Civil Case (Petah Tikva) 38258-01-25 D. Niv Construction and Development Ltd. v. Habonim A.M.

Judgment

I have before me the Applicant's request to order the removal of an arbitrator from his position in accordance with Section 11(1) of the Arbitration Law, 5728-1968 .  (Hereinafter: "the Arbitration Law").

1. General Background;
2. On March 4, 2020, the Applicant filed (hereinafter: "The Applicant and/or the Plaintiff"), a monetary claim against respondents 2 and 3 in the sum of ILS 2,200,000 (T.A. 53566-02-20 Hello Petah Tikva [Nevo]The basis of the claim is agreements in which the parties entered into in the framework of a project for the construction of a commercial center in Ashkelon, in the framework of which respondents 2 and 3 served as contractors on behalf of the applicant for the execution of the skeleton work in the project.

As claimed in the statement of claim, the consideration determined according to the agreements was ILS 5,100,000 plus VAT, when the agreement was defined as the Fausli Agreement.

The damages claimed in the statement of claim included, inter alia, the following components: restitution of overpaid funds, agreed compensation for delay in carrying out the works, repairs and completion of the works, guarding services, waste removal and cleaning of the site, costs due to the need for reinforcement of employees, and damage to the Applicant's reputation and good name (Appendix 1 to the Application).

2. On August 31, 2020, a motion was filed on behalf of the respondents to certify an arbitration award and to dismiss the claim in limine. After a response was submitted on behalf of the Applicant, on November 25, 2020, a hearing was held before the Honorable Judge Nachum Sternlicht, during which the parties reached an agreement whereby the motion to certify the arbitration award submitted by the Respondents would be rejected; An arbitrator will be appointed by the court who will be a construction engineer; The arbitrator shall not be subject to the substantive law, the laws of evidence and the laws of procedure; The arbitrator will conduct a transcript at the arbitration meeting; The arbitration award will be reasoned as it should be.

In accordance with the court's decision from that date, a decision was given effect to the consent of the parties, and the court appointed engineer Dan Orman to serve as an arbitrator in the dispute between the parties (hereinafter: "The Selector").  (Hereinafter: "The Appointment Decision" - attached as Appendix 5 to the application).

3. On December 3, 2020, the respondents approached the arbitrator in order for him to give instructions to advance the arbitration proceeding before him. The first arbitration meeting was held with the participation of the parties and their counsel on March 4, 2021 (hereinafter: "The First Meeting").
4. On March 7, 2021, the arbitrator sent the parties' counsel a document that was crowned "Meeting Minutes", which details the summary of the first meeting. In the framework of this document, the arbitrator instructed the respondents to produce: a statement of defense, a statement of counterclaim, as well as an expert opinion if they have one, as well as any other material that supports their claim.  The arbitrator also instructed the Applicant to respond within 60 days of receipt of the statement of defense and the counterclaim regarding the claims; engineering opinions on the subject of construction defects; Plans; A bill of quantities signed by the parties as well as any other material supporting her claim.  He also instructed the Applicant to attach the tender material and the tender plans (the minutes of the first meeting were attached as Appendix 7 to the Application).  In addition, the arbitrator attached an arbitration agreement to his letter and asked the parties to sign it.  In his letter, he also stated the amount of his fees for the first meeting, which would be paid equally between the parties.
5. Upon the filing of the statement of defense on their behalf on June 2, 2021, the respondents filed a counterclaim in the sum of ILS 3,582,582, which allegedly consisted of the balance of consideration not paid by the Applicant on the basis of the Fauchli Agreement, as well as for additions and changes made by them in the framework of the project. A statement of defense for the counterclaim was filed by the Applicant on September 1, 2021 (Appendices 3 and 4 to the Application).

As claimed in the application, on November 2, 2021, a reply was submitted on behalf of the respondents.  In addition, each of the parties submitted an expert opinion on its behalf.  On October 27, 2022, the arbitrator conducted a tour of the project site.