decision by the Sharia court is to be overturned as it ignored the provisions of the Equal Rights for Women Act. Before I turn to examine the relief, I would like to add one additional remark beyond the necessary scope here.

 

44.It is possible that we would have reached the same result even had we assumed that the Equal Rights for Women Act does not apply to this case. Religious courts, as all judicial tribunals and government authorities, are subject to the fundamental principles of the system, including the principle of equality, which has been consistently implemented in the rulings of this Court. As I mentioned, the principle of equality between the sexes was not born of the Equal Rights for Women Act, but rather only received practical and declarative grounding. Therefore, religious law must also be exercised while taking the fundamental principles of the system, in general, and the principle of equality, in particular, into consideration, to the extent possible within the limitations of the religious law itself. As President Barak stated “There is equality in the application of the principle of equality” (the Shakdiel Case, p. 278; see also the Bavli Case, p. 248). Thus, Basic Law: Human Dignity and Liberty provides that “All governmental authorities are bound to respect the rights under this Basic Law” (Section 11). In my opinion, the implication of this provision is that if there is a customary school of thought in the religious law that conforms to the principle of equality, the religious court must prefer it over a different school of thought in the religious law that does not conform to such principle.

 

45.As I specified above, there are a number of customary schools of thought in Sharia law which religious courts as well as the Ottoman legislature applied in a mixed fashion, without any absolute commitment to one school of thought or another (see also Goitein and Ben Shemesh, p. 24). Indeed, part of the Family Law is based on the Maliki school of thought that only allows appointment of male arbitrators. However, there is also the Hanafi school of thought which is customary in the Muslim world and upon which the Mejelle is based (Goitein and Ben Shemesh, p. 4). Even most of the Family Law is based upon it (Iyad Zahalka 115 (2009)). It allows the appointment of female arbitrators (and it shall be noted that it also allows the appointment of female Qadis). In my opinion, given the principle of equality, the court should have preferred the school of thought that fits this principle over the school of thought that denies it. Especially given that in fact the Sharia courts actually conduct themselves in a manner similar to the Hanafi school of thought, since they do not relate to the arbitrators’ decision as final, but rather exercise their discretion whether or not to confirm it.

 

46.It shall be further emphasized that I do not accept the argument that should it be decided to appoint a female arbitrator similar to the Hanafi school of thought, the Sharia court will have to also adopt the causes of action for divorce of such school of thought, which are more stringent against the wife (see Goitein and Ben Shemesh, p. 141). First of all, as mentioned, the law combines laws from different schools of thought, and therefore there is nothing preventing the appointment of arbitrators under the Hanafi school of thought, meaning allowing a female arbitrator, while the causes of action of divorce shall be determined under the Maliki school of thought, which is more friendly toward women, as has been done so far. The causes of action of divorce have nothing to do with the characteristics of the arbitrators. Secondly, the causes of action of divorce have already been grounded in the Family Law, and it is impossible to derogate from those that are grounded in the law and are customary today as per the rulings of the Sharia court (see CrimAppeal 353 Al-Fakir v. the Attorney General, PD 18(4) 200, 221 (1964)).

 

Summary and Relief

 

47.As we have seen, the exceptions of the Equal Rights for Women Act specified in Sections 5 and 7(c) of the Act, do not apply to the appointment of arbitrators under the Family Law. It follows that the Sharia court should have taken the provisions of the Act into consideration and it failed to do so. Taking the provisions of the Equal Rights for Women Act into consideration would have led to the result that it is possible to appoint female arbitrators, and in turn to the approval of the arbitrator suggested by the Petitioner. The conclusion that follows is that the Sharia court’s decision is overturned. The case shall be remanded to the Sharia court for the arbitration process to continue, while granting the Petitioner the option to choose a female arbitrator on her behalf. Hopefully this may open a window to equality and prevent discrimination among officers in this field.

 

Should my opinion be heard, the petition would be accepted. The Respondent would pay the Petitioner’s costs in the amount of NIS 15,000.

 

 

 

Justice

 

 

Justice M. Naor

 

1.I agree with my colleague, Justice Arbel’s extensive judgment.

 

2.At the basis of the Sharia Court of Appeals’ reasoned decision is the approach that arbitrators are Qadis. The Sharia court summarized its approach in Section 12 of the reasoned judgment dated June 18, 2012, as follows:

 

“12.     In summary, arbitrators pursuant to Section 130 of the law are Qadis and not representatives, and the judgment regarding the dissolution of a marriage is in their hands, and the Qadi's authority is to confirm their judgment. As for the monetary rights, the dowry resulting from the dissolution, the Qadi has the authority to alter the judgment of the arbitration panel and rule that the wife receive the entire dowry in the absence of a Sharia cause of action to reduce it, and the sole purpose is to prevent prolonged litigation” (my emphasis – M.N.)

 

3.Accepting this approach that the judgment regarding the dissolution of the marriage is in the hands of the arbitrators and that the Qadis’ authority is solely to confirm the arbitrators’ ruling, could, in other cases, lead to severe results. Where Qadis conclude the facts of the case do not justify the arbitrators’ ruling that the marriage is to be dissolved, are the hands of Qadis – who were authorized by the law of the State to judge – indeed tied by arbitrators’ final judgment regarding the dissolution of a marriage? This is hard to accept. This is an approach that takes judging out of the hands of those who were appointed to judge – the Qadis. As my colleague noted, this is inconsistent with the rulings of this Court in HCJ 9347/99, Hamza v. the Sharia Court of Appeals in Jerusalem, IsrSC 55(2), 592 (2001) and in HCJ, Muasi v. The Sharia Court of Appeals in Jerusalem (March 7, 2007).

 

 

 

Deputy President

 

 

 

 

 

Justice N. Solberg

 

I agree.

 

Justice

 

 

It was decided as per Justice E. Arbel’s judgment.

 

Given today, the 19^th of Tamuz, 5773 (June 27, 2013).

 

 

Deputy President                                Justice                                     Justice

 

 

In the Supreme Court

Sitting As the High Court of Justice                                             HCJ 8638/03

 

Before:	His Honor, Vice President (Ret.) M. Cheshin Her Honor, Justice A. Procaccia His Honor, Justice S. Joubran
The Petitioner:	Sima Amir
v.
The Respondents:	1. The Great Rabbinical Court in Jerusalem
	2. The Regional Rabbinical Court in Jerusalem
	3. Yoseph Amir
On Behalf of the Petitioner:	Adv. Michael Korinaldi
On Behalf of the Third Respondent:	Adv. Nechama Segal
On Behalf Of the Rabbinical Courts System:	Adv. S. Jacoby

 

JUDGEMENT

 

Justice A. Procaccia

 

1.         This petition puts to the test the question of the Rabbinical Court's authority to adjudicate a property dispute between a couple after the divorce proceeding between them has been completed, and it focuses on an alleged breach of the divorce agreement by one member of the couple. Is the matter within the jurisdiction of the Rabbinical Court or is it within the power of the civil judicial instance; and if the Rabbinical Court does indeed have authority to adjudicate the matter, what is the source of the authority and from where does this authority derive? Is it from the law; is it from the parties' agreement in arbitration or otherwise? And what is the nature of this authority?

 

2.         The petition concerns the petitioner's motion to vacate the decisions of the Great Rabbinical Court in Jerusalem – the first respondent – of May 4 and June 9, 2003, which dismissed the petitioner's appeal against the judgment of the Regional Rabbinical Court of Jerusalem – the second respondent – of May 27, 2002, and its decisions of March 5, 2001 and June 18, 2002.

 

Background and Proceedings

 

3.         The petitioner and the third respondent (hereinafter: “the respondent") were married in 1980 and have three children. Their relationship became unstable and they motioned the Regional Rabbinical Court of Jerusalem in 1992 in order to arrange for divorce proceedings. As part of that proceeding, the couple requested the Regional Rabbinical Court to approve a divorce agreement that they had made. In the agreement, the couple agreed on the act of divorce, the custody and support of the children, and various financial and property arrangements, as follows: the three children would be in the custody of the wife until reaching the age of 18 (clause 3); the husband would pay child support in the sum of NIS 1,000 per month for all three of the children until they reach the age of 18; the sum of the child support as set in the agreement would not be increased, and in exchange, the husband would transfer his share of the couple’s apartment to the wife, including his share of the apartment’s contents and the gold objects, ownership of which would all be transferred to the wife (clauses 4(a) and (b)); the husband also undertook to discharge the balance of the mortgage loan each month (clause 6(c)). The agreement also included a condition whereby the wife undertook not to sue the husband in any court for an increase in child support, either directly or indirectly, and if the husband were sued, the wife would compensate him in such a way that he would receive half of the apartment, half of its contents and half of the gold (clauses 4 and 5 the agreement). Taking out a stay of exit order inhibiting the husband's departure from the country would also be deemed a breach of the agreement and lead to the same result (clause 13). In order to secure the wife's obligation in accordance with the agreement, a cautionary note would be registered against the apartment, pursuant whereto one half of the apartment would be transferred into the husband's name if he were sued to increase child support. The relevant provisions of the agreement are as follows:

 

                        "4.       Child Support

 

                                    (e)       For the avoidance of doubt and without prejudice to the generality of the aforegoing, child support under the agreement shall unequivocally cover all the children's needs without exception… until the children reach the age of 18.

 

                                    The mother undertakes not to sue the father in any legal instance for an increase in child support or for the satisfaction of any of the children's needs without exception beyond what the father has undertaken in this agreement, either directly (herself) or indirectly (through any institution, entity, authority, person and/or in the name of the minor and/or anyone who now and/or in future has an interest), and if the husband is sued, the wife shall compensate him and he shall receive one half of the apartment, one half of its contents and one half of the gold. The obligation is in perpetuity.

 

                                    …

 

                        5.         Indemnification

 

                                    (a)       The mother undertakes and takes it upon herself not to sue the father in any legal instance whatsoever for an increase in child support or for the satisfaction of any of the children's needs without exception beyond what the father has undertaken in this agreement, either directly (herself) or indirectly (through any institution, entity, authority, person and/or in the name of the minor and/or anyone who now and/or in future has an interest).

 

                                    (b)       If, contrary to the abovementioned, the father is sued for an increase in child support and/or satisfaction of any of the children's needs, whether the lawsuit is brought by the mother and/or the mother in the name of the children or by an entity, authority, institution and/or anyone who now and/or in future has an interest, beyond what the father has undertaken in this agreement, then the mother undertakes to transfer one half of the apartment into the father's name and one half of its contents and one half of the gold. The obligation is in perpetuity.

 

                                    (c)       To secure the wife's obligations in this agreement, a cautionary note shall be registered, pursuant whereto one half of the apartment shall be transferred into the husband's name if the husband is sued to increase child support…"

 

            The agreement also includes a provision with regard to the exclusivity of the Rabbinical Court's jurisdiction in the event of a dispute between them after the divorce, in the following terms:

 

                        "9.       Cancellation of Mutual Claims And/or Complaints

 

                        …

 

                        10.       …

 

                        11.       If after the divorce, differences arise between the couple, they undertake to file the lawsuit solely in the Rabbinical Courts.

 

                        12.       …

 

                        13.       The wife undertakes not to take out a stay of exit order preventing the husband's departure from the country, and taking out such an order shall constitute a breach of this agreement, and the husband shall be entitled to obtain one half of the value of the apartment, of the contents and of the gold.

 

                        …"

 

            The divorce agreement was given the effect of judgement by the Rabbinical Court, and on May 26, 1992 the couple was divorced.

 

4.         About five years later, in June 1997, the couple's children (through the petitioner) filed a child support motion against the respondent in the Jerusalem Family Court (FC 10330/97). The motion was mainly intended to increase the child support upon which the couple had agreed in the Rabbinical Court to NIS 6,700. This was, inter alia, due to the petitioner's claim that the respondent was not paying the mortgage payments as undertaken by him in the divorce agreement. In the answer of defense, the respondent defended the claim on its merits. According to him, he was living off a general disability pension of NIS 1,200 per month, from which he was paying child support. The Family Court (per Judge N. Mimon) held in its judgement that the children's monthly support should be increased to a total of NIS 2,000 for both minor children together, and the sum of NIS 500 for the other child until his enlistment to the IDF; with respect to the minors, it was further held that from the time they reached the age of 18 until they completed their service in the IDF, the child support for them would be reduced by NIS 700, and upon completion of their military service the liability for their support will be terminated; if they do not enlist, the liability for them would be terminated when they reach the age of 18. With regard to the other child, upon his enlistment to the IDF and until his discharge, support of NIS 300 would be payable for him.

 

            On September 20, 1997, about three months after the motion to increase child support was filed in the civil court, the respondent filed a motion in the Regional Rabbinical Court of Jerusalem "for a declaratory judgement and specific performance" of the divorce agreement. In the motion, he pleaded that the petitioner had breached the divorce agreement several times and in several different aspects, as follows:

 

                        "8        (a)       The defendant (the petitioner – AP) filed a motion to increase child support in the name of the minors before this Honorable Court on February 28, 1993 – a motion that was dismissed by the Court

 

                                    (b)       The defendant filed another motion on November 6, 1994 and at the end of that motion the wife again applied for an increase in child support.

 

                                    (c)       The defendant motioned for a stay of exit order that was cancelled on July 21, 1997.

 

                        9.         (a)       The defendant went further, and when she saw that her motions were being dismissed by the Honorable Rabbinical Court, she  filed a motion to increase the child support in the name of the minors in FC 10330/97 in the Jerusalem Family Court.…

 

                                    (b)       As part of the motion in Family Court, the wife applied for a stay of exit order that the Court approved.

 

                                    (c)       Moreover, at about the time she filed the motion, the defendant filed a motion for a stay of exit order on July 22, 1997, after the previous order inhibiting departure from the country had been set aside, and the Chief Execution Officer approved it".

 

            He pleaded that the wife had therefore breached clauses 5 and 13 of the divorce agreement. On the basis thereof, the respondent sued the wife for one half of the apartment and its contents and one half of the gold.

 

5.         After filing his motion to the Regional Rabbinical Court, the respondent traveled abroad for more than two years and abandoned his motion. After returning to Israel, he renewed the motion in the Rabbinical Court. The petitioner pleaded in her defense, that the subject of the motion was " breach of a divorce agreement" and according to the law laid down in HCJ 6103/93 Sima Levy v. The Great Rabbinical Court in Jerusalem, PD 48(4) 591 (hereinafter: "Sima Levy Case") the Rabbinical Court did not have jurisdiction to adjudicate the motion. As for the merits of the motion, the petitioner argued that the respondent had come to court with unclean hands because he had breached the divorce agreement by not paying the mortgage payments as he had undertaken in the divorce agreement. The Regional Rabbinical Court, in its decision of February 25, 2001, referred the issue of jurisdiction raised by the petitioner to the Rabbinical Courts' then legal counsel on rabbinical jurisdiction, Adv. E. Roth, for his opinion.

 

            During the same month (February 2001) the petitioner filed a lawsuit in the Jerusalem Family Court against the respondent for "declaratory judgement as to the revocation of the indemnity provision in the divorce agreement" (FC 10331/97). This was based, inter alia, on the argument that the respondent breached the divorce agreement by not paying the mortgage payments as he had undertaken in the divorce agreement. The petitioner further requested that the Court declare the revocation of clauses 11 and 13 of the divorce agreement, pleading that they were "contrary to public policy and the law". The respondent argued in his defense that the claim should be summarily dismissed due to the proceedings conducted on the same issues in the Rabbinical Court.

 

            On March 4, 2001, and before the Family Court had awarded its decision on the respondent's motion for the summary dismissal of the petitioner's claim, the opinion of the legal counsel on rabbinical jurisdiction, Adv. Roth, was filed in the Rabbinical Court. In his opinion, with reference to clause 5(b) of the divorce agreement, the Rabbinical Court did not have jurisdiction to adjudicate the respondent's motion after the divorce. Nevertheless, he believed that clause 11 of the divorce agreement could be treated as an arbitration clause in accordance with the Arbitration Law, 5728-1968 (hereinafter: "the Arbitration Law"). By virtue of the rules of arbitration, the Rabbinical Court is empowered to adjudicate the suit as an arbitrator in accordance with the rules and restraints governing an arbitrator. He further added that, in his opinion, it was unnecessary for the couple to sign an arbitration deed, since clause 11 of the divorce agreement constituted an arbitration deed in all respects.

 

            Following the opinion of the legal counsel, Adv. Roth, the Regional Rabbinical Court decided on March 5, 2001 that it was vested with jurisdiction to adjudicate the respondent's suit "since in the Court's opinion clause 11 constitutes an arbitration deed".

 

            On May 14, 2002, and before the Regional Rabbinical Court's judgement had been awarded in the respondent's suit, the Family Court awarded its decision in the respondent's motion for the summary dismissal of the petitioner's suit. It reviewed the question of the Rabbinical Court's jurisdiction to try the respondent's claim, whether as a court empowered by virtue of statute or as an arbitrator, but it decided to stay the award of its decision on jurisdiction on the ground that:

 

                        "Mutual respect of legal instances requires that after a decision has been awarded by the Rabbinical Court holding that it has jurisdiction to adjudicate the suit that has been filed with it as an arbitrator, the award of a decision on jurisdiction should be stayed until the proceedings in respect of jurisdiction have been exhausted by the plaintiff, who will perhaps wish to act by applying on appeal to the Great Rabbinical Court or by applying to the High Court of Justice to clarify whether her position with regard to jurisdiction will be allowed, or even by motioning to vacate an arbitral judgment as provided in section 24 of the Arbitration Law…"

 

            On May 27, 2002, the Regional Rabbinical Court awarded its judgement in the respondent's motion. The court was divided in its opinion between the three judges, and the decision was made, in the words of the judgement, in accordance with –

 

                        "the third opinion, which was the decisive one of the three, since there are several doubts regarding the interpretation of the agreement, and there is a doubt as to whether it constitutes a breach according to Halachic authorities and the circumstances. Therefore, the case should be decided according to the law, and if the apartment has already been transferred into the wife's name, it is not possible to take away her ownership of the apartment because of a doubt, and of course the wife is liable to comply with all of the obligations in the divorce agreement.... If the apartment has not yet been transferred, it is not possible to order the plaintiff ... to transfer his share of the apartment into the wife's name ....

If the plaintiff has already signed a power of attorney and delivered it to the wife, it would appear that the wife cannot be precluded from exercising the power of attorney in order to transfer the plaintiff's share of the apartment into the wife's name…. On the other hand, if the husband still needs to sign transfer documents and the like, he should not be made to help transfer the dwelling into the wife's name in any way whatsoever….

With regards to the gold objects that the wife has received, it would also appear that she cannot be made to return them to the husband because they are in her possession and in this way her possession is valid…"

 

            As mentioned above, according to the Rabbinical Court's decision of March 5, 2001 it decided the respondent's suit as an arbitrator, but on June 18, 2002 it awarded another decision that was headed "Clarification", according to which:

 

                        "The Rabbinical Court makes it clear that it was the Rabbinical Court that approved the agreement and that there was an undertaking that all matters involved in the agreement would be tried solely by the Rabbinical Court. Therefore, since both parties undertook in the agreement, and the Rabbinical Court also approved the agreement, the Rabbinical Court consequently has jurisdiction to hear and adjudicate the matter, and the Rabbinical Court awarded the judgement by virtue of its jurisdiction, and there was no need for the Rabbinical Court to adjudicate the same as arbitrator, and although the Rabbinical Court could also adjudicate the matter as an arbitrator, the Rabbinical Court also had jurisdiction to try the matter as an adjudicating court in accordance with the aforegoing".

 

6.         The petitioner appealed to the Great Rabbinical Court against the Regional Rabbinical Court's judgement of May 27, 2002. Her main plea in the appeal was that the Regional Rabbinical Court did not have jurisdiction to adjudicate the respondent's suit, either as a competent court by virtue of the law or as an arbitrator, and its judgement is therefore void. As to the actual merits, she argued that the Regional Rabbinical Court had made an error "of judgement" and "disregarded facts" by not giving proper weight to the fact that it was the respondent who was in breach of the divorce agreement by not making the mortgage payments as he had undertaken in the divorce agreement. Consequently, on that ground too, on the merits of the case, the Regional Rabbinical Court's judgement should be vacated. The respondent also appealed to the Great Rabbinical Court against the said judgement.

 

            The Great Rabbinical Court, in its decision of May 4, 2003, dismissed the petitioner's appeal with respect to jurisdiction and held that the interpretation of the divorce agreement indicated that it concerned the couple's agreement for "property in consideration for child support". That interpretation affects the substance of the complaint that the respondent filed to the Rabbinical Court, and it demonstrates that it is a suit to revoke the divorce agreement as opposed to a motion for the enforcement of an indemnity provision. That being the case, the Rabbinical Court had jurisdiction to adjudicate the respondent's motion by virtue of its original (primary) authority because "indemnification was not involved, but property and child support and the connection between them, and those matters of property division and child support are certainly matters of personal status that are governed by section 9 of the Rabbinical Courts Jurisdiction Law". The Rabbinical Court was also vested with original (primary) jurisdiction to adjudicate the suit in view of clause 11 of the divorce agreement, which provides that if differences arise between the petitioner and the respondent after the divorce, the two undertake to file the motion solely to the Rabbinical Courts. The Rabbinical Court mentions that at the hearing, the respondent also pleaded avoidance of the Get and the divorce because according to him the Get had been given by mistake. Consequently, on that ground too, the Rabbinical Court had original (primary) jurisdiction to adjudicate the claim. According to the Rabbinical Court, it also had jurisdiction by virtue of its "continuing" jurisdiction, because the respondent was "applying expressly for the revocation of the property arrangement as a result of a change in circumstances concerning child support". Finally, the Great Rabbinical Court held that the jurisdiction to adjudicate the respondent's suit was vested in the Regional Rabbinical Court, when "the jurisdiction is the essential jurisdiction vested in the Rabbinical Court, rather than jurisdiction by virtue of the Arbitration Law". The Great Rabbinical Court adjourned the deliberation on the appeal itself to a later date.

 

            On June 9, 2003 the Great Rabbinical Court awarded another decision, this time with regard to the respondent's appeal against the Regional Rabbinical Court's judgement. In its decision, the Great Rabbinical Court ordered the matter to be remitted to the Regional Rabbinical Court for it to try the argument, which had not been tried in the Regional Rabbinical Court, that the petitioner had breached the divorce agreement by suing for increased child support in the Regional Rabbinical Court in 1993.

 

The Petition

 

7.         In her petition before us, the petitioner seeks to set aside the decisions of the Great Rabbinical Court and the Regional Rabbinical Court, according to which the Rabbinical Court had jurisdiction to adjudicate the respondent's motion, both as original (primary) jurisdiction and by virtue of an arbitration clause.

 

            This Court issued an order nisi in the petition.

 

The Parties' Arguments

 

8.         The petitioner's essential argument in her petition herein is that the Rabbinical Court lacks jurisdiction to adjudicate the property dispute that has arisen between her and the respondent in respect of the divorce agreement that was made between them. According to her, the Rabbinical Courts are not vested with original (primary) jurisdiction to adjudicate the suit. Moreover, they do not have continuing jurisdiction to hear the respondent's suit. The respondent's motion to obtain one half of the property, which was transferred to the wife, is based on the cause of enforcing an indemnity provision in the divorce agreement. This cause is based on a plea of breach, if one occurred, after the divorce agreement was made and the judgement of the Rabbinical Court giving it force and effect was awarded, and after the couple had been duly divorced. A subsequent breach of the divorce agreement in respect of property after the parties' divorce cannot be bound in retrospect with the divorce agreement and the judgment that materialized in the past. From the divorce and onwards, motions that relate to the breach of the divorce agreement are not a part of matters of personal status. The Rabbinical Court therefore lacks jurisdiction to adjudicate them, and jurisdiction in respect of them is vested in the civil court. Moreover, it was argued that the respondent himself breached the divorce agreement by not paying the mortgage payments as he had undertaken to do in the divorce agreement. His breach of the agreement has civil-financial character, which also demonstrates that his suit after the divorce is subject to the jurisdiction of the civil, rather than religious, court. The petitioner further pleads that clause 11 of the divorce agreement does not amount to an arbitration clause and does not purport to establish an agreement for arbitration. Instead, its wording and contents merely demonstrate its determination, by agreement of the parties, to which court the couple's motions after the divorce should be filed. This agreement, per se, does not vest jurisdiction in the Rabbinical Court. In view of all of this, and based on other grounds too, upon which we shall not focus, the Rabbinical Courts' decisions on jurisdiction are void.

 

9.         The respondent's position in his petition is that the Rabbinical Court is vested with jurisdiction to adjudicate the suit he filed to it. In this respect, he relies on the provision of the divorce agreement, according to which the parties expressly agreed to vest the Rabbinical Court with jurisdiction to try any future dispute between them concerning the agreement. He pleads that, according to case law, a matter that can be bound from the outset with the divorce suit, such as property matters, and it was agreed in the divorce arrangement to vest jurisdiction in the Rabbinical Court in respect to them, is also within its jurisdiction after the divorce. He further asserted that the meaning of the cause of the action that he filed was the revocation of a conditional undertaking given under the agreement, as opposed to the enforcement of a contractual indemnification arrangement. That is to say that the respondent entered into a conditional undertaking to transfer property to the petitioner in consideration for the child support being set in a binding amount and not being increased, and for motions not to be brought in this matter. Since that condition had not been fulfilled, the property undertaking that he had given is void. A contractual indemnification provision is not to be treated in the same way as a conditional property undertaking, with regard to which the Rabbinical Court has continuing jurisdiction even after the divorce. Alternatively, it is argued, the Rabbinical Court has jurisdiction to entertain the respondent's suit according to the law of arbitration, by virtue of clause 11 of the divorce agreement, which constitutes an arbitration agreement, even if the word "arbitration" is not mentioned in it.

 

Judgment

 

10.       This Court's intervention in the decisions of religious courts is limited to extreme cases of ultra vires, infringement of the principles of natural justice, departure from the provisions of law aimed at the religious court or when equitable relief is necessary where the matter is not within the jurisdiction of another court or tribunal (sections 15(c) and (d)(4) of the Basic Law: the Judiciary; HCJ 323/81 Vilozni v. The Great Rabbinical Court, PD 36(2) 733; HCJ 1689/90 E'asi v. The Sharia Court, PD 45(5) 148, 154-155; HCJ 1842/92 Blaugrund v. The Great Rabbinical Court PD 46(3) 423, 438; HCJ 5182/93 Levy v. The Rehovot Regional Court PD 48(3) 1, 6-8).

 

            The subject matter of the petition herein justifies this Court's entertaining the matter on grounds of the Rabbinical Court's exceeding the jurisdiction vested in it for the reasons explained below.

 

The Question

 

11.       The couple signed a divorce agreement containing property and child support arrangements. In the scope of the property arrangements, they agreed to limit and not increase child support. They added a condition according to which if motions to increase child support were filed by the wife, directly or indirectly, or if she took out stay of exit orders, these actions would have certain property consequences. The parties further agreed that if differences arose between the couple after the divorce, they undertook to conduct the claims solely in the Rabbinical Courts. Indeed, after the divorce, disputes did arise between the parties following motions to increase child support that were brought against the husband, and stay of exit orders were taken out. Further thereto, the husband filed a suit in the Rabbinical Court claiming a breach of the divorce agreement by the wife and requesting to receive one half of the property because of that breach. In those circumstances, after the couple's divorce, is the Rabbinical Court vested with jurisdiction to adjudicate the husband's property suit, which is based on an alleged breach of the divorce agreement by the wife? Or is the exclusive jurisdiction to deliberate and adjudicate that claim vested in the civil court?

 

            The subsidiary questions that are to be decided can be divided into two:

 

            First is whether the Rabbinical Court has jurisdiction by virtue of the law to adjudicate a property claim based on a breach of the divorce agreement after the divorce has been completed, by virtue of one of the following:

 

            (a)       Original-primary jurisdiction by virtue of statute to hear and adjudicate issues pertaining to the divorce;

 

            (b)       the Court's "ancillary" jurisdiction to adjudicate matters connected with the divorce after its completion, as interpreted and expanded by case law.

 

            The Second is whether the Rabbinical Court has jurisdiction to decide a property claim based on the breach of a divorce agreement by virtue of the parties' agreement, and what legal significance is to be given to this agreement.

 

            We shall consider these questions.

 

The Starting Point

 

12.       The starting point underlying the analysis of the Rabbinical Court's scope of jurisdiction is based on several fundamental assumptions:

 

            First, the Rabbinical Court is a state judicial instance, which was established by virtue of the Rabbinical Courts Jurisdiction (Marriage and Divorce) Law, 5713-1953 (hereinafter: "the Rabbinical Courts Jurisdiction Law"), and it derives its power and jurisdiction therefrom. As such a state judicial instance, the bounds of the Rabbinical Court's powers are defined and fashioned in accordance with the state law.

 

            Second, every state judicial instance, including the religious court, has merely those jurisdictions that the state law has granted it; it is the statute that established it, and it is the one that defined its powers and assigned them to it. In doing so, the statute assumed, as part of the basic concept of democratic government, that in the granting of judicial powers also lay judicial limitations. Anything that has not been granted to the judicial instance is outside and beyond its power, and it must not surpass its acknowledged boundaries and into areas that have not been entrusted to it and go beyond its responsibility. That is the principle of legality that characterises the structure of democratic government, upon which rests the perception of the status of the government authorities, including the courts. It is on the basis of this principle that the realm of jurisdiction that is vested in the state judicial instances, of which the Rabbinical Courts form part, extends.

 

            Third, the definition of the judicial powers of the various different courts, including the Rabbinical Courts, derives from statute, and statute is subject to interpretation by case law. The case law's interpretation of the extent of the powers vested in the judicial instance is intertwined with the provisions of the statute as the primary source of the power vested in the judicial instance, and it is intended to serve its purpose. In reviewing the boundaries of the religious court's power we shall therefore assume that the religious court is vested with the powers that have been granted to it by the statute, as they have been interpreted by case law, and it has only what the law has given it. As the Court stated (per Justice Landau) in HCJ 26/51 Menashe v. The Chairman and Members of the Rabbinical Court in Jerusalem, PD 5 714, 719:

 

                        "The Rabbinical Courts of our country exist in accordance with the general law, which determines their place in the state courts system, and the questions relating to the spheres of their jurisdiction should generally be resolved in accordance with the same principles as govern other courts".

 

            This is what distinguishes Rabbinical Courts from arbitrators, internal tribunals and voluntary tribunals, which are not established by virtue of statute but mainly by virtue of contract or regulations, and the scope of their jurisdiction is determined pursuant thereto. These entities are essentially governed by the principles of the private law that creates them and they are not part of the country's state judicial system.

 

            As Justice Zamir stated in HCJ 3269/95 Yosef Katz v. The Jerusalem Regional Rabbinical Court, PD 50(4) 590, 602:

 

                        "The Rabbinical Court is established by virtue of statute and its jurisdiction derives from the statute. Its budget comes from the State Treasury and its judges receive salaries like state employees; it sits in judgement beneath the symbol of the State and it writes its judgements on State paper; the orders that it issues speak in the name of the State and are enforced by the State. The Rabbinical Court is not a private entity but a state institution. It is therefore subject to public law and review by the High Court of Justice. Amongst other things, the Rabbinical Court is obliged to respect and observe the fundamental principle that governs every government agency, namely the principle of legality. According to that principle, the Rabbinical Court has nothing other than the power granted to it in accordance with the statute" (emphasis added).

 

            In this respect Justice Cheshin stated in the Sima Levy Case (ibid, p. 616):

 

                        "The legal system takes a grave view of a judicial entity acting beyond the bounds set for it by the law; hence, the case law holds that a lack of subject matter jurisdiction plea stands out and the court will consider it at any stage of the litigation, even where a party first raises it on appeal".

 

            (See also HCJ 816/98 Eminoff v. Eltalaff, PD 52(2) 769, 796-7; HCJ 512/81 The Hebrew University Archaeology Institute v. The Minister of Education, PD 35(4) 533, 543-4; HCJ 30/76, MF 150/76 Siho v. The Karaite Jewish Community Religious Court, PD 31(1) 15, 17-18.)

 

            The state judicial system, and its various different courts, both civil and religious, is built on common norms that govern all its agencies. Thus, for example, it has been held in the past that the fundamental principles that govern civil judges also apply to rabbinical judges. The rabbinical judge, like the civil judge, is part of the judicial authority and in his position he is subject to the same basic rules as obligate any judicial officer:

 

                        "He is not an arbitrator between parties who voluntarily apply to him. He operates by virtue of state law and his authority extends over the whole public with all its diversity, opinions and views. Like a civil judge, a rabbinical judge enjoys independence in matters of judgement. The laws concerning conditions of service, immunity, appointment, discipline and the like that govern the rabbinical judge are very similar to those that govern a civil judge. Like the civil judge, so too the rabbinical judge must, by his action, ensure the public's trust in his judgement. The public is not only the religious public. The rabbinical judge deals with the whole people and he must by his conduct ensure the trust of the whole people, both secular and religious". (Per Justice Barak in HCJ 732/84 MK Tzaban v. The Minister of Religious Affairs, PD 40(4) 141, para. 16.)

 

            In this context, case law has also drawn a clear distinction between a person's fitness as a rabbinical judge of the Israeli Rabbinical Court and his fitness as a community rabbi. On enactment of the Dayanim (rabbinical judges) Law a clear separation was created between judicial and rabbinic functions, and a mix between the two in judicial work is no longer consistent with the concept of state law. In the words of the Minister of Religious Affairs Warhaftig, when he presented the Dayanim Law draft on first reading in the Knesset, as cited in the Tzaban Case:

 

                        "With the establishment of the State of Israel we adopted this course. We distinguished between those functions and separated between rabbis and rabbinical judges" (Knesset Proceedings Session 5457, 1954, p. 2182).

 

 

 

            As Justice Goldberg added on this subject in the Tzaban Case:

 

                        "The main power of the Rabbinate rests in its traditional authority over those who come 'to seek God', whilst the rabbinical judges' authority when sitting in judgement does not depend on the wishes of the litigants but is enforced in the context of the judicial system prescribed for it by the legislature. In this sphere, the rabbinical judges perform the function of 'judging the people', with its varied opinions and views".

 

 

            The religious function of the rabbinical judge as rabbi is not intertwined with the judicial function that he performs as a rabbinical judge and is separate from it. The Rabbinical Court cannot therefore rely on its religious power in order to assume jurisdiction in a matter that exceeds its powers and authorities in accordance with state law (Schiffman, Family Law in Israel, 5755, Vol. I, p. 42).

 

            Against this background there is difficulty with the argument that is sometimes made that the Rabbinical Court might perform a dual function: on the one hand, a state judicial function imposed upon it by virtue of state law, and on the other hand, a religious court in monetary matters by virtue of the parties' agreement. Like any public entity that performs a function in accordance with the law, so the Rabbinical Courts, which operate by virtue of statute must also discharge the responsibility owed by them by virtue of statute and decide the matters entrusted to them. As part of the state judicial system, they possess only the jurisdiction that the statute has placed in their hands. That is the essence of the principle of legality that underlies public administration and the judicial system (Katz Case, ibid, p. 607); hence, even if Jewish law and tradition permit a Rabbinical Court to adjudicate and decide disputes in a certain manner, that does not suffice to authorize it to do so because "the Rabbinical Court, as a state institution, must act within the authority vested in it by state law" (Katz Case, ibid, p. 607). To the same extent, a civil court, which is part of the judicial authority, may not assume an authority or function that does not derive from state law (Tzaban Case, ibid, p. 152).

 

            It is against this background that we shall examine the question of the Rabbinical Court's jurisdiction to decide the respondent's property suit against the petitioner based on a breach of the divorce agreement, and the relief deriving therefrom. A comprehensive analysis of the issue of jurisdiction in a similar context can be found in the judgement of Justice Cheshin in the Sima Levy Case and it will guide and direct us.

 

The Rabbinical Court's Original – Primary Jurisdiction

 

13.       The original primary powers of the Rabbinical Court were set in the Rabbinical Courts Jurisdiction Law and they are built on two tiers: exclusive powers by virtue of the statute; and parallel powers of the civil court and the Rabbinical Court that are vested by virtue of the parties' agreement. The exclusive powers comprise matters of marriage and divorce, as well as matters that are duly bound up in the motion for divorce, including wife and child support. Parallel jurisdiction that is vested by agreement relates to matters of personal status in accordance with article 51 of the Palestine Orders in Council and the Succession Ordinance. The relevant provisions are as follows:

 

                        "1.       Jurisdiction in matters of marriage and divorce

 

                        Matters of marriage and divorce of Jews in Israel, nationals or residents of the State, shall be under the exclusive jurisdiction of rabbinical courts.

 

                        …

 

                        3.         Jurisdiction in matters incidental to divorce

 

                        Where a suit for divorce between Jews has been filed in a rabbinical court, whether by the wife or by the husband, a rabbinical court shall have exclusive jurisdiction in any matter connected with such suit, including support for the wife and for the children of the couple.

 

                        …

 

9.         Jurisdiction by consent

 

In matters of personal status of Jews, as specified in article 51 of the Palestine Orders in Council, 1922 to 1947, or in the Succession Ordinance, in which a rabbinical court does not have exclusive jurisdiction under this Law, a rabbinical court shall have jurisdiction after all parties concerned have expressed their consent thereto."

 

The Rabbinical Court's powers – both the exclusive ones (marriage, divorce and matters bound with divorce) and the jurisdiction in accordance with the parties' agreement in matters of personal status – are original-primary powers by virtue of the statute to hear and rule on the matters that fall within the scope of those powers.

 

Power Ancillary to Original Jurisdiction

14.       The Case law has recognized the existence of a judicial instance's inherent ancillary power that derives from the original power of the Rabbinical Court by virtue of the statute and in special circumstances grants it jurisdiction to again hear a matter upon which it has ruled in the past. Such is, for example, the jurisdiction of the civil and religious courts to vacate a judgement awarded by them that is based on an agreement between the parties, in the making of which there has been a defect. Such a material defect might lead to the revocation of the agreement and therefore also to revocation of the judgment that rests upon it, and the instance empowered to decide its revocation is the one that rendered the judgment (HCJ 124/59 Glaubhardt v. The Haifa Regional Rabbinical Court, PD 13 1490; CA 151/87 Artzi Investment Co. v. Rachmani PD 43(3) 489, 498-500). Additional expression of such ancillary jurisdiction occurs when there is a material change in the circumstances of the matter, that has occurred after the award of judgement by consent, which makes its continued performance unjust (Sima Levy Case, ibid, pp. 605-6; CA 442/83 Kam v. Kam PD 38(1) 767, 771; CA 116/82 Livnat v. Tolidano PD 39(2) 729, 732; CA 219/87 Rachmani v. Shemesh Hadar, Building Company Ltd et al. PD 43(3) 489, 498-500). The recognition of this ancillary jurisdiction is intended to bring about a proper balance between the judgment’s finality on the one hand, and the interest not to leave in effect a judgment, the enforcement of which has become extremely unjust due to a change in circumstances. Inherent jurisdiction is also vested in the judicial instance, including the Rabbinical Court, to retain jurisdiction in respect of a matter that is pending before it until the proceedings have been completed. So long as final judgement has not been awarded, jurisdiction continues until the judicial court has completed its work. Once a final, unconditional judgment has been awarded, the work is completed (Sima Levy Case, p. 607; CA 420/54 Ariel v. Leibovitz PD 9 1337; ALA 2919/01 Daniel Oshrovitz v. Yael Lipa (Fried) PD 55(5) 592; J. Zussman, The Civil Procedure (seventh edition, 5755) 550).

One of the expressions of ancillary jurisdiction relates to the existence of the Rabbinical Court's "continuing jurisdiction", the essence of which is that, under certain conditions, where the Rabbinical Court has in the past heard a particular matter, its continuing jurisdiction to hear it again will be recognized. The continuing jurisdiction also derives from the inherent power of the judicial instance. Its basic purpose is to give expression to the duty of mutual respect and the need for harmony between judicial instances where there is parallel jurisdiction between them, and in order to avoid parties running from one judicial instance to another. It has nevertheless already been explained that continuing jurisdiction is not intended to undermine or derogate from the original powers vested in the judicial instances in accordance with statute. Its purpose is essentially "to vest power to vacate or modify an earlier decision due to a change that has occurred in the circumstances upon which the first decision was based" (per Justice Cheshin in the Sima Levy Case, ibid, p. 608, 610). Such are matters of child support and custody, which by their nature are subject to material changes of circumstance, and the original judicial instance therefore has inherent jurisdiction to reconsider them when the appropriate conditions arise.

It should be made clear that no inherent power has been recognized for a civil or religious court to exercise its original authority again in order to interpret a judgement awarded by it. Hence, a Rabbinical Court that has granted a divorce does not have inherent jurisdiction to interpret the divorce agreement and the judgement that awarded it force and effect (Sima Levy Case, ibid, pp. 612-13).

These are the characteristics of the original jurisdiction that is vested in the Rabbinical Court in accordance with the statute, alongside its ancillary powers that are sparingly exercised in special circumstances by virtue of its inherent jurisdiction, in order to complete the judicial act and make it a complete and just deed.

We shall now examine the question of whether the Rabbinical Court has jurisdiction to adjudicate a dispute by virtue of the parties' agreement, where such jurisdiction is not set in the statute empowering the Rabbinical Courts, and is not within the scope of the ancillary jurisdiction vested in it.

The Rabbinical Court's Jurisdiction by Virtue of the Parties' Agreement

15.       The parties' agreement to vest jurisdiction in the Rabbinical Court might take on two guises: one, simple agreement to grant the Court jurisdiction in a particular case, regardless of the provisions the Rabbinical Courts Jurisdiction Law; second, agreement intended to empower the Court to hear and rule on a dispute as an arbitrator. Can such agreement by the parties vest power in the Court that is not granted to it by the empowering statute or embodied in its ancillary powers?

The Israeli state judicial system and the various different judicial instances, derive their powers from statute. It is the statute that establishes them, it is what delineates the bounds of their activity and it is what defines the sphere of their subject matter and territorial jurisdiction. This is also the case in respect to the civil judicial instances; and so it is with respect to the special judicial systems, including the courts of Israel's different religious communities. These include the Rabbinical Courts in Israel.

By defining the powers of the various different judicial instances in Israel, the statute intended not only to delineate the function and responsibility of the system and its various different arms. It also sought, at the same time, to deny the power of a judicial instance to hear and adjudicate a matter which it was not charged with by the statute and which is not within its inherent jurisdiction. The definition of the judicial instances' powers has a dual dimension, both positive and negative: it constitutes a source of power and responsibility on the one hand, while denying the exercise of authority and power that have not been so conferred; the judicial instance has only what the statute that established it has vested in it, and insofar as it has been made responsible to adjudicate disputes within the scope of the power vested in it, it is under a duty that derives from the statute and the concept of democratic government not to try or adjudicate a matter that is beyond its statutory power.

A preliminary and mandatory condition for the satisfactory activity of any judicial system is a clear and exhaustive definition of the framework of powers and the apportionment of functions that rest with its various different instances. Without an exhaustive and specific definition of powers the systemic structure, built in accordance with the statute, is blurred and the stability of its functioning is not secured. The harmony necessary in the area of operation of the different judicial arms and the relationship between them is impaired; the allocation of professional, administrative and budgetary resources to the different instances is disrupted, and direct harm might occur to the efficacy of the judicial system and the level of judicial performance. The uniqueness of the responsibility owed by the judge, which requires the existence of a clear framework of authority, alongside which is the responsibility and duty to rule, becomes blurry. Thus, recognizing the power of a judicial instance to adjudicate matters, the power and responsibility for which have not been legally transferred to it, might materially disrupt the internal balance required in the structure of the judicial system and severely undermine its standing and performance.

A consequence of the aforegoing is that the power of a judicial instance, as such, be it civil or religious, is acquired by law and it has no power to be derived from the parties' agreement, except where the statute itself has seen fit to recognize such agreement in certain circumstances as a source of the power to adjudicate. Thus, for example, with regard to the effect of the parties' agreement, the law has distinguished between the apportionment of subject matter jurisdiction and territorial jurisdiction between judicial instances. It is willing to acknowledge, in certain conditions, the parties' agreement as a valid source for changing the territorial jurisdiction that has been prescribed. Section 5 of the Civil Procedure Regulations, 5744-1984 provides that when an agreement between parties as to the place of jurisdiction exists, the lawsuit will be filed to the court in that area of jurisdiction. The relative flexibility regarding territorial jurisdiction, and the willingness to recognize the parties' agreement as the source of such jurisdiction, stems solely from the statute and derives its power from its provisions. That is not the case in respect of subject matter jurisdiction. Generally, the law does not recognize that the parties' agreement has power to depart from the rules of subject matter jurisdiction, as crafted by state legislation.

A similar approach is also taken with regard to the judicial instance's power to adjudicate by way of arbitration. Since the state judicial instance merely has the subject matter jurisdiction conferred to it by statute, it is not vested with power to hear and rule a matter as an arbitrator by virtue of the parties' agreement, unless it has been expressly given that power by statute. In general, a judicial instance is not supposed to adjudicate a matter that is referred to it as arbitrator. However, in certain circumstances, the law has expressly recognized the power of a civil instance to adjudicate a dispute in departure from the ordinary rules of procedure. Thus, for example, in the area of small claims, section 65 of the Courts Law (Consolidated Version), 5744-1984 provides that if a lawsuit has been filed in the small claims court, the judge may, with the parties’ consent, try the claim as arbitrator, and the provisions of the Arbitration Law will govern the matter, with certain restrictions; in addition, a court hearing a civil matter has been empowered, with the parties’ consent, to decide a matter before it by way of settlement (section 79A of the Courts Law) or to refer a matter, with the parties' consent, to arbitration or conciliation (sections 79B and 79C of the Courts Law). The said authorities are all vested in the court by virtue of statute. They assume that the subject of the dispute is within the subject matter jurisdiction of the court hearing the case and they give it special procedural means that are intended to facilitate and expedite the process of deciding the dispute and bringing about a just result. The various judicial instances have not been generally empowered by law to hear and decide matters that are not included in the scope of their subject matter jurisdiction by virtue of the parties' agreement, either as arbitrators or otherwise. Since such authority has not been conferred to them, it is, ipso facto, denied and does not exist.

The Rabbinical Courts are an integral part of the Israeli judicial system. They were established by virtue of the Rabbinical Courts Jurisdiction Law and they derive their power and authorities from the state statute. They have nothing other than what is vested in them by the statute, and they are subject to the set of powers of the statute in their judicial work, as interpreted over the years by case law. Along those lines, this Court has held in the Katz Case that the Rabbinical Court is not empowered to issue a Letter of Refusal in monetary matters that is intended to compel a party to submit to the Rabbinical Court's jurisdiction by ostracizing and disgracing the recalcitrant party; and in HCJ 2222/99 Gabai v The Great Rabbinical Court PD 54(5) 401, the opinion was expressed that the Rabbinical Court lacks legal authority to issue a forced settlement decision, without the parties' consent, thus forcing a judgment on the parties without determining facts on the basis of evidence, if it is unable to decide in accordance with the law.

It emerges from this that the parties' agreement as such cannot, per se, grant jurisdiction to the Rabbinical Court, unless, it has been recognized by the law as a primary source of authority. Thus, the parties' agreement has been recognized as a source of the Rabbinical Court's jurisdiction pursuant to section 9 the Rabbinical Courts Jurisdiction Law, in matters of personal status of Jews pursuant to article 51 of the Palestine Orders in Council or according to the Succession Ordinance, which are within the parallel jurisdiction of the Rabbinical Court and the civil instance. Nevertheless, the Rabbinical Court does not have power to hear and decide a matter that is not of the kind found within its exclusive jurisdiction in accordance with the statute or within its parallel jurisdiction, even if the parties have given their consent to its jurisdiction. Such agreement does not derive from a legally recognized source of authority in the law and it cannot, per se, vest jurisdiction in a state judicial instance.

The Rabbinical Court's Jurisdiction by Virtue of an Arbitration Agreement

16.       According to the same line of reasoning, the Rabbinical Court has no power and authority to decide a dispute as an arbitrator by virtue of an arbitration agreement between the parties in a matter, which by its nature is not within its legal jurisdiction. The Court has not been vested with jurisdiction by law to decide disputes as an arbitrator and the parties' agreement cannot vest it with such power.

The issue of the Rabbinical Court's jurisdiction to arbitrate financial and other matters that go beyond the powers granted to it in accordance with the Rabbinical Courts Jurisdiction Law has caused consternation and confusion over the years. It appears that, in reality, the Rabbinical Court assumes the role of arbitrating matters that are beyond the scope of its subject matter jurisdiction (Katz Case, ibid, pp. 606-8; CA 376/62 Bachar v. Bachar, PD 17(2) 881, 882, 885; CA 688/70 Doar v. Hamami, PD 25(2) 396, 399; M. Alon, Jewish Law – History, Sources and Principles, third edition, vol. III, 5748, 1529). Justice Barak considered the inherent difficulty of a state judicial instance's need to adjudicate a dispute by arbitration where it was not empowered to do so by law, saying:

"The first possible argument is that the motion to the Rabbinical Court is like that to an arbitrator and embodied in the Arbitration Law, 5728-1968. That possibility – which has used in practice and can be encored as a year-long custom - raises serious problems in principle. Thus, for example, it can be asked whether it is proper for a judicial entity, whose powers are prescribed by law, to assume additional judicial powers, by being empowered as an arbitrator. Is it conceivable that parties would motion the magistrate’s court to try a pecuniary claim, that is outside its jurisdiction, as an arbitrator? From the state's point of view, is it justifiable to use judicial time and tools (whether of the civil or religious courts) for matters outside the jurisdiction that the law has granted the judicial authorities? Is there no fear that the public be confused as to which decisions the judicial instance has awarded as the government and those that it has awarded as arbitrator?"

(HCJ 3023/90 Jane Doe (a minor) v. The Rehovot Regional Rabbinical Court PD 45(3) 808, 813-14; see also S. Ottolenghi, Arbitration, Law and Procedure (fourth edition, 5765) 167-8; Schiffman, ibid, vol. I, 37.)

In HCJ 2174/24 Kahati v. The Great Rabbinical Court, PD 50(2) 214, this Court (per Justice Dorner) once again referred to the practice, adopted from time to time by the Rabbinical Courts, of deciding disputes as arbitrators in matters that are not within their jurisdiction. It expressed skepticism with respect to the validity of the practice. However, as in the previous case, it again left this question open without making any conclusive ruling, since such a ruling was not necessary in that case (cf. Aminoff, ibid, pp. 792-3).

17.       There is indeed an inherent difficulty in recognizing the Rabbinical Court's power to decide a dispute in a matter on which it has not been given jurisdiction by law (cf. Ottolenghi, Dispute Resolution by Alternative Means, Israeli Law Yearbook, 5752-5753, p. 535, 550-1). In the past, the Mandate government empowered the Rabbinical Courts to act as arbitrators by means of section 10(d) of the Israel Knesset Regulations of 1927, but upon the establishment of the State, the “Israel Knesset”, within its meaning under the Mandate, ceased to exist and it was held that those Regulations no longer had any force or effect (Crim. App. 427/64 Yair v. The State of Israel PD 19(3) 402; HCJ 3269/95, ibid, p. 622-3; Schiffman, ibid, p. 39). It cannot therefore be argued that the said section might serve as the source of the Rabbinical Courts' power as arbitrators. Moreover, upon enactment of the Arbitration Law, it was proposed that an arbitration decision made by a religious court when ruling as an arbitrator would in all respects, except with regard to the appeal, be treated as a judgement of the court sitting in accordance with its jurisdiction prescribed by statute, and that the award would not require confirmation under the Arbitration Law. That proposal was not accepted (Knesset Proceedings 5728, pp. 2966-7).

It is indeed difficult to settle the governing perception that views the judicial system as an arm of government, which derives its power and authority from statute, while acknowledging the possibility that the selfsame system can acquire other subject matter authorities deriving merely from the parties' agreement that do not originate from the empowering law. The Israeli Rabbinical Courts, that are part of the Israeli judicial system, integrate with the said perception and, like the other judicial instances, operate in accordance with the principle of legality of the arms of government (see the dissenting opinion of Justice Tal in the Katz Case, distinguishing between the power of religious courts as a state authority and the power they have, in his opinion, by virtue of Jewish law, which is not connected with state law).

18.       Apart from the essential difficulty inherent in the judicial decision of the Rabbinical Court as an arbitrator, which is not consistent with the principle of legality of the government authorities, other difficulties arise from the said procedural practice. The practice blurs the spheres of the Court's own activity in respect of the procedural basis upon which its decision rests: is it a decision within the scope of the Court's state power that is subject to review by the High Court of Justice in accordance with section 15 of the Basic Law: the Judiciary, or is it an extra-statutory power that is built on a different foundation originating from the parties' agreement and subject to review by a different judicial instance, like the District Court, in accordance with the Arbitration Law (cf. Jane Doe Case, ibid, para. 7)? In more than a few cases the parties might misunderstand the nature of their agreement to vest jurisdiction in the Rabbinical Court as they do not always understand the meaning and implications of their consent. Moreover, usually, in the course of such adjudication, strict attention is not paid to enquiring into the existence of an arbitration agreement or the application of the Arbitration Law and the rules pursuant thereto, such, for example, the mechanism for the confirmation and revocation of an arbitral award and the role of the District Court as the competent instance in accordance with the Arbitration Law (Ottolenghi, ibid, p. 168; Dichovski, The Standing of a Rabbinical Court Dealing with Property Law As Arbitrator, The Jewish Law Yearbook 16-17 (5750-5751) 527; MF 268/88 Delrahim v. Delrahim, DCJ 49(3) 428; SC 2329/99 Kfir v. Kfir, PD 55(2) 518, para. 5). An arbitral judgment made by the Rabbinical Court frequently does not undergo confirmation or revocation proceedings in the District Court as required by the Arbitration Law for the purpose of its execution, and the Rabbinical Court has no power to confirm an arbitral judgment (Kahati, ibid, p. 220; HCJ 5289/00 Mograbi v. The Great Rabbinical Court, Takdin Elyon 2000(2) 581; Kfir Case, ibid, para. 5). Furthermore, a situation in which the District Court, by virtue of the Arbitration Law, might oversee the Rabbinical Court's decisions as an arbitrator might harm the proper balance between the instances and aggravate the tension between the civil and religious judicial arms (A. Porat, The Rabbinical Court As Arbitrator, Kiriat Mishpat II (5762) 503, 521-4; Dichovski Case, ibid, p. 529).

The Rabbinical Court, purporting to act as an arbitrator between the parties, still operates under cover, and with the characteristics, of its state role. To that end it makes use of the court's physical and organizational system, which is financed by the state; it adjudicates disputes as an arbitrator in the scope of the court calendar, as part of its ordinary work; the overall services, the organizational and professional arrangement and the government budget are also used by it in that function, which by its nature does not have a state character. The time that it should devote to matters of personal status in its official capacity is partly assigned by it to a different judicial function that is not for the state, despite appearing to carry the state seal in the eyes of the public at large, who finds it difficult to distinguish between the judicial function and the extra-statutory function performed by the Court. This intermingling of functions is inconsistent with the principle of legality and a correct definition of the functions and powers of a state judicial instance (Katz Case, ibid, p. 608; Schiffman, ibid, pp. 37-8).

19.       Mention ought to be made to the approach of Prof. Shochatman in his paper entitled The Rabbinical Courts' Jurisdiction in Matters Other Than Personal Status (Bar Ilan University Yearbook on Humanities and Judaism, vols. 28-29 (5761) p. 437, p. 449 et seq.). As he sees it, the Rabbinical Court might acquire jurisdiction by virtue of the parties' agreement in matters outside its jurisdiction in accordance with the Rabbinical Courts Jurisdiction Law by virtue of section 15(d)(4) of the Basic Law: the Judiciary, thereby acquiring jurisdiction as an arbitrator. According to that Law, which defines the High Court of Justice's power to review religious courts, the question of a religious court's jurisdiction can only be referred to this instance when it was raised at the first opportunity. The author infers from this that where there is prior agreement between the parties to vest subject matter jurisdiction in the religious court, a party who has so agreed may not later dispute jurisdiction. By virtue of that preclusion the religious court acquires subject matter jurisdiction, and the High Court of Justice is itself precluded from intervening therein. According to this approach, such an agreement vests subject matter jurisdiction and is not limited solely to matters of personal status. It might encompass numerous spheres that are beyond the subject matter jurisdiction of the religious court, as defined in the Rabbinical Courts Jurisdiction Law.

I cannot agree with this position. The interpretation expressed by Prof. Shochatman assumes that it is possible to recognize the existence of subject matter jurisdiction of an Israel state judicial instance by means of the parties' consent, combined with the doctrine of preclusion and estoppel that prevents someone who has agreed to jurisdiction from later disputing it. That approach is fundamentally inconsistent with the principle of legality that obligates judicial instances, including the religious courts. It is not consistent with the starting point whereby subject matter jurisdiction is vested in a judicial instance by a positive arrangement, and its existence is not to be inferred by an indirect interpretation of provisions of law concerning estoppel and preclusion. The Rabbinical Court's powers are granted to it by virtue of the Rabbinical Courts Jurisdiction Law and they cannot be added to by an indirect interpretation of statutory provisions, the purpose of which is not the vesting of power. Moreover, it has already been held (in Sima Levy Case, ibid, p. 618-19) that the element of preclusion emerging from section 15(d)(4) of the Basic Law: the Judiciary was not intended to vest in the Rabbinical Court subject matter jurisdiction that is not vested in it by virtue of the Rabbinical Courts Jurisdiction Law. The said preclusion is based on the assumption that the matter being adjudicated by the Rabbinical Court is of the type that are within the parallel jurisdiction of the civil court and Rabbinical Court, and regarding the latter, jurisdiction is conclusively consummated if both parties have agreed to it. In those circumstances, and only in them, a party's prior agreement or silence, or subsequent denial of jurisdiction, might lead to preclusion with respect to a lack of jurisdiction argument in the High Court of Justice - that and nothing more. An interpretation that takes the doctrine of preclusion out of context, and assumes the existence of a potentially unlimited Rabbinical Court subject matter jurisdiction, the final consummation of which is dependent only upon the parties' agreement, is directly opposed to the principle of legality, upon which the concept of democratic government is based. It is inconsistent with the subject matter jurisdictions vested by statute in the arms of government, including the judicial system.

Alternative Decision-Making Systems

20.       The need of various different circles in the religious world to entertain alternative systems for the resolution of disputes is proper and recognized. Indeed, alternative rabbinical judicial systems that are not associated with the state rabbinical judicial system, which decide disputes between litigants in the community, are recognized. They can be granted powers to act as arbitrators by agreement of the parties. The need of different communities for alternative dispute resolution systems specific to them can be met by reference to internal arbitration frameworks that are not part of the state judicial system, within which disputes can be settled by virtue of the parties' agreement. This alternative course to litigation in the state judicial instances can be developed and strengthened in accordance with the different needs and preferences of the communities. This was considered by Justice Zamir in the Katz Case (ibid, p. 606), who stated:

"As is known, there are still observant Jews who prefer to litigate in matters of property according to religious law before a religious court rather than the state court. The state's law does not preclude that, if both parties to the dispute so desire, and it is even willing to give the force of arbitration to such litigation, if the litigants fulfil the provisions of the Arbitration Law. Indeed, in practice, such courts exist in various communities around Israel, not by virtue of state law or as official institutions but as private entities. That is, for example, the case of the rabbinical court of the Edah Chareidis [the Haredi Community] in Jerusalem. However… in these cases we are not dealing with a private entity but a state court, and the law applies to it just as any other of the state's courts. Like any court, in fact, like any government agency, the Rabbinical Court is also subject to the principle of legality, meaning that it has nothing other than what was granted to it by the law… In this respect, the Rabbinical Court in Jerusalem is distinguished from the rabbinical court of the Edah Chareidis in Jerusalem. The Israeli Rabbinical Court, which has jurisdiction in accordance with the Basic Law: the Judiciary, is not like one of the rabbinical courts of the Jewish communities in the Diaspora. Unlike them, it has the power and authority of a government institution. So too, unlike them, it is also subject to the restrictions that apply to any government institution".

Consensual Resolution – Looking to the Future and to the Past

21.       The scope of the Rabbinical Courts' subject matter jurisdiction to decide a dispute by virtue of the parties' agreement outside the framework of the law looks to the past and the future. It calls into question the validity of the Court's rulings based on the parties' agreement outside the scope of the statute, not merely henceforth, looking to the future, but also with respect to the past. The outlook to the future seeks to find a binding definition of the limits of the Rabbinical Court's jurisdiction and to strictly observe those limits hereafter. However, the outlook to the past calls into question the binding legal validity of the Rabbinical Court's decisions that have been made over the years by virtue of the parties' agreement as aforesaid. That issue is far from simple; there is no need to decide it here, and it will wait until its time comes.

From the General to the Particular

22.       Let us return to the respondent's suit against the petitioner in the Rabbinical Court and examine whether it is within the subject matter jurisdiction of the Rabbinical Court; the test of jurisdiction depends on the nature of the cause of action, and whether the cause falls within the jurisdiction of the Rabbinical Court.

The Cause of Action – Enforcement of a Contractual Indemnity Clause

23.       The respondent's cause of action in the Rabbinical Court is the enforcement of a contractual clause concerning property, which is contained in the divorce agreement that was made between the couple for the purpose of the divorce proceedings. It provided that if the respondent were sued for an increase in child support and the satisfaction of any of the children's needs or if a stay of exit order was granted at the initiative of the wife, then the petitioner would compensate him, in the language of clause 4(e) of the agreement, with half the property. That provision is also mentioned in clause 5 of the agreement, which is headed "Indemnification", and according to the substance of the provision, and also its location and wording, it is an indemnity clause. The respondent sues for the enforcement of a property condition for his indemnification due to a breach of contract by the wife, and he gave expression thereto by heading his claim as one for "specific performance". That is to say, we have here a property claim for the enforcement of the contractual indemnity clause in a divorce agreement that received the effect of a judgement of the Rabbinical Court and further to which the parties' divorce was completed.

The Rabbinical Court's Jurisdiction to Adjudicate a Property Claim for the Breach of a Contractual Indemnity Clause in a Divorce Agreement after the Parties' Divorce

Does the respondent's suit, according to its cause, fall within the scope of one of the sources of the Rabbinical Court's jurisdiction? Because of the great similarity between the instant matter and the case of Sima Levy, we shall draw guidance and direction from that case.

 

 

Original – Primary Jurisdiction

24.       The source of the Rabbinical Court's exclusive jurisdiction in matters of marriage and divorce, as provided in section 1 of the Rabbinical Courts Jurisdiction Law, does not apply in the instant case because the subject of the suit is a property matter after the dissolution of the parties' marriage and a matter of "marriage and divorce" is, no longer involved. Nor is it a matter "connected with a divorce suit", including support for the wife and children, within the meaning of section 3 of the Law. After divorce, a property claim in respect of the breach of an indemnity clause is not connected with the divorce suit, which has ended and no longer exists. The respondent's cause of action is a new one, the subject of which is the enforcement of a divorce agreement or an application for the enforcement of a divorce judgment, based on a divorce agreement. The cause is based on the breach of a divorce agreement after the award of the divorce and completion of the couple's divorce, and such a new cause is naturally not to be bound up with the matters that were in the past connected with the divorce suit.

With regard to the property cause of action, which surrounds the breach of an indemnity clause of a divorce agreement, the Rabbinical Court does not have jurisdiction by virtue of the parties' agreement pursuant to section 9 of the Law, which deals with the Rabbinical Court's parallel jurisdiction that is vested by virtue of the parties' agreement in matters of personal status according to article 51 of the Palestine Orders in Council and the Succession Ordinance. Section 9 of the Rabbinical Courts Jurisdiction Law raises the question of whether jurisdiction can be vested in the Rabbinical Court by consent in a matter included in its parallel jurisdiction after completion of the divorce, or whether its jurisdiction pursuant to that provision is limited solely to matters within its parallel subject matter jurisdiction that arise in connection with, and until, the divorce and its completion, but not afterwards. Whatever the answer to this question, it is in any event clear that the subject matter jurisdiction pursuant to section 9 is limited solely to the matters mentioned therein, that is, matters of "personal status" as defined in the Palestine Orders in Council and the Succession Ordinance. In a dispute that is not within the bounds of those matters, even the parties' agreement cannot vest jurisdiction in the Rabbinical Court (Schiffman, ibid, vol. I, p. 37; Jane Doe Case, ibid, p. 812). The power of the parties' stipulation is restricted solely to the matters defined by the statute (MF 358/89 Zalotti v. Zalotti PD 43(4) 41, 42; Porat, ibid, p. 510).

Clause 11 of the divorce agreement in this matter looks to the future, and provides that if differences arise between the couple after the divorce, then they undertake to bring their claims solely in the Rabbinical Courts. That agreement is effective only to vest jurisdiction in the Rabbinical Court pursuant to section 9 of the Law in respect of matters of personal status according to article 51 of the Palestine Orders in Council or the Succession Ordinance. A property claim for the enforcement of a contractual indemnity clause in a divorce agreement is not a matter of personal status within the meaning of the Palestine Orders in Council or the Succession Ordinance, and thus, the parties' contractual agreement in respect of such a dispute cannot vest jurisdiction in the Rabbinical Court pursuant to section 9 of the Law.

The Rabbinical Court therefore does not have original jurisdiction to adjudicate the respondent's claim.

"Ancillary" Inherent Jurisdiction

25.       Does the Rabbinical Court have "ancillary" inherent jurisdiction to adjudicate the respondent's claim? The answer is in the negative.

            In the instant case, the Rabbinical Court's ancillary jurisdiction is irrelevant insofar as it relates to the revocation of a divorce award because of a defect in the making of the divorce agreement. It is not a defect of fraud, mistake, deceit, duress or similar that occurred in the making of the agreement and that might have given the Rabbinical Court ancillary jurisdiction to consider its revocation.

            Similarly, the Rabbinical Court has not acquired ancillary jurisdiction by virtue of a material change in circumstances after granting the divorce judgment that allegedly justifies revoking the divorce agreement and the divorce judgment in order to achieve a just result. On the contrary, the respondent's suit is for the specific performance and enforcement of the divorce agreement, not its revocation. Although, in the Great Rabbinical Court, the respondent pleaded that his suit was to revoke the divorce agreement because, according to him, the Get had been given by mistake (the Great Rabbinical Court's decision of May 4, 2003). These arguments were made as an "embellishment" at a late stage of the trial and do not reflect the real cause of action; the motion to revoke the divorce agreement and the act of divorce is inconsistent with the respondent's claim in his suit to compensate him with half the property (the apartment, the contents and the gold), which is nothing other than a claim for the enforcement of the divorce agreement (cf. CA 105/83 Menashe v. Menashe PD 38(4) 635; Yadin, The Contracts (Remedies for Breach of Contract) Law 5731-1970, Second Edition, 5739, p. 44).

            Again, the Rabbinical Court's ancillary jurisdiction to retain jurisdiction in a matter pending before it until the proceedings conducted before it are concluded will not vest it with jurisdiction in this case. The Regional Rabbinical Court had granted a final and unconditional judgment and awarded the effect of judgement to the divorce agreement. Indeed, the divorce agreement does contain an indemnification provision, which by its nature looks to the future, but this fact cannot transform a judgement that gave effect to a divorce agreement into a judgment that is not final, leaving the Rabbinical Court with jurisdiction that has not yet been exhausted to continue adjudicating with respect to the divorce agreement's future performance in this property matter. A financial-property dispute that has arisen between the parties after the award of judgement gives rise to a new cause of action and necessitates the institution of new proceedings in accordance with the jurisdictional framework prescribed by law (see Sima Levy Case, pp. 607-608; CA 468/85 Dondushanski v. Don PD 40(2) 609; D. Bar Ofir, Execution - Proceedings and Law (Sixth Edition, 2005, pp. 164-5)).

            Nor has the Rabbinical Court acquired jurisdiction to hear this matter by virtue of the doctrine of "continuing jurisdiction". It should be kept in mind, that continuing jurisdiction is vested where an instance has tried a particular matter in the past and, in special circumstances, a need has arisen to vacate or modify an earlier decision due to a material change that has occurred in the circumstances upon which the original decision was based such, for example, in matters of child support and custody. The instant case is fundamentally different. The motion does not seek to modify or revoke the divorce agreement made between the parties. On the contrary, it seeks to enforce the agreement, and such a claim has no place within the continuing jurisdiction vested in the Rabbinical Court. A decision on property matters is a final one and not a matter for continuing jurisdiction, as the Court stated in Sima Levy (Justice Cheshin, ibid, p. 611):

                        "As distinct from decisions concerning the payment of support or child custody – which by their nature are not final and the doctrine of continuing jurisdiction applies to them – a decision on a property matter is in principle a final one" (emphasis added).

            The property aspect of the divorce agreement, including the indemnification clause, and the divorce judgment that gave it effect, are therefore not within the Rabbinical Court's continuing jurisdiction.

            And finally, the Rabbinical Court does not have ancillary jurisdiction to adjudicate the new cause that arose following the divorce agreement in order to interpret the agreement. Firstly, the Rabbinical Court, having completed and exhausted its power to rule on the matter of divorce, no longer has ancillary power to interpret the divorce agreement or the divorce judgment (cf. HCJ 897/78 Yigal v. The National Labour Court, PD 33(2) 6, 7; CA 5403/90 The State of Israel v. RAM Revhiat Ibrahim PD 46(3) 459). Moreover, in the instant case, the question of the agreement’s interpretation hasn’t risen as such, but a claim for its enforcement has been brought instead. Hence, the Rabbinical Court does not have ancillary jurisdiction in this respect either.

            In conclusion: the Rabbinical Court does not have primary original jurisdiction, or ancillary inherent jurisdiction, to adjudicate a property claim for enforcement of a contractual indemnification clause in a divorce agreement that has given the effect of judgement, once the couple's divorce has been completed.

The Rabbinical Court's Jurisdiction by Virtue of Consent

26.       As can be recalled, clause 11 of the divorce agreement provides that differences between the couple after the divorce are to be adjudicated solely in the Rabbinical Courts. The couple's agreement as such cannot vest the Rabbinical Court with jurisdiction where there is no legal source for it. The agreement in this case concerns something that is not a matter of personal status according to section 9 of the Rabbinical Courts Jurisdiction Law, and it was therefore given for this purpose outside the scope of the law, and is ineffective.

            Indeed,

                        "where the subject of the litigation is not within the jurisdiction of a particular judicial entity, no agreement in the world has power to grant the entity jurisdiction that the statute has not given it; it is the statute that gives and it is the statute that takes away" (Sima Levy, p. 617).

            The Regional Rabbinical Court's decision of June 18, 2002 and the Great Rabbinical Court's decision of May 4, 2003, according to which the Rabbinical Courts have jurisdiction in principle to try the claim by virtue of the law, are inconsistent with its provisions.

The Rabbinical Court's Jurisdiction by Virtue of an Arbitration Arrangement

27.       It was further argued that clause 11 of the divorce agreement is an arbitration provision that vests the Rabbinical Court with power as an arbitrator to adjudicate the respondent's claim of a breach of the agreement's indemnification provision. Although not strictly necessary, we have considered the question in principle of whether a Rabbinical Court can be empowered to decide a dispute between litigants in arbitration, in a matter that is not within its subject matter jurisdiction according to the statute. We have answered that question in the negative and the answer is applicable to the case herein.

            In the instant case, the conclusion that the Rabbinical Court lacks jurisdiction to try the matter as an arbitrator is also reinforced by another reason. Studying the contents of clause 11 of the divorce agreement shows that it cannot be construed as an arbitration clause, equal to an "arbitration agreement" between the parties. It is well known that the power of an arbitrator to decide a dispute between parties derives from an arbitration agreement. Without an arbitration agreement, no arbitration arises. An "arbitration agreement", according to the Arbitration Law, is "a written agreement (between parties) to refer to arbitration a dispute that arises between them in the future, whether an arbitrator is named in the agreement or not" (section 1 of the Arbitration Law). The condition precedent for arbitration is therefore the existence of an agreement to refer a dispute to arbitration. If parties have agreed to refer disputes between them to the decision of some entity but it is not clear that a decision in arbitration is involved, then there is no arbitration agreement (ALA 4928/92 Aziz Ezra Haj v. Tel Mond Local Council PD 47(5) 94; Ottolenghi, ibid, pp 9-41).

            In this case, the parties undertook to refer any disputes arising between them after the divorce solely to the Rabbinical Courts. No intention can be inferred from that agreement to refer such disputes to the Rabbinical Court qua arbitrator. In Jane Doe (para. 6 of Justice Barak's opinion), as in the case herein, the couple mistakenly believed that their consent to the Rabbinical Court's adjudicating disputes connected with the divorce agreement could vest it with power to decide as a state judicial instance, rather than as an arbitrator. Indeed, the wording and contents of clause 11 of the divorce agreement do not demonstrate the parties' intention to treat it as an arbitration clause purporting to empower the Rabbinical Court to act as arbitrator. Consequently, even if we assumed that the Rabbinical Court could be empowered to act as an arbitrator in matters in which it has no original or ancillary jurisdiction by virtue of the law, there is still no effective arbitration agreement, as pleaded.

A Note before Closing

28.       The issue of the Rabbinical Court's power to adjudicate by virtue of the parties' agreement, outside the scope of the law, has arisen in earlier contexts in the past, and although different opinions have been expressed in such respect by the courts, no binding decision has been necessary in connection therewith. This absence of a ruling has permitted the continuation of a procedural practice that is inconsistent with the organizational structure of the courts and the division of powers between them in accordance with state law. This custom has enabled a judicial practice that is inconsistent with the principle of the administration's legality and the legality of the judicial system. The time has come to move from the stage of expressing an opinion to the stage of making a ruling, which is necessary to ensure the proper function of the judicial system within the scope of its powers, and thereby to protect the basic foundation that defines the boundaries of its activity based on the principle of legality and the rule of law. This will not harm, in a any way, the need and ability of various social groups to entertain alternative resolution systems outside the state judicial instances, based on the principles of arbitration regulated by law or on the basis of other agreed and recognized rules of procedure. However, at the same time, it is necessary to safeguard, and protect against blurring the boundaries between the state judicial systems and alternative resolution systems that are built on the parties' agreement, in order to protect the proper operation of the different arms of the judicial system and the public's confidence in the way in which its powers are exercised and its judgments.

Conclusion

29.       By deciding the respondent's lawsuit against the petitioner for the enforcement of a contractual indemnification clause in the divorce agreement, the Rabbinical Courts exceeded the power vested in them by law. Consequently, the decisions of the Regional Rabbinical Court and the Great Rabbinical Court in the respondent's claim are void. The result is that the order nisi that has been awarded should be made absolute. The respondent shall bear the petitioner's professional fees in the sum of NIS 12,000.

 

Vice President (Ret.) M. Cheshin

 

            I concur.

 

Justice S. Joubran

            I concur.

Therefore, held as stated in the opinion of Justice Procaccia.

Awarded today, this eighth day of Nissan, 5766 (April 6, 2006).

 

___________________	___________________	___________________
Vice President (Ret.)	Justice	Justice

 

LCA 4716/04

Hotels.com

v

1.       Zuz Tourism Ltd

2.       Hotels Online Ltd (formal respondent)

 

 

The Supreme Court sitting as the Court of Civil Appeals

[7 September 2005]

Before Vice-President M. Cheshin and Justices A. Grunis, E. Arbel

 

Application for leave to appeal the decision of the Jerusalem District Court (Judge M. Drori) on 4 April 2004 in CApp (Jer) 1929/02.

 

Facts: The applicant and the first respondent entered into an exclusive marketing agreement in February 2000. This agreement contained an arbitration clause stating that disputes between the parties would be resolved by arbitration which shall take place in Texas. In June 2002, the first respondent filed an action in Israel against the applicant and the second respondent, on the grounds that the second respondent was marketing the services of the applicant contrary to the agreement. The applicant filed a motion for a stay of proceedings on account of the arbitration clause in the agreement. The District Court denied the application, and the applicant applied for leave to appeal the District Court’s decision. The application was heard as an appeal.

 

The main question before the Supreme Court was whether the joinder of the second respondent, who was not a party to the agreement containing the arbitration clause, justified refusing a stay of proceedings on the ground that otherwise the litigation would be split between two proceedings. Under Israeli law, the court has discretion to refuse a stay of proceedings in such a case with regard to domestic arbitration agreements. The question before the court was whether the court had such discretion in a case of an international arbitration agreement that is subject to an international convention. The parties agreed that the arbitration clause was subject to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958. This convention, known also as the New-York convention, was ratified by Israel in 1959.

 

Held: The Israeli court does not have the same discretion to stay proceedings under s. 6 of the Arbitration Law regarding an international arbitration agreement as it does under s. 5 of the Arbitration Law regarding a domestic arbitration agreement. Under s. 6 of the Arbitration Law together with art. 2(3) of the New York Convention, the court is required to stay proceedings unless it finds that the arbitration agreement ‘is null and void, inoperative or incapable of being performed.’ It cannot refuse a stay of proceedings on additional discretionary grounds. The existence of a litigant who is not a party to the arbitration agreement does not make the agreement ‘null and void, inoperative or incapable of being performed.’ Consequently, the court is required to order a stay of proceedings in such circumstances.

 

Application granted. Appeal allowed.

 

Legislation cited:

Arbitration Law, 5728-1968, ss. 5, 6.

 

Israeli Supreme Court cases cited:

[1]  CA 6796/97 Yaakov Berg & Sons (Furniture) Ltd v. Berg East Importers Ltd [2000] IsrSC 54(1) 697.

[2]  LA 201/85 Nitzanei Oz Workers Cooperative Agricultural Settlement Ltd v. Balhassan [1985] IsrSC 39(3) 136.

[3]  LCA 985/93 Alrina Investment Corporation v. Barki Feta Humphries (Israel) Ltd [1994] IsrSC 48(1) 397.

[4]  CA 307/71 Unico Reutman Public Works Co. Ltd v. Shimshon Insurance Co. Ltd [1972] IsrSC 26(1) 368.

[5]  CA 4601/02 Rada Electronic Industries Ltd v. Bodstray Co. Ltd [2004] IsrSC 58(2) 465.

[6]  LCA 1407/94 Mediterranean Shipping Co. S.A. v. Crédit Lyonnais (Suisse) S.A. [1994] IsrSC 48(5) 122.

[7]  CA 778/03 Inter-Lab Ltd v. Israel Bio Engineering Project [2003] IsrSC 57(5) 769.

 

Israeli District Court cases cited:

[8]  CC (TA) 842/87 General Electric Corp. of New York v. Migdal Insurance Co. Ltd (unreported).

[9]  CApp (Hf) 213/99 Egnatia Shipping Limited v. Israel Discount Bank Ltd (unreported).

[10]  CA (TA) 3060/03 University of Leicester v. Cohen (unreported).

 

American cases cited:

[11]  Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974).

[12]  Mitsubishi Motors Corporation. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985).

[13]  Riley v. Kingsley Underwriting Agencies Ltd., 969 F. 2d 953 (1992).

[14]  Intergen N.V. v. Grina, 344 F. 3d 134 (2003).

 

Canadian cases cited:

[15]  City of Prince George v. A.L. Sims & Sons Ltd. (1995) 61 B.C.A.C. 254 (B.C.C.A.).

[16]  BWV Investments Ltd. v. Saskferco Products Inc. [1995] 119 D.L.R. (4th) 577 (Sask. C.A.).

[17]  Kaverit Steel and Crane Ltd. v. Kone Corp. (1992) 120 A.R. 346.

 

English cases cited:

[18]  Lonrho Ltd v. Shell Petroleum Company Ltd, unreported decision of High Court of Justice, Chancery Division, on 31 January 1978; see Yearbook, Commercial Arbitration, vol. IV–1979, 320.

[19]  Etri Fans Ltd v. NMB (UK) Ltd [1987] 2 All ER 763.

 

For the applicant — E.A. Naschitz.

For the respondents — D. Eidelaman, R. Preiss.

 

 

JUDGMENT

 

 

Justice A. Grunis

1.    This is an application for leave to appeal the decision of the Jerusalem District Court of 4 April 2004 (the honourable Judge M. Drori), in which the applicant’s motion for stay of proceedings in an action filed by the first respondent against the applicant and against the second respondent, was denied.

The factual background

2.    The applicant (hereafter — hotels.com) is a foreign company registered in the United States. Its business is marketing tourism services, and especially hotel rooms, on the Internet. It should be noted that the former name of hotels.com was Hotel Reservations Network Inc. The first respondent (hereafter — Zuz) and the second respondent (hereafter — Hotels Online) are Israeli companies that do business in the field of tourism. On 29 February 2000, hotels.com and Zuz entered into an agreement in which it was stated that Zuz would market in Israel the tourism services offered by hotels.com, in return for a certain commission (hereafter — the agreement). Clause 11 of the agreement includes an arbitration clause, according to which disputes between the parties with regard to the agreement shall be decided within the framework of an arbitration proceeding, which will take place in the State of Texas in the United States (hereafter — the arbitration clause). Because of the importance of the arbitration clause for our purposes, we shall cite it in full:

‘The parties agree that any dispute under this agreement will be subject to binding arbitration under the commercial rules of the American Arbitration Association. The arbitration shall be conducted in Dallas County, Texas, before neutral arbitrators.’

The agreement does not include an express provision with regard to the law governing the agreement or the arbitration proceeding, but refers to the rules of the American Arbitration Association. In clause 12 of the agreement, it is stated that the Internet site that Zuz will maintain under the agreement shall be the only site in Israel in the Hebrew language through which hotels.com will market its services during the term of the agreement:

‘Zuz Tourism Ltd will be the only Internet site in Hebrew in Israel that we will sign on to integrate with per length of contract [sic[. This is from date of signed contract 29.2.00.’

3.    According to Zuz, it discovered in May 2002 that the services of hotels.com were being marketed on the Internet site of Hotels Online. Consequently, on 10 June 2002 Zuz filed an action in the Jerusalem District Court against hotels.com and against Hotels Online, in which it petitioned for declaratory relief that the aforesaid marketing activity constitutes a breach of the agreement. Zuz also petitioned for the relief of specific enforcement and for a permanent injunction prohibiting the marketing of the services of hotels.com on any Internet site other than that of Zuz. On the same day, Zuz also applied for temporary relief according to which, inter alia, the marketing of the services of hotels.com on the Internet site of Hotels Online be prohibited. For its part, hotels.com filed an application for a stay of proceedings on account of the arbitration clause in the agreement. On 4 April 2004, the District Court denied both the application for temporary reliefs and the application for a stay of proceedings. In the decision it was stated that a stay of proceedings against hotels.com was likely to result in an undesirable procedural split, in view of the fact that Hotels Online was not a party to the arbitration clause and thus no stay of proceedings could be ordered with regard to it. This split and the concern that conflicting findings would be reached in the two different proceedings, led to the decision of the District Court not to grant the application for a stay of proceedings. Admittedly, the lower court emphasized that the relevant provision of law in this case was s. 6 of the Arbitration Law, 5728-1968 (hereafter — the Arbitration Law or the law). This is because of the application of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, enacted in New York in 1958. Notwithstanding, it was held that, like s. 5 of the Arbitration Law, s. 6 of the law also gave the court discretion not to stay the proceedings in cases like this one. The application for leave to appeal is directed against the denial of the application for a stay of proceedings. Within the application, hotels.com also requested a stay of proceedings against Hotels Online. In August 2004, after the application for leave to appeal was filed, hotels.com applied to the American Arbitration Association in the United States with a request to file an action against Zuz under the arbitration clause (hereafter — the arbitration request). On 19 September 2004, the District Court gave temporary relief, according to which hotels.com was prohibited from continuing the arbitration proceedings in the United States. On 14 October 2004, this court (Justice Y. Türkel) issued an order that the aforesaid relief would remain in force until the decision was given in the application for leave to appeal, and that Zuz’s action would be stayed until then. We decided to hear the application as if leave had been granted and an appeal had been filed pursuant to the leave granted.

The legal framework

4.    The rule is that consent to submit any matter to arbitration does not negate the subject-matter jurisdiction of the court to hear the matter (CA 6796/97 Yaakov Berg & Sons (Furniture) Ltd v. Berg East Importers Ltd [1], at p. 706; LA 201/85 Nitzanei Oz Workers Cooperative Agricultural Settlement Ltd v. Balhassan [2], at p. 139). Notwithstanding, when an action is filed in court on a matter that was the subject of an arbitration agreement, the court has the power to stay the proceedings in the action. Thereby, a breach of the arbitration agreement is prevented. The main provision of the law that governs the issue of a stay of proceedings is found in s. 5 of the Arbitration Law:

‘5. (a) If an action is filed in court with regard to a dispute that it was agreed to submit to arbitration, and a litigant who is a party to the arbitration agreement applies to stay the proceedings in the action, the court shall stay the proceedings between the parties to the agreement, provided that the applicant was willing to do everything necessary to carry out the arbitration and continue it, and he is still prepared to do so.

(b) An application for a stay of proceedings may be filed in a statement of defence or in another way, but not later than the day on which the applicant first argued on the merits of the matter in the action.

(c) The court may refuse to stay the proceedings if it finds a special reason why the dispute should not be adjudicated in arbitration.’

Thus we see that when the conditions included in the section are fulfilled, the court will, as a rule, stay the proceedings between the parties to the arbitration agreement, unless it finds that there is a special reason why the dispute should not be adjudicated in arbitration. When considering whether to order a stay of proceedings in the action, the court may take various considerations into account (for a discussion of these considerations, see S. Ottolenghi, Arbitration — Law and Procedure (third extended edition, 1991), at pp. 126-145). In this context, the question arises as to how the court should act in cases where an application to stay proceedings is filed by some of the defendants who are a party to an arbitration agreement with the plaintiff, when there are other defendants who are not a party to this agreement. The question arises because it is not possible to compel someone who is not a party to the arbitration agreement to take part in the arbitration proceeding. Therefore, granting the application to stay the proceedings in such a case will lead to a split in the proceedings: the dispute between the plaintiff and the defendants who are party to the arbitration agreement will be adjudicated within the framework of an arbitration proceeding, whereas the dispute between the plaintiff and the other defendants (those who are not parties to the arbitration agreement) will be adjudicated before the court. Such a split may lead to conflicting conclusions and findings and is also not desirable for practical reasons. On the other hand, denying the application for a stay of proceedings will allow the breach of the contractual consent between the parties to the arbitration agreement. In the case law of this court, it is possible to find traces of different approaches with regard to this issue. In a decision from 1993 that addressed this issue, it was held, by a majority, that the court should examine the existence of two conditions (which were named ‘the two-stage test’): (a) is the joinder to the action of the defendant who is not a party to the arbitration agreement a genuine one, meaning that it was not done in order to evade the obligation to settle the dispute within the framework of arbitration (procedural necessity); (b) does holding the proceedings within one framework, without a split, constitute a condition for the plaintiff being able to obtain effective relief (substantive necessity). If the court is persuaded that both of the aforesaid questions should be answered in the affirmative, then there exists a special reason not to order a stay of the proceedings (the majority opinion in LCA 985/93 Alrina Investment Corporation v. Barki Feta Humphries (Israel) Ltd [3]; for another approach, see the minority opinion of Justice M. Cheshin in Alrina Investment Corporation v. Barki Feta Humphries (Israel) Ltd [3] and also CA 307/71 Unico Reutman Public Works Co. Ltd v. Shimshon Insurance Co. Ltd [4]; for a similar problem with regard to an exclusionary forum selection clause, see CA 4601/02 Rada Electronic Industries Ltd v. Bodstray Co. Ltd [5], at pp. 478-479).

5.    An additional provision concerning a stay of proceedings on account of an arbitration agreement is found in s. 6 of the Arbitration Law:

‘If an action is filed in court with regard to a dispute that it was agreed to submit to arbitration, and the arbitration is subject to an international convention to which Israel is a party, and the convention contains provisions concerning a stay of proceedings, the court shall exercise its power under section 5 in accordance with those provisions and subject thereto’ (emphasis added).

As can be seen from the wording of the aforementioned section, it does not apply to every case of an application for a stay of proceedings based on the existence of an arbitration agreement. Its application is limited merely to those cases where the arbitration is subject to an international convention to which Israel is a party, and that convention contains provisions concerning a stay of proceedings. With regard to such cases, the section provides that the power of the court vis-à-vis the issue of a stay of proceedings, as set out in s. 5, shall be exercised in accordance with the provisions of the convention and subject thereto. In other words, s. 6 of the law refers to the provisions of the convention concerning a stay of proceedings, and grants them preferential status to the provision of s. 5 of the Arbitration Law.

6.    In our case, there is no dispute between the parties that the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (hereafter — the convention or the New York Convention) applies to the arbitration clause. This convention, which was enacted in New York in 1958, was intended to replace the Geneva Protocol on Arbitration Clauses, 1923 (Treaties 4, p. 67) (hereafter — the Geneva Protocol). The convention was ratified by Israel in 1959 (the text of the convention was published in Treaties 10, p. 1). The relevant provision for our purposes is art. 2 of the convention:

‘Article II

1. Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

2. The term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.

3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed’ (emphases added).

From the wording of art. 2(3) of the convention it can be seen that the court is required to order the referral of the parties to an arbitration proceeding, unless one of the three exceptions is satisfied: the arbitration agreement is null and void, inoperative or incapable of being performed.

The scope of the dispute

7.    Zuz filed its action both against hotels.com and against Hotels Online. The agreement between Zuz and hotels.com includes an arbitration clause, according to which disputes concerning the agreement will be decided within the framework of an arbitration proceeding that will take place in the State of Texas in the United States. On the other hand, there is no arbitration agreement between Zuz and Hotels Online. The lower court reached the conclusion that the joinder of Hotels Online to the action satisfied the two-stage test adopted in Alrina Investment Corporation v. Barki Feta Humphries (Israel) Ltd [3]. In this respect, it was held that the procedural necessity of joining Hotels Online to the action arose from the fact that it was the party that allegedly violated the exclusive right granted to Zuz under the agreement. The lower court also held that splitting the proceedings — in such a way that the dispute between Zuz and hotels.com would be adjudicated in an arbitration proceeding in the United States, whereas the dispute between Zuz and Hotels Online would be adjudicated before the courts in Israel — may lead to conflicting determinations and thereby prejudice Zuz’s right to obtain effective relief. We are prepared to assume, without ruling on this issue, that the District Court was right in determining that there is both a procedural necessity and a substantive necessity for joining Hotels Online to Zuz’s action. Had the only provision of law relevant to our case been the one in s. 5 of the law, then in view of the aforesaid assumption and on the basis of the case law rule laid down in the majority opinion in Alrina Investment Corporation v. Barki Feta Humphries (Israel) Ltd [3], it would apparently be necessary to reach the conclusion that there is no basis for staying the proceedings against hotels.com. However, in the case before us the provisions included in s. 6 of the law and in art. 2(3) of the convention apply. Consequently, according to s. 6 of the law, the court is required to determine the issue of stay of proceedings in accordance with the provisions of the convention. The question that arises in our case is therefore as follows: in cases where s. 6 of the law and art. 2(3) of the convention apply, is the court competent to refrain from staying proceedings because of the joinder of a defendant who is not a party to the arbitration agreement? In order to answer this question, we are required to consider two secondary questions that are interrelated: first, do the three exceptions included in art. 2(3) of the convention constitute a closed list? In other words, is the court compelled to stay the proceedings in every case where none of the three aforesaid exceptions apply? Second, does the fact that there is a defendant who is not a party to the arbitration agreement fall within one of the three exceptions in art. 2(3) of the convention? Let us now turn to consider these issues.

The scope of discretion given to the court under s. 6 of the law together with art. 2(3) of the convention

8.    The question of the scope of discretion given to the court under s. 6 of the law together with art 2(3) of the convention was considered in the judgment of LCA 1407/94 Mediterranean Shipping Co. S.A. v. Crédit Lyonnais (Suisse) S.A. [6]. According to the approach of Justice M. Cheshin, the referral of the parties to arbitration under the aforesaid provisions is an obligatory referral. This means that when the conditions set out in s. 6 of the law and in art. 2(3) of the convention are satisfied, the court is compelled to stay the proceedings and refer the parties to an arbitration proceeding, unless one of the exceptions set out in art. 2(3) of the convention applies (ibid. [6], at pp. 129-132). On the other hand, Justice T. Strasberg-Cohen questioned ‘whether the interpretation that denies the court discretion is the only possible and proper one’ (ibid. [6], at p. 128). Since it was not necessary to rule on that issue within the framework of those proceedings, she left undecided the question whether the list of exceptions in art. 2(3) of the convention constitutes a closed list (ibid. [6], at pp. 127-128). It should also be noted that there are conflicting decisions of the District Courts on this issue (see CC (TA) 842/87 General Electric Corp. of New York v. Migdal Insurance Co. Ltd [8]; CApp (Hf) 213/99 Egnatia Shipping Limited v. Israel Discount Bank Ltd [9]; for a different approach, see CA (TA) 3060/03 University of Leicester v. Cohen [10]).

9.    In order to establish the scope of the court’s discretion under s. 6 of the law in conjunction with art. 2(3) of the convention, let us first turn to the language of these provisions. Section 6 of the law provides that the power of the court under s. 5 of the law — which deals, as aforesaid, with stay of proceedings — shall be exercised in accordance with and subject to the provisions of the convention governing the arbitration (para. 5 supra). Article 2(3) of the convention provides in mandatory language that the court ‘shall… refer’ the litigants to arbitration, unless one of the three exceptions listed in the article is satisfied (para. 6 supra). It would appear that the manner in which the two provisions are worded leads to the conclusion that if one of the three exceptions mentioned in art. 2(3) of the convention is not satisfied, then as a rule the court is required to order a stay of the proceedings. It should be noted that art. 4 of the Geneva Protocol, which includes a similar provision to the one in art. 2(3) of the convention, is also worded in a way that compels the court to refer the dispute to arbitration when the conditions set out therein are satisfied. Moreover, it appears that, according to the wording of the two aforesaid provisions, a situation in which there is a litigant who is not a party to the arbitration agreement does not fall within any of the three exceptions in art. 2(3) of the convention. As I shall clarify later, I am of the opinion that considerations concerning the purpose of s. 6 of the Arbitration Law and of art. 2(3) of the convention lead to a similar conclusion.

10. One of the main purposes of the convention is effective enforcement of international arbitration agreements, by means of setting uniform standards according to which such agreements will be enforced (A.J. van den Berg, The New York Arbitration Convention of 1958 — Towards a Uniform Judicial Interpretation (1981), at p. 4; regarding the importance of giving a uniform interpretation to the convention, see van den Berg at pp. 1-6). The concern that was expressed in this regard is that courts of the states that are parties to the convention will be deterred from sending local defendants to litigate within the framework of an arbitration proceeding in a foreign state, and for that reason will tend to refrain from honouring international arbitration agreements (see Scherk v. Alberto-Culver Co. [11], at footnote 15, and the references cited there). Such a situation is likely to cause substantial difficulty in achieving certainty, which is an essential component in the realm of international commerce. It is also likely to provide an incentive for parties to turn to the courts in their own country, in order to bring about a situation in which the dispute is adjudicated in the forum that is preferable to them. This ‘competition’ may result in conflicting decisions of courts in different countries, thereby increasing uncertainty and creating an undesirable situation. The aforesaid reasons led the United States Supreme Court to distinguish between international arbitration agreements, at least those that concern the commercial sphere, and arbitration agreements that do not have an international aspect. It was held that there are situations where international arbitration agreements should be honoured, even in cases where there would be no basis for honouring identical domestic arbitration agreements (Scherk v. Alberto-Culver Co. [11]; Mitsubishi Motors Corporation. v. Soler Chrysler-Plymouth, Inc. [12]). Against this background, let us now turn to examine comparative law in so far as it concerns the interpretation of art. 2(3) of the convention.

11. It would appear that there is a real similarity in the way in which art. 2(3) of the convention has been interpreted in many of the common law countries. The rule that has been laid down in this respect is that the clause is of a binding character. This means that if none of the three exceptions mentioned in the article apply, the court is required to stay the proceedings and refer the parties to an arbitration proceeding, without exercising any discretion in the matter (van den Berg, The New York Arbitration Convention of 1958 — Towards a Uniform Judicial Interpretation, supra, at pp. 135-137). The aforesaid rule is followed, inter alia, in the United States (Riley v. Kingsley Underwriting Agencies Ltd. [13]; Intergen N.V. v. Grina [14]), Canada (City of Prince George v. A.L. Sims & Sons Ltd. [15]; BWV Investments Ltd. v. Saskferco Products Inc. [16]) and England (Lonrho Ltd v. Shell Petroleum Company Ltd [18]). We should also point out that until the enactment of the Arbitration Act 1996, there existed in England a clear distinction, for the purposes of the issue of stay of proceedings, between domestic arbitration agreements and international arbitration agreements. Whereas with regard to domestic arbitration agreements the court had discretion not to order a stay of proceedings, with regard to international arbitration agreements the courts were obliged to order a stay of proceedings, unless one of the exceptions mentioned in the convention was satisfied. In 1996 the law was changed and now the English courts do not have discretion on the question of stay of proceedings even with regard to domestic arbitration agreements (D. Sutton and J. Gill, Russell on Arbitration (twenty-second edition, 2003), at pp. 18-19; with regard to the rule in England before the 1996 amendment, see M.J. Mustill and S.C. Boyd, Commercial Arbitration (second edition, 1989) at pp. 462-483).

Moreover, in addition to the rule that art. 2(3) of the convention is of a binding character, it has been held that a situation in which one or more of the defendants is not a party to the arbitration agreement does not fall within any of the three exceptions in art. 2(3) of the convention. In other words, the existence of a litigant who is not a party to the arbitration agreement does not make the arbitration agreement that exists between all or some of the other litigants null and void, inoperative or incapable of being performed. Therefore, in a situation of this kind, the court is obliged to order a stay of proceedings with regard to those litigants who are party to the arbitration agreement (Yearbook, Commercial Arbitration, vol. XXVIII–2003, 637-639; van den Berg, The New York Arbitration Convention of 1958 — Towards a Uniform Judicial Interpretation, supra, at pp. 161-168). This rule is followed, inter alia, in Canada (Kaverit Steel and Crane Ltd. v. Kone Corp. [17]; City of Prince George v. A.L. Sims & Sons Ltd. [15]) and in England (Lonrho Ltd v. Shell Petroleum Company Ltd [18]).

12. We see that considerations of certainty and the fear of international arbitration agreements not being honoured due to a preference for local litigants' interests, have led foreign courts to adopt an interpretational approach that restricts the scope of discretion with regard to a stay of proceedings vis-à-vis international arbitration agreements. In this respect, we should mention two additional considerations that are unique to the situation in which one of the litigants is not a party to the arbitration agreement: first, a significant number of arbitration agreements that stipulate to the holding of an arbitration in a foreign state also include a clause that applies the law of that state (or another foreign law) to the matter. If a stay of proceedings is not given with regard to such agreements because of the existence of an additional defendant who is not a party to the arbitration agreement, a question is likely to arise with regard to the law that should be applied to the dispute between the plaintiff and the defendant who is a party to the arbitration agreement. If we say that the court in Israel is required to apply the foreign law, then there will occur a split of a different kind to the one we mentioned: the dispute between the plaintiff and the defendant who is a party to the arbitration agreement will be decided according to the foreign law, whereas the dispute between the plaintiff and the defendant who is not a party to the arbitration agreement will be decided according to Israeli law. In such a situation there is a concern that conflicting decisions will be made, and therefore the justification underlying the refusal to stay proceedings is significantly weakened. On the other hand, if we rule that the whole matter should be decided in accordance with Israeli law, we shall find ourselves significantly changing the material rights of the parties to the arbitration agreement, in addition to giving judicial approval to the breach of the arbitration agreement. This increases the fear of uncertainty with regard to international arbitration agreements (for a discussion of this issue with regard to internal arbitration agreements, see the minority opinion of Justice M. Cheshin in Alrina Investment Corporation v. Barki Feta Humphries (Israel) Ltd [3], at pp. 406-408). Admittedly, in this case there is no express provision in the agreement concerning the applicable law, but we should remember that our ruling articulates a general principle. Moreover, Zuz does not claim that Israeli law governs the agreement. Even if the claim had been made, it would have been difficult to accept it. Agreeing to hold the arbitration in Texas certainly does not imply that Israeli law is applicable. Second, refraining from staying proceedings despite the existence of an international arbitration agreement, for the reason that one or more of the defendants are not party to the arbitration agreement, may create an additional difficulty. Admittedly, as a result of declining to stay the proceedings, a split of the case will be avoided, in the sense that the plaintiff’s action against the defendant who is a party to the arbitration agreement — which should have been adjudicated within the framework of arbitration — will be decided together with the action against the defendant who is not a party to that agreement. However, this cannot prevent the defendant who is a party to the arbitration agreement from acting under the agreement and filing an action with regard to precisely the same matter before the arbitrator in the foreign country. This is what hotels.com has done in the case before us. The result would be that the dispute between the parties to the arbitration agreement would be split and heard before two different tribunals: the action of the one party will be heard by the courts in Israel, whereas the action of the other party will be decided by the arbitrator abroad. It thus follows that refraining from staying the proceedings, albeit preventing a split in one respect, creates a split of the proceedings in another respect, with all that this implies. In order to prevent this new split, the court in Israel will be required to issue an injunction against the defendant who is a party to the arbitration agreement, prohibiting him from continuing his action before the arbitrator and compelling him to litigate also as a plaintiff before the courts in Israel. This would result in another significant departure from the contractual consent between the parties to the arbitration agreement (with regard to an injunction restraining foreign proceedings, see CA 778/03 Inter-Lab Ltd v. Israel Bio Engineering Project [7]).

13. I am of the opinion that the aforementioned considerations lead to the conclusion that the court’s scope of discretion under s. 6 of the law, together with art. 2(3) of the convention, is significantly narrower than its scope of discretion under s. 5 of the law. When dealing with arbitration that is governed by the convention and the relevant requirements in s. 6 of the law and art. 2(3) of the convention (such as the requirement that the stay of proceedings has been requested by a litigant who is a party to the arbitration agreement) are satisfied, as a rule the court is required to order a stay of proceedings unless one of the three exceptions in the aforesaid art. 2(3) exists (for support for this position, see Ottolenghi, at pp. 150-156; for a discussion of the question of the existence of the requirements listed in s. 6 of the law and in art. 2(3) of the convention, cf. Mediterranean Shipping Co. S.A. v. Crédit Lyonnais (Suisse) S.A. [6]). This result is consistent with the language of the law and with the language of the convention. It is also consistent with one of the main purposes of art. 2(3) of the convention: promoting legal certainty with regard to international arbitration agreements, by removing the concern that courts in the various countries will tend to prefer the interests of the local litigant, and therefore will refrain from honouring international arbitration agreements that stipulate to legal proceedings in a foreign country. I am prepared to assume that there may be exceptional cases in which the court may refuse to stay proceedings, even if none of the aforesaid three exceptions is satisfied. However, these cases will be rare (cf. Etri Fans Ltd v. NMB (UK) Ltd [1987] 2 All ER 763). It should be emphasized that our decision in these proceedings concerns only arbitrations that are governed by the New York Convention. It is possible that in certain cases another international convention will apply. As stated above, s. 6 of the law provides that when the arbitration is governed by an international convention to which Israel is a party, and the convention includes provisions concerning a stay of proceedings, the court shall exercise its authority under s. 5 of the law ‘in accordance with those provisions and subject thereto’.

14. Indeed, no one disputes that there are weighty reasons that support a refusal to stay proceedings in cases where some of the litigants are not parties to the arbitration agreement, at least in certain circumstances (for details of the reasons, see the minority opinion of Justice M. Cheshin in Alrina Investment Corporation v. Barki Feta Humphries (Israel) Ltd [3], at p. 405). These reasons are what led the majority in Alrina Investment Corporation v. Barki Feta Humphries (Israel) Ltd [3] to the conclusion that within the framework of s. 5 of the law, the court may, in circumstances of this kind, refuse to stay proceedings notwithstanding the existence of an arbitration agreement, provided that the two-stage test is satisfied (see para. 4 supra). In any case, it should be remembered that we are concerned with arbitration agreements that are subject to the convention, and are therefore governed by s. 6 of the law, and not with domestic arbitration agreements, which are governed by s. 5 of the law. With regard to international arbitration agreements it should be held that the fact that there is a litigant who is not a party to the arbitration agreement does not fall within any of the three exceptions in art. 2(3) of the convention. In other words, this circumstance does not constitute, as a rule, a reason for the court to refuse to order a stay of proceedings, in so far as arbitration agreements that fall within the scope of s. 6 of the law are concerned. The District Court therefore erred in refusing to stay the proceedings for the reason that Hotels Online, which is one of the defendants in Zuz’s action, is not a party to the arbitration clause.

Additional arguments

15. In its response to the application for leave to appeal, Zuz raises additional arguments that do not concern the question of the interpretation of s. 6 of the law and art. 2(3) of the convention, which we have discussed up to this point. I shall address two of these arguments, which require consideration. According to Zuz, hotels.com acted in bad faith when it submitted the arbitration request in the United States. As aforesaid, this request was submitted in August 2004, after the lower court gave its decision and after the application for leave to appeal was filed before us. Despite this, within the arbitration request hotels.com refrained from mentioning the existence of the proceedings taking place in Israel, including the decision of the District Court. According to the argument, the aforesaid manner of conduct is sufficient to lead to the denial of the application of hotels.com. Admittedly, in certain circumstances the appeals court may take into account events that took place after the decision of the lower court was issued. I am also prepared to assume that the duty of good faith extends also to proceedings under ss. 5 and 6 of the law (see the opinion of President M. Shamgar in Mediterranean Shipping Co. S.A. v. Crédit Lyonnais (Suisse) S.A. [6], at p. 127). Notwithstanding, I cannot accept Zuz’s argument. The subject of the District Court’s decision is the application for a stay of proceedings in an action filed by Zuz, on the grounds that there is an arbitration clause. The decision does not deal with a future action of hotels.com against Zuz. All that was held in the decision is that there is no basis for a stay of proceedings with regard to the action of Zuz against hotels.com. Since this is the case, it cannot be said that the arbitration request filed by hotels.com in the United States is tainted by bad faith. Admittedly, within the arbitration request, hotels.com should have mentioned the proceedings that are taking place in Israel and the decision of the lower court. However, I am of the opinion that the failure to mention this fact does not, in and of itself, justify denying the appeal. I will further add that the concern of a split in the litigation between two different tribunals, which has occurred de facto in this case, is one of the reasons that led me to the conclusion concerning the proper interpretation of s. 6 of the law and art. 2(3) of the convention (see para. 12 supra).

16. Another issue raised by Zuz in the proceeding before us concerns the position of hotels.com with regard to the validity of the agreement. According to Zuz, during the proceeding in the lower court hotels.com tried to advance contradictory arguments: on the one hand, it argued that the arbitration clause in the agreement should be honoured, and on the other hand it refused to admit entering into the agreement. According to Zuz, in these circumstances we should apply the rule determined in Mediterranean Shipping Co. S.A. v. Crédit Lyonnais (Suisse) S.A. [6] and refuse to stay the proceedings. This argument should also be rejected. An inspection of the pleadings filed in the lower court shows that hotels.com did not deny the existence of the agreement, and certainly did not do so expressly. The fact that hotels.com does not deny entering into the agreement is also apparent from the proceeding before us. In any case, the fact that hotels.com itself filed an arbitration request based on the arbitration clause in the agreement shows that it is not seeking to deny entering into this agreement.

17. The result is that the appeal is allowed, and the decision of the District Court, insofar as it concerns the issue of a stay of proceedings, is nullified. The proceedings in Zuz’s action against hotels.com are stayed. Consequently, the temporary relief granted by the District Court on 19 September 2004, is set aside. There is no basis for ordering, within this proceeding, a stay of proceedings against Hotels Online, which is not a party to the agreement. Zuz is liable, with regard to both proceedings, for the legal fees of hotels.com in a sum of NIS 60,000 and for court costs.

 

 

Vice-President M. Cheshin

I agree.

 

 

Justice E. Arbel

I agree with the comprehensive opinion of my colleague Justice A. Grunis and like him I recognize the importance of effective enforcement of international arbitration agreements by adopting uniform and clear rules that will allow the enforcement and implementation of such agreements, including in circumstances where one or more of the litigants is not a party to the arbitration agreement.

 

 

Application granted. Appeal allowed.

3 Elul 5765.

7 September 2005.

 

 

CA(L) 9041/05

 

 

Applicant:              "Imrei Chayim" registered society

 

 

v.

 

 

Respondents:                                       1.             Aharon Wisel

2.             Yoel Krois

3.             Bella Krois

 

The Supreme Court

 

Before Registrar Y. Mersel

 

 

 

For applicant: Benyamin Schorr

 

For respondents:  Naor Mor

 

For the Attorney General:  Michal Sharvit

 

DECISION

 

1.             The District Court annulled an arbitration award.  A party wishes to appeal that decision in this Court.  Section 38 of the Arbitration Law, 5728-1968 (hereinafter: the arbitration law) determines that a decision made pursuant to that law can be appealed by permission.  The party argues before the Registrar of the Court that the appeal should be heard, despite that, as an appeal as of right, since section 17 of Basic Law: Judicature (hereinafter: the basic law) determines that "a judgment of a court of the first instance can be appealed as of right, excepting a judgment of the Supreme Court", and in any case – so it is argued – section 38 of the arbitration law is unconstitutional.  In light of these provisions, should it be determined that a party, wishing to appeal a decision pursuant to the arbitration law that was given by the District Court, has the right to appeal to this Court pursuant to the basic law, whereas that is a right that trumps section 38 of the arbitration law, and even leads to its unconstitutionality?  That is the question before me.

 

The Facts and Procedural Stance

 

2.             The Rabbinical Court gave an arbitration award.  Respondents submitted an application to the District Court to annul it.  In a judgment of July 7 2005, the District Court decided to annul the arbitration award.  On August 18 2005 applicant submitted an application for an extension to submit an appeal to this Court (CApp 7798/05).  The main reason for the application was that it was unclear, in its opinion, whether appeal of the District Court's judgment in this case is an appeal as of right, despite the provision of section 38 of the arbitration law, and in light of the constitutional provision regarding the existence of the right to appeal, as provided in section 17 of the basic law.  In my decision of August 21 2005 I rejected the application for an extension, stating: "the extension is requested in order to decide the categorization of the proceeding.  In that situation, the proper way is for applicant to timely submit the proceeding determined by law – application for permission to appeal, after which its application to categorize the proceeding as an appeal as of right in light of section 17 of Basic Law: Judicature, and not as an appeal by permission, will be heard on its merits.  That is so, inter alia, in light of the presumption of the constitutionality of the statutory provision whose constitutionality is doubted by applicant".  After that decision, this proceeding was submitted, and registered as an application for permission to appeal (on September 22 2005).  In its arguments, applicant repeated its argument that the appeal should be heard as an appeal as of right, and not as an appeal by permission, due to the reason stated above.  Respondents were asked to respond to that argument of the applicant, and that they did.  The Attorney General also announced that he is appearing in the proceeding, and submitted his position in the case.

 

The Arguments of the Parties

 

3.             Applicant argues, in the application for permission to appeal, that it may appeal the District Court's judgment as of right, by force of section 17 of the basic law.  This constitutional provision is normatively superior to the provision in section 38 of the arbitration law, which determines appeal by way of permission only.  In light of the contradiction between the provisions in the two sections, applicant's conclusion is that section 38 of the arbitration law should be declared void, and that it should be determined that appeals of decisions pursuant to the arbitration law be heard solely as appeals as of right.  Even if the objective of section 38 is proper, section 17 of the basic law does not have a limitations clause, and in any case there is no way to determine that section 38 of the arbitration law contradicts section 17 of the basic law constitutionally.  Applicant further argues that although section 17 of the basic law limits the right of appeal to cases in which the appeal is of a judgment given by the first instance, a decision to annul an arbitration award should be seen, for the purposes of this question, as a judgment given by the first instance, and not as the decision of an appellate instance.  The conclusion, according to applicant, is that this proceeding should be heard as an appeal as of right.

 

 

4.             Respondents, in their response, requested that the applicant's position be rejected, and that it be determined that this proceeding should be heard as an appeal by permission, as provided in section 38 of the arbitration law.  According to respondents, well established precedent determines that the right to appeal is not a substantive constitutional right, rather a right that exists only by statutory provision.  Furthermore, the provision in section 17 of the basic law should not be seen as of higher normative status than that in section 38 of the arbitration law, as the status of the basic law itself is that of a regular statute, as opposed to Basic Law: Human Dignity and Freedom, and Basic Law: Freedom of Occupation.  In addition, argue respondents, the determination in section 38 of the arbitration law, regarding limiting appeals of decisions pursuant to that law to appeals by permission only, is logical, and it has a social objective.  The institution known as arbitration was established in order to be a fast, comfortable and cheaper means for resolving disputes outside of the courtroom, and in any case, determining that there is appeal as of right of the decisions of the court on the matter is superfluous and frustrates the proceedings, and, further, a party who consents to arbitration consents, at the outset, to all its characteristics, including the law according to which appeals of judicial decisions on the matter will be appeals by permission only.  For these reasons, it was requested that appellant's position regarding the categorization of the proceeding be rejected, and that the hearing of this proceeding continue as an application for permission to appeal.

 

5.             The Attorney General was also of the opinion that applicant's argument regarding the constitutionality of section 38 of the arbitration law should not be accepted.  The main reason for that is the view that adjudicative decisions regarding arbitration are not "a judgment of a court of the first instance", which is the only kind that can be appealed as of right pursuant to section 17 of the basic law.  Litigation before an arbitrator should be seen as the first litigation between the parties, and the decisions of court regarding arbitration are not decisions of the first instance, and are not, according to section 17 of the basic law itself – subject to appeal as of right.  Thus, the constitutional provision in section 17 of the basic law is not contradicted by section 38 of the arbitration law, and the latter is thus constitutional.  It was further argued that in light of the purpose of arbitration, and the precedents determined over the years in many judgments, it is clear that the borders of judicial intervention in arbitration awards must be clearly defined and limited, and thus there is logic in the determination in section 38 of the arbitration law, by which appeal of the decisions of the court pursuant to the arbitration law are by permission only.  For these reasons, the Attorney General's position is that the provision of section 38 of the arbitration law is constitutional, and is valid, and, accordingly, that this proceeding should continue to be heard as an application for permission to appeal.

 

A Preliminary Hurdle

 

6.             Indeed, the proceeding before me is not routine, and it raises questions which are by no means simple. Prima facie, the decision is of a question that arises frequently before an appellate court – whether a certain proceeding should be heard as an appeal as of right or as an appeal by permission.  However, the argument in this case is different, as it is attached to a question which is much more significant – the question of the constitutionality of section 38 of the arbitration law.  Applicant requests not only incidental decision of the validity of a provision of a statute of the Knesset – by way of indirect attack – but also that such decision be made in the framework of the question of the categorization of a proceeding as an appeal by permission or as of right.  Indeed, the hurdle which applicant has placed in front of it is high, so high that I found it difficult to determine whether it lifted the burden upon it and that its arguments should be decided on the merits.  Indeed, this proceeding can raise the question of jurisdiction.  Even if this is an indirect attack of the constitutionality of a law, it is doubtful whether it is appropriate for the question of the validity of a law of the Knesset to be decided in a proceeding such as this one, regarding the categorization of a proceeding as an appeal by permission, or as of right.  For the reasons discussed below, mainly rejection of applicant's position, I found no need to determine hard and fast rules on that issue, and I leave it to future decision.  Moreover, it has already been decided, more than once, that an argument regarding the constitutionality of a statute is not a casual argument.  A statute benefits from the presumption of constitutionality, and thus, a party arguing unconstitutionality – even at the first stage of the very proof of the constitutional impingement – must lift the burden, and it is a significant burden indeed (see, e.g., HCJ 7111/95 The Local Government Center v. The Knesset, 50 PD (3) 485, 496).  For this reason, I was of the opinion that there was no cause for extension of the deadline for submitting the proceeding, and that it must be filed as an application for permission to appeal, and that  only afterward – if necessary – I would hear applicant's argument regarding the categorization of the proceeding (my decision in CApp 7798/05).  Indeed, applicant's arguments on this issue, both in the application for extension and in the application for permission to appeal, reveal that the arguments regarding the unconstitutionality of section 38 of the arbitration law were argued with insufficient basis.  Applicant did not clarify the scope of the right to appeal determined in section 17 of the basic law, or whether that right was indeed impinged upon by the provision in section 38 of the arbitration law.  The burden on this point is the applicant's, yet it did not lift it.  This burden has special weight in the circumstances of this case, in which what is being requested is in fact a deviation from many precedents of this Court and of other instances, in which it has been determined again and again that appeal of a decision pursuant to the arbitration law is by permission, and not as of right (see, e.g. CA 299/82 Mitler v. Yavna'i Ashdod Ltd., 39 PD (2) 470, 471-472; CA 107/84 Illit Ltd. v. Elco Electromechanic Manufacturing Ltd., 42 PD(1) 298, 301-302).  Prima facie, that reason would have been enough to lead to the complete rejection of applicant's position on the issue.  It is also problematic to raise that argument after the arbitration itself was carried out by force of an agreement made at the time that the law on this point was clear to the appellant as well.  Nevertheless, in light of the serious nature of the argument and the alleged lack of clarity on the issue, I shall also discuss applicant's argument on its merits.

 

The Constitutionality of Section 38 of the Arbitration Law

 

7.             Indeed, on the merits as well, and possibly beyond what is necessary for decision of this application, I will say that I found no basis for applicant's argument.  In my opinion, section 38 of the arbitration law withstands the constitutional standard stemming from section 17 of Basic Law: Judicature.  When an argument regarding the constitutionality of a law arises, the argument must be examined in a number of stages: first, examination whether an impingement, upon a right or a provision anchored in a basic law of normative supremacy over a regular statute, has indeed been proven.  Second, examination whether that impingement – assuming it exists – withstands the conditions determined by that basic law for contradiction of it, and thus whether it is a constitutionally justified impingement or not.  Third, if it is found that it is indeed an unconstitutional violation, the question of the appropriate relief in the circumstances of the case arises (see, e.g., HCJ 450/97 Tnufa Manpower and Maintenance v. The Minister of Labor, 52 PD (2) 433, 440-441).

 

Impingement upon a Constitutional Right: The Scope of the Right to Appeal

 

8.             Section 17 of Basic Law: Judicature determines, as noted above, that "a judgment of a court of the first instance can be appealed as of right, excepting a judgment of the Supreme Court".  What is to be derived from that provision regarding the existence of a constitutional right to appeal, and the scope of such a right?  The point of departure is that Basic Law: Judicature, in and of itself, has supreme normative status, like the other basic laws (see and compare: HCJ 212/03 Herut v. The Chairman of the Central Elections Committee, 57 PD (1) 750, 755-756; HCJ 3511/02 The "Forum for Coexistence in the Negev" Registered Society v. The Ministry of National Infrastructures, 57 PD (2) 102, 106; HCJ 2208/02 Salame v. The Minister of the Interior, 56 PD (5) 950; HCJ 8071/00 Ya'akobovitch v. The Attorney General (unpublished), and Aharon Barak, haMa'apecha haChukatit – Bar Mitzvah [The Constitutional Revolution – 12th Anniversary], 1 MISHPAT VA'ASAKIM [LAW AND BUSINESS] (5764) 3, 30-31).  Thus, the provision in section 17 of Basic Law: Judicature is a superstatutory constitutional provision.  Indeed, it was rightly stated that the entrenchment of the right to appeal in section 17 of Basic Law: Judicature led to the constitutional recognition of that right (see, e.g., CA 1946/01 The Fund for Care of Wards v. The Administrator General, 56 PD (3) 311, 318-319; CA(L) 9572/01 Dadon v. Weisberg, 56 PD (6) 918, 921; CA 8935/01 Friedman v. Nechushtan, (unpublished); see further CA(L) 7608/99 Lucky Bitsu'a Proyektim (Bniyah) 1989 Ltd. v. Mitzpe Kinneret (1995) Ltd, 66 PD (5) 156, 163, and references therein).

 

9.             Despite the constitutional recognition of the right to appeal, the force of that right, and its scope, are not sufficiently clear (see CHEMI BEN-NOON, HA'IR'UR HA'EZRACHI [CIVIL APPEAL] (2d ed. 2004) 61-64).  It has been determined more than once in caselaw that the right to appeal is not a natural right or a basic right like the other civil and human rights.  Although it is a substantive and not procedural right, when a statute does not grant it, it has no independent existence (see, e.g., CrimApp 3268/02 Kozli v. The State of Israel, 57 PD (2) 835, 843; HCJ 1520/04 Shalem v. The National Labor Court, 48 PD (3) 227, 232; HCJ 87/85 Arjoub v. The IDF Forces Headquarters, 42 PD (1) 353, 360-362).  It has even been seen as some as a "privilege" (HCJ 75/85 supra, Goldberg J. at p. 380).  Beside recognition of the institution of appeal as an important institution (see HCJ 87/85 supra, at p. 363), and the determination that between two interpretations, the interpretation granting the right to appeal should be preferred to that denying it (see CA 8838/02 Goldhammer v. The Haifa Municipality (unpublished)), it was also determined that "the normative status of the right of appeal in our system is not a simple question" (CrimA 111/99 Schwartz v. The State of Israel, 54 PD (2) 241, 271), and that great caution is to be employed in determining its status and scope (see, e.g., Shlomo Levin, Chok Yesod K'vod ha'Adam vaCheruto vaSidrei haDin ha'Ezrachi'im, 35 HAPRAKLIT (5756) 451, 463-464; see also CrimApp 3268/02 supra, at p. 843).  This ambivalence toward the right of appeal is not unique to Israeli law.  A comparative glance reveals that only in a limited number of legal systems is there a recognized constitutional right to appeal (see SHLOMO LEVIN, TORAT HAPROTSEDURA HA'EZRACHIT – MEVO V'IKRONOT YESOD [THE THEORY OF CIVIL PROCEDURE – INTRODUCTION AND BASIC PRINCIPLES] (1999) 32-33, and references therein; CrimA 111/99 supra, at p. 272).  Express constitutional recognition of the right to appeal exists, for example, in the Polish constitution (Article 78) and in the Slovenian constitution (Article 25).  Although in a number of additional countries the right to appeal is recognized in the constitution, that right is only the right of the accused to appeal to a higher instance in criminal proceedings which ended in conviction (see, e.g., the Russian constitution – Article 50(3); the Swiss constitution – Article 32(3)).  Nor is there full recognition of the right to appeal in international law, per se, rather, mostly, limited recognition of the right of an accused who has been convicted to have his case heard before a higher instance (see Article 14(5) of the International Covenant on Civil and Political Rights (1966); Article 2(1) of Protocol no. 7 to the 1950 European Convention for the Protection of Human Rights and Fundamental Freedoms (of 1984)).  Furthermore, in the interpretation of Article 6(1) of the 1950 European Convention for the Protection of Human Rights and Fundamental Freedoms that determines the right to a fair hearing, it has been determined that the member states have no duty to establish instances of appeal or to grant the right to appeal judgments of the first instance (see Tolstoy Miloslavsky v. The United Kingdom [1995] ECHR 25; ADRIAN ZUCKERMAN, CIVIL PROCEDURE (2003) 723-724; JACOBS & WHITE, THE EUROPEAN CONVENTION IN HUMAN RIGHTS (2nd Ed. 1996) 160; compare SERGE GUINCHARD, DROIT PROCESSUEL (2eme. ed. 2003) 498-450; HCJ 87/85 supra).

 

10.          Against that background, how should the essence of the "right of appeal" recognized in section 17 of Basic Law: Judicature be interpreted?  Does the basic law grant a party appeal as of right, as opposed to appeal by permission, of a judgment of the first instance?  The answer to that question is complex, and there are elements pulling in both directions.  In light of my conclusion below, according to which even if section 17 of the basic law has been contradicted, the contradiction is constitutionally justified, I am not required to decide the question of the essence of this "right of appeal" in section 17 of the basic law, and shall leave it for future decision.  I shall however add that the position presented by applicant, according to which section 17 of the basic law includes a party's right to appeal, as of right, every judgment of the first instance, raises questions which are not simple.  True, the language of section 17 of the basic law is clear, prima facie, and grants parties an appeal as of right (as opposed to appeal by permission).  However, constitutional provisions require interpretation with a wide view (see FH 13/60 The Attorney General v. Matane, 16 PD 430, 442).  There is a purposive-constitutional interpretation of the right of appeal in section 17 of the basic law that can lead to the conclusion that it is not to be seen as granting the individual appeal as of right, but rather the right of access to a higher instance.  The "right of appeal" in the basic law, according to such an interpretation, is but the right to bring the case before a higher instance, and not specifically by appeal as of right.  It is thus sufficient that a party be able to request that the appellate instance grant him permission to appeal.  Thus, a statutory provision granting a party appeal by permission to a higher instance – permission which is granted by the appellate instance – like section 38 of the arbitration law, realizes the constitutional right to appeal, and it should be seen as an "appeal as of right" for the purposes of section 17 of the basic law.  What are the reasons behind such a possible interpretation of section 17 of the basic law?

 

11.          Indeed, at the basis of this interpretational conclusion is the trend in the caselaw and literature referred to above, according to which extra caution should be employed regarding the scope of the right to appeal.  This trend is based upon the character of the right to appeal, as a right which is not a basic right.  It is in line with the partial and limited recognition of the constitutional right to appeal in comparative law.  Furthermore, such an interpretative conclusion can also be derived from the objectives behind the idea of appeal.  The institution of appeal is important, as it realizes a long list of important interests: it expresses fair adjudication; it reinforces the fairness and the reasonableness of the decisions of the first instance; it erects a mechanism for review and supervision of judgments of the first instance; it nurtures the public confidence in, and legitimacy granted to judgments; it leads to correction of mistakes (where there are mistakes) – and allows creation of uniform and clear precedents for various courts (see BEN-NOON supra, at p. 57; HCJ 87/85 supra, at pp. 362-363, 372-374; HCJ 1520/94 Shalem v. The National Labor Court, 48 PD (3) 227, 232).  In light of that, a possible conclusion is that the core of the right of appeal is not appeal as of right specifically, rather the ensuring of a party's access to the higher instance, which can hear the case again (see CA 7532/02 Nissim v. Hotsa'at Modi'in Ltd., 57 PD (1) 865, 869; compare CA(L) 1441/02 Perets v. Stern (unpublished); YORAM RABIN, ZCHUT HAGISHA LA'ERKA'OT KE'ZCHUT CHUKATIT (1988) 140, note 307).  According to that line of thinking, the issue of the right of appeal, and the question of the categorization of the proceeding as an appeal as of right or an appeal by permission, are not identical (HCJ 87/85 supra, at p. 372).  The right to a fair hearing does not necessarily require the existence of an appeal as of right specifically, and the question of the categorization of the appeal – as an appeal as of right or by permission – must be derived on the basis of other considerations, related to the specific proceeding at hand (see Fejde v. Sweden [1991] ECHR 43; X. v. Court of Cassation and Review of Criminal Cases (Switzerland, SUI-1998-s-001, 1997)(Reported in BULLETIN ON CONSTITUTIONAL CASE LAW no 2003(2)).  Furthermore, this interpretation of the basic law is possible and appropriate not only for these reasons, but also in light of the very problematic nature of applicant's position, according to which section 17 of the basic law specifically grants appeal as of right.  Indeed, it is accepted that between two interpretations, the one according to which the statute is constitutional is preferable to the one which leads to unconstitutionality (HCJ 9098/01 Genis v. The Ministry of Construction and Housing (yet unpublished); HCJ 4562/92 Zandberg v. The Broadcasting Authority, 50 PD (2) 793, 811).  The interpretation offered by applicant casts a constitutional shadow not only upon section 38 of the arbitration law under discussion in the case at hand, but also upon other provisions of law determining that appeal of judgments of the first instance is by permission (see, e.g., The Courts Law [consolidated version], 5744-1984, section 64; section 86(e) of the Knesset Elections Law [consolidated version], 5729-1969; section 62c of the Prisons Ordinance [new version], 5732-1971).  The interpretation according to which these provisions are constitutional is the one that should be preferred.

 

12.          However, as noted above, I am aware of the difficulties in that interpretation, both in light of the wording of the basic law, and possibly even in light of other of its possible objectives, including granting special weight to the right of appeal.  In light of my conclusion below, according to which the violation of the basic law – to the extent that it exists – is constitutional and justified, I should like, as mentioned above, to leave the question of the scope of section 17 of the basic law for future decision.

 

13.          It should be further noted that the conclusion regarding section 38 of the arbitration law's non-violation of section 17 of the basic law could, prima facie, have been based upon an additional component in the basic law: the determination that the right of appeal is granted regarding "a judgment of a court of the first instance".  Indeed, both respondents and the Attorney General argued before me that to the extent that we are dealing with judgments and decisions according to the arbitration law, they should not be seen as judgments of "the first instance", and that a differentiation should be made between judgments which essentially employ the appellate jurisdiction of the court, and judgments whose essence is employment of the original jurisdiction of the court (CA 439/88 The Registrar of Databases v. Ventura, 48 PD (3) 808, 814-815; CA 138/78 The Director of Customs and Excise v. A. A. L. Ltd., 33 PD (3) 490, 495).  Accordingly, litigation before an arbitrator should be seen as the first litigation between the parties, and the act performed by a court that hears arguments pursuant to the arbitration law should be seen as the act of a court employing jurisdiction of review of the proceeding.  True, there is much logic in this position, to the extent that it relates to the difference between a regular hearing that takes place before the court when it is the first to hear the dispute between the parties, and a hearing in which the court hears the dispute after an arbitration award.  However, this position is not devoid of problems regarding interpretation of section 17 of the basic law, as it seems that the objective of that provision is to provide an instance of review specifically of judgments of a court (except for the Supreme Court, as provided in the end of section 17 of the basic law), as opposed to other quasi-judicial bodies.  And, after all, it is Basic Law: Judicature that we are dealing with.  The interpretation offered by respondents and the Attorney General raises doubt regarding this objective of the right of appeal, if it allows determination that whenever the first court which dealt with the issue employed appellate jurisdiction – including appeal of a body which is not a court – a party has no opportunity to appeal its judgment as of right.  Therefore, the question how the term "first instance" in section 17 of the basic law should be interpreted is not simple, and, similar to my conclusion regarding the scope of the right, as determined above, in light of my conclusion that even if section 38 of the arbitration law contradicts section 17 of the basic law said contradiction is justified, I need not decide that issue and can leave it to future decision.  For this reason also, I did not see to allow applicant to supplement its arguments on this question (application of January 23 2006).

 

Justification of Impingement upon the Right to Appeal

 

14.          Even if there is substance to applicant's argument that section 38 of the arbitration law contradicts section 17 of the basic law, that does not, as mentioned above, conclude the constitutional examination.  The right to appeal is not an absolute right, rather a relative right which is to be balanced against other rights and interests (see CA(L) 7435/05 Segal v. United Mizrachi Bank Ltd. (unpublished)).  Even though the provision being examined is a superstatutory constitutional provision, that can not lead to the conclusion that it can under no circumstances be contradicted by a regular statute of lower normative status.  Indeed, a regular statute can contradict a provision of a basic law, subject to conditions which that basic law itself determines (see, e.g., section 8 of Basic Law: Human Dignity and Freedom; section 4 of Basic Law: Freedom of Occupation).  And what is the law if the basic law does not contain a provision like a limitations clause, regarding contradiction of it?  Applicant argued before me that in such a situation, there is no possibility of contradicting a provision of a basic law.  I cannot accept that position (see further and compare: Hillel Sommer, miYaldut la'Bagrut: Sugiot Ptuchot baYisuma shel haMa'apecha haChukatit [From Childhood to Maturity: Outstanding Issues in Implementation of the Constitutional Revolution], 1 MISHPAT VA'ASAKIM [LAW AND BUSINESS] (5764) 59, 62-65; Barak supra, at pp. 30-33; see also Ariel C. Bendor, Arba Ma'apechot Chukatiot? [Four Constitional [sic] Revolutions?], 6 MISHPAT U'MIMSHAL (5763) 305, 306-307).  In my opinion, the precedents on the issue are clear, and the conclusion that arises from them is that where there is no express limitations clause in a basic law, or another provision exhaustively arranging the possibilities of contradiction of a basic law by a regular statute, the provisions of the basic law can nonetheless be contradicted, provided that the contradiction fulfills the conditions of the "judicial limitations clause", primarily that the contradicting statute befits the values of the State of Israel as a Jewish and democratic state; the existence of  a proper objective; and an infringement that does not exceed the necessary minimum (see HCJ 212/03 supra, at p. 107; EA 92/03 Mofaz v. The Chairman of the Central Elections Committee, 57 PD (3) 793, 810; HCJ 3434/06 Hofnung v. The Chairman of the Knesset, 50 PD (3) 57, 76).  This conclusion is also called for in light of considerations of constitutional harmony (see AHARON BARAK, SHOFET BE'CHEVRA DEMOKRATIT [A JUDGE IN A DEMOCRACY] (2004), at pp. 351-353).  Against this background, section 17 of the basic law regarding the right to appeal  – that doesn't include an express limitations clause – should be read as allowing contradiction of it by a regular statute that fulfills the conditions of "the judicial limitations clause" (compare BARAK (2004) supra at p. 352).

 

 

15.          Does section 38 of the arbitration law fulfill the conditions of "the judicial limitations clause" of section 17 of Basic Law: Judicature?  My answer is affirmative.  Indeed, even if it should be determined that limitation of appeal of decisions according to the arbitration law exclusively to appeal by permission constitutes a contradiction of section 17 of the basic law – and, as aforementioned, it is questionable if that is so – such contradiction fulfills the conditions of "the judicial limitations clause", and thus section 38 of the arbitration law passes the constitutional test.  It is not argued before me that section 38 of the arbitration law is at odds with the values of the State of Israel as a Jewish and democratic state.  Regarding the condition regarding proper objective: that condition it indeed fulfills.  Indeed, at the basis of the restriction of appeal of decisions regarding arbitration exclusively to appeal by permission stands a proper objective which fulfills an important social interest (see CA 4886/00 Gross v. Keidar, 57 PD (5) 933, Procaccia J. at pp. 942-945).  That objective is a derivative of the special objective of the institution of arbitration.  It is based upon the assumption that there is benefit for the parties, as well as for the wider public interest, in resolving disputes on the basis of agreement, outside of the courtroom.  It assumes that the efficiency of such resolution and the incentive to turn to such resolution are conditional, inter alia, upon the ability to conclude the dispute relatively quickly, with very well defined and limited involvement of the courts in the proceedings themselves and their results (see CLA 125/68 Shachav v. Shachav, 23 PD (1) 16, 19-20 Berenson J., and SMADAR OTTOLENGHI, BORERUT – DIN VE'NOHAL [ARBITRATION – LAW AND PROCEDURE] (4th ed. 2005) 3-5, and references therein).  It is for good reason that the causes for intervention in arbitration proceedings were defined clearly in the arbitration law.  It is for good reason that the court usually does not interfere in the arbitration process or in its results.  It is for good reason that intervention of the appellate instance in decisions of courts regarding arbitration are also limited (see CA 4886/00 supra, at p. 943; and CApp 427/62 Amir Biyaf Ltd. v. Chananya Yitschaki u'Banav Ltd., 16 PD 1958, 1960; CA 823/87 Dania Sibus v. S. A. Ringel, 42 PD (4) 605, 612; LCA 1999/02 Ilax (Yisrael) Ltd. v. D. S. M., Construction and Development Ltd. (yet unpublished)).  In any case, against the background of this important objective, the provision of section 38 of the arbitration law, which limits the possibility of appealing decisions pursuant to the arbitration law to appeals by permission only, realizes a proper objective.  It advances the efficiency of the institution of arbitration, and the advantages that stem from it.  It grants weight to the agreement between the parties.  It reflects the fact that the very heart of arbitration is resolution of the issue outside of the courtroom.

 

16.          Even if the objective of section 38 of the arbitration law is proper, the question whether the impingement is not excessive also needs to be examined.  This examination is carried out according to the three tests of proportionality, regarding a rational link between the means and the objective; a lack of a less impinging means that realizes the same objective; and the existence of a proper relationship between the benefit stemming from the impingement and the harm it causes (see, e.g. HCJ 1715/97 The Investment Managers' Bureau in Israel v. The Minister of Finance, 51 PD (4) 367, 392-393).  According to these tests, it is not difficult to determine that the restriction of the possibility of appealing a decision pursuant to the arbitration law exclusively to appeal by permission is a proportional impingement upon the constitutional right of appeal: first, the means chosen – restriction of the possibility of appealing to appeal by permission only – is rationally linked to the objective, which is preserving the objective of the institution of arbitration, of making the arbitration process more efficient, and realizing the interest of the parties and of the public at large in resolving the issue, to the extent possible, without judicial intervention.  Second, prima facie, there is no less impinging means that can realize the same objective.  Prima facie, the spectrum of possibilities that stood before the legislature regarding the possibility of appealing decisions pursuant to the arbitration law was either to completely reject the possibility of appealing to an appellate instance; allowing appeal by permission only; or allowing appeal as of right.  Appeal as of right would, as aforementioned, frustrate the proper purpose of making the arbitration procedure efficient and preserving its framework as a proceeding whose essence is decision of the dispute outside of the courtroom (see CA 4886/00 supra, ibid).  Appeal by permission is a means which impinges less than the more severe alternative – which, prima facie, the legislature could have chosen – of rejecting the possibility of appeal of decisions of courts pursuant to the arbitration law.  No other less harmful means which could still realize the same objective was argued before me.  The conclusion is, therefore, that the means chosen in section 38 of the statute also fulfills the proportionality condition of a lack of a less harmful means that realizes the same objective.  Last, there is a proper relationship between the benefit in limiting the possibility of appeal to appeal by permission only, and the prima facie harm to the party to whom appeal as of right is not granted.  The party's ability to turn to a higher instance is preserved in this arrangement, and the appellate court can examine the circumstances of the case and decide whether to grant permission to hear the arguments as an appeal or not.  At the same time, the need to attain permission ensures that the legal proceedings related to arbitration will be shorter than regular proceedings, and that the objective at the basis of the institution of arbitration will be preserved, as aforementioned.  The conclusion, therefore, is that section 38 of the arbitration law also withstands the third subtest of proportionality, regarding a proper relationship between the benefit from the means and the harm caused by it.

 

Result

 

17.          My conclusion is therefore as follows: applicant's application to determine that it has the right to appeal the judgment of the District Court in light of section 17 of Basic Law: Judicature, despite the clear provision of section 38 of the arbitration law is rejected: first, prima facie, applicant did not lift its burden in arguing the unconstitutionality of a statutory provision of the Knesset, especially in light of the doubts regarding the interpretation of the scope of section 17 of the basic law.  Second, even if section 38 of the arbitration law contradicts section 17 of the basic law, that contradiction is for a proper purpose and is not excessive.  In light of that, my conclusion is that applicant's argument regarding the unconstitutionality of section 38 of the arbitration law is rejected, and thus its argument regarding its entitlement to file an appeal specifically as an appeal as of right cannot be accepted.  The proceeding shall thus continue to be heard as an appeal by permission, as determined in section 38 of the arbitration law.  I make no award of costs for this application.

 

Given today, 1 Shvat 5766 (Jan 30 2006).

 

Yigal Mersel, Judge

Registrar