Civil Case (Jerusalem) 71355-05-25 Moshe Gertner v. Gezel Weinroth - part 5

And later on:

"...  This is not a marginal procedural obstacle, but rather a substantial obstacle.  As explained, the procedural rules are not the result of arbitrariness.  They reflect a proper balance between the many interests that are at stake in the civil proceeding..."

124. See also the words of the Honorable Justice Amit (as he was then called) regarding the manner in which pleadings must be drafted (v. 3):

"...  The regulations give rise to a general principle according to which the opposing party should not be surprised, and the pleadings must be drafted in such a way that the parties and the court can understand the front of the dispute from them, and 'as a rule, pleadings are not secret writing in the sense of 'deciphering ciphers'...'"

Later on, he also points out that at the end of the day, ambiguity regarding the argument raised can arise from the other side that he was not given a proper opportunity to defend himself (verse 4):

"...  A litigant would do well to explain in writing his pleadings if he relies on a contractual or tort cause of action or in the laws of making tithes, if he wishes to attribute personal liability to an organ in the company or if he wishes to raise a veil between the company and its owners.  Otherwise, he risks that the court will not be able to rule on the basis of a claim that was not pleaded, or that it will be argued against him that he raised a surprising claim or a claim that the opposing party was not given an opportunity to deal with."

125. In his ruling, the Honorable Justice Melcer also noted the approach "which places at the center of the balance the consideration of clarifying the truth, which is a first-order value, in relation to the protection of procedural justice, whose place is in the order of second in the line...".
126. Our case is not dealing with a personal liability that derives from a mission or lifting the veil, but it seems that the logic according to which such a claim must arise clearly from the plaintiff's arguments applies similarly with regard to the drafting of pleadings where we are dealing with an intention to establish a personal liability on an heir, as opposed to charging him with the assets of the estate, even though in both cases he is personally named as the defendant.
127. For the reasons explained above, there is at least some ambiguity as to the question of whether, at the time of the addition of the Weinroth heirs as litigants, the claim included a claim regarding the division of the estate, and hence their personal liability for the amounts of the claim.
128. It should also be noted in this regard that the arbitration award itself does not refer to the source of the personal liability of the Weinroth heirs. In the absence of reference to the matter, it is difficult to know whether the determination regarding the personal liability of the heirs stems from the fact that it was clear to the arbitrator that Gertner's claims at the time of the addition of the Weinroth heirs included a claim regarding the division of the estate, and hence in the absence of his denial by the heirs, they accept their personal liability and there is nothing to explain or elaborate on the matter; Or perhaps the question was not analyzed due to an error, all in a way that adds to the ambiguity that exists on the matter.
129. It cannot be ruled out that the ambiguity surrounding the question of the exact range of claims raised against the Weinroth heirs at the time of their inclusion as litigants in the proceeding, "served" in a certain sense to one or both of the parties.
130. Thus, inter alia, it is clear from the proceedings in the Family Court that the Weinroth heirs adamantly refused to allow Gartner to receive any knowledge of the deceased's estate assets or their scope. For this reason, they also vehemently objected that Gartner should be allowed to review the detail that was submitted.  Obviously, if the Weinroth's heirs had to defend themselves in the framework of the arbitration proceeding against a claim relating to their personal liability, and they had sought to refute it by claiming that the value of the estate was lower than the amount of the claim, they would have had to disclose the details of the privatization, which they sought to avoid.
131. The details of the estate were eventually disclosed to Gartner as part of the proceeding. Upon its receipt, Gertner argued that it was clear from what was stated in it that the deceased and his heirs had acted to reduce the assets of the deceased and the estate.  Therefore, they claim that this was the reason why the heirs of Weinroth refrained from arguing regarding the value of the estate, even though they fully understood that their personal liability was discussed in the proceeding, while seeking to take advantage of the alleged duplication of the procedure in order to carry out actions that make it difficult to trace the estate's assets.  In light of the above, Gartner even sought to dismiss out of hand the request for cancellation that was filed, claiming that there was a lack of good faith in the conduct of the Weinroth heirs throughout the entire process.  In the circumstances of the case, I do not find it necessary to order dismissal in limine, since I am of the opinion that the request for annulment should be heard on its merits, as is done here.
132. On the other hand, it can also be pointed out that a situation in which the Weinroth heirs do not defend themselves against the personal claim against them, could have raised a question mark among Gertner regarding the Weinroth's heirs' understanding that the proceeding actually includes a claim that the estate has already been divided, and therefore they are exposed to the amount of the claim personally, and that therefore a clear and explicit amendment of the pleadings is required, from which the facts establishing personal liability in light of the division of the estate will arise. In this regard, it should be noted that the claim against the deceased amounted to hundreds of millions of dollars, with Gertner himself arguing in a family court that "the amount of the deceased's debt to the Gertner brothers...  is expected to be significantly higher than the total assets of the estate...(Paragraph 45.1 of the notice of appeal - emphasis added).  While it is not Gartner's job to explain the law to the Weinroth heirs, the absence of a defense argument on the part of the Weinroth heirs regarding the amount of the estate, in the face of a claim that understandably far exceeds its value, could have signaled that they understand the claims of the lawsuit, which may not have been fully clarified, in a different way from Gartner; Therefore, they do not raise an obvious argument, when it is convenient for Gartner not to clarify this.
133. Either way, in summary, I am of the opinion that in the circumstances of the case, the ambiguity that has been created is sufficient to establish grounds for intervening in the arbitration award that was given. Since it is not clear whether, following the addition of the Weinroth heirs as parties, a claim was included in the proceeding regarding the division of the estate, and the personal liability of the Weinroth heirs as a result, the determination of personal liability on them was given without them actually having a proper opportunity to argue their claims in the matter, and in the circumstances - even without them being able, since it was not clear that the matter was on the agenda, to bring evidence regarding the value of the estate.
134. As explained by Ottolenghi, "It must be said that even if the arbitrator is exempted from the rules of evidence and the ordinary rules of procedure, it does not mean that he is free from the so-called 'rules of natural justice'..." (p. 1029).  See, for example, Civil Appeal Authority 3505/00 Ram Building Engineering Works Company v.  Sorek Brothers in a Tax Appeal (July 11, 2000), according to which "the ground for annulment of an arbitral award under section 24(4) of the Arbitration Law is intended to ensure the right of a party to argue his arguments and to present his evidence in arbitration.  It is based on the rules of natural justice and naturally, and in view of their importance, special care must be taken to fulfill them in their essential context...".
135. See also Civil Appeal Authority 1662/20 Yosef Moussif v. Elul Diamond Company in Tax Appeal (April 19, 2020): "Among the components of the proper judicial process, which the court seeks to supervise, are also the rules of natural justice...  These rules apply in every judicial proceeding, including even judicial proceedings without due process, such as the arbitration proceeding in our case...  At the heart of these rules is the right to plead, which is enshrined in section 24(4) of the Law, which allows a party to plead his arguments and bring his evidence in the arbitration proceeding."
136. In the circumstances of the case, I am of the opinion that from the moment the issue of the personal liability of the heirs was decided, although it is not clear that the claim was made in the proceeding, and therefore it is not clear that it was necessary to defend against it, and also to bring evidence regarding the value of the estate as a result of it, a cause of action arose by virtue of section 24(4) of the Arbitration Law. The results of this ground for cancellation will be discussed below at the end of this chapter.
137. Similarly, and in the absence of reference in the arbitration award to the source of the personal liability of the Weinroth heirs, since it was determined that this was not part of the claim claimed, it cannot be said that a reasoning was given for charging the Weinroth heirs jointly and severally for the entire amount awarded. As already noted above, it is possible that the reasoning was not given in the circumstances of the case from the time the arbitrator saw the matter as included in Gertner's arguments, and since there was no denial of it in the claims of the Weinroth heirs, then no dispute arose in the matter, and therefore no reasoning was required regarding this obligation.  However, in the absence of reasoning, it is unclear whether this was the arbitrator's course of analysis; In any event, since no argument was clearly raised that the estate had already been divided, the lack of reasoning as to why a personal liability of Weinroth's heirs was nevertheless established establishes a cause of action under section 24(6) of the Arbitration Law.
138. Weinroth's heirs claim that the arbitration award given does not conform to the law in the circumstances of the case, since charging an heir an amount that exceeds the value of the estate is contrary to the law. Therefore, according to them, it is required, at the very least, to clarify in the framework of the ruling, that the obligation determined in the framework thereof is subject to the provisions of the Inheritance Law regarding the liability of the heirs, which will be decided in a separate proceeding.  This was done, for example, by the court in the Shua case and in the Cohen case.  In these circumstances, Weinroth's heirs raised an argument that a court must add a clarification of the said type to the arbitration award, by virtue of the provision of section 22(d) of the Arbitration Law, which deals with the correction of an error in the arbitration award.  I do not find room to order so, since in the circumstances of the case it is not possible to establish that the exclusion in the arbitration award of a determination that the obligation determined in the framework thereof on the heirs of Weinroth is subject to the provisions of the Inheritance Law, stems from an error or omission therein.
139. As to the question of whether this establishes grounds for annulment by virtue of section 24(7) of the Arbitration Law, which deals with a ruling that is not in accordance with the substantive law, the importance of the question diminishes, since in any case there are other grounds for cancellation. I will note, however, that it appears that this ground does not apply in the circumstances of the case.  As appears from the Civil Appeal Authority 113/87 Ayalon Highway Company in Tax Appeal v.  Yehuda Shtang & Sons in Tax Appeal (October 31, 1991), the aforesaid ground for cancellation applies where an arbitrator knowingly ignored the law, in contrast to a situation in which the application of the law was erroneous by him.  In our case, in the absence of reasoning on the point at hand, it cannot be determined that the arbitrator deliberately chose to ignore the law, as opposed to the defect that was created in view of the lack of a claim in the matter, which was discussed above.
140. The arbitrator also did not positively rule that Weinroth's heirs would be liable for an amount that exceeded the value of the estate, since the value of the estate was not laid out to him at all. It is therefore clear that in this sense, he did not knowingly make a determination contrary to the law, even if according to the Weinroth heirs, the result is such that they were not given the opportunity to bring evidence to substantiate it.  In any event, since other grounds for cancellation also apply as aforesaid in the circumstances of the case, the question of whether there is also a cause for cancellation under section 24(7) becomes secondary in any case.

Grounds for cancellation by virtue of sections 24(9) and 24(10) of the Arbitration Law

141. Weinroth's heirs argue, as aforesaid, that the law of annulment of the arbitration award even by virtue of its fact that in the circumstances of the case is contrary to public policy by virtue of section 24(9) of the Arbitration Law, and that a ground for annulment applies where there is a cause for annulment of a final judgment of a court as stated in section 24(10) of the Arbitration Law.
142. With regard to these grounds for cancellation, Weinroth's heirs claim that this is necessitated by virtue of the imposition of such a high personal liability on them, which, according to them, exceeds and exceeds the value of the estate, and is liable to bring them to bankruptcy and prevent them from practicing in the future (since some of them are lawyers).
143. The arguments regarding the high obligation in the arbitration award or its implications for the heirs of Weinroth do not in themselves justify the cancellation of the arbitration award. Thus, while on the other hand, there are also Gartner's rights, in their case it was determined that the deceased took from funds that they deposited in trust about 20 years ago in the amount of $37.5 million, which he has since borne an undisputed interest rate that brings him to the amount claimed today, and since this sum was not returned to them according to their right.
144. However, where such a charge was imposed on the heirs, and as it appears from the above analysis, they were not given a day to argue in his case, and at the very least, grounds for cancellation as described above apply by virtue of sections 24(4) and 24(6) of the Arbitration Law, then it seems that it can be said that the cancellation provision in section 24(9) of the Arbitration Law will also apply in the matter, since the defect that occurred leads in the circumstances of the case to a severe result (see, For example, Civil Appeal Authority 6726/96 Abu v. Beit Nekofa, Moshav Ovdim for Cooperative Agricultural Settlement in a Tax Appeal at para.  15); which also leads to the heir being charged with an amount higher than the estate he inherited, without being able to show otherwise, and the implications of this in respect of him also go far beyond the very existence of the obligation.

The Result of the Application of the Grounds for Annulment to the Arbitral Award

145. As follows from the provision of section 24 of the Arbitration Law, where there is a cause for annulment, the court has the power to annul the award, supplement it, amend it or return it to the arbitrator. Similar principles also apply by virtue of section 26(b) of the Arbitration Law.
146. In accordance with the case law, by virtue of these sections, "it is necessary to go from the light to the heavy, and to annul an arbitration award only as a last resort, if it cannot be left in place, and to correct the defect in it in some other way" (Civil Appeal Authority 3312/01 Nissim v. American Israeli Gas Company in Tax Appeal,   4 (January 29, 2002)).
147. In our case, I do not believe that the grounds for annulment need to lead to the annulment of the arbitration award. Weinroth's heirs also agree that, subject to their arguments regarding the contradictions in the arbitration award (which will be analyzed in the next chapter), the arbitration award is valid at least with respect to the deceased's estate, i.e., insofar as it relates to the collection from the assets of the estate, which is also undisputed that its value at the time of death amounted to a substantial sum (even if it is much lower than the amount awarded, according to them).
148. To the extent that the estate is divided among the heirs of Weinroth, the heirs of Weinroth also agree that Gartner has the right to collect the amount of the arbitration award from the heirs, subject to the right of the heirs to raise claims regarding the value of the estate at this stage (which, as stated, in any case does not stand at zero). The argument of the Weinroth heirs is, however, that in the absence of the arbitrator authority to decide the matter of the heirs' liability, this matter must be heard in court (unless their consent is given to clarify it in an arbitration proceeding).
149. Gertner, who does not accept that there are any grounds for cancellation in the circumstances of the case, nevertheless expressed the position that if it is determined that there is a cause for cancellation in the matter, in such a situation the case should be returned to the arbitrator, who will decide on the issue of the heirs' liability.
150. As analyzed above, in the circumstances of the case, I am of the opinion that the arbitrator is authorized to discuss the personal liability of the heirs, and since this is the case, I am of the opinion that the proper course of action is to return the decision in this matter to the arbitrator, so that the parties in the matter will be heard on their merits and he will decide them in accordance with his authority and the best of his judgment, while he is of course not bound to this matter in any determination within the framework of the arbitration award, to the extent that it was given. I will note that no argument was raised for the arbitrator's personal disqualification from discussing the matter, although in the request for cancellation it was requested that if the matter was resolved in the framework of arbitration, it would not be done before the present arbitrator in which, according to the claim, the heirs of Weinroth had lost trust.  However, this was not explained beyond that, and it was not even raised during the hearing before me, and therefore I do not find that there is any justification for it when no basis has been laid as to why full confidence should not be given to the abilities and professionalism of the arbitrator.
151. In the circumstances of the case, I am also of the opinion that returning the proceeding to the arbitrator, who is already familiar with the proceeding and the parties to it, even though the current issue of clarification is different from the one discussed so far, has advantages in promoting it effectively in order to bring about an end to the handling of the parties' disputes after so many years. Even if it is found that there is a need to hold a "second round" of arbitration, in order to clarify the personal liability of the heirs for the amount awarded, it is clear that this entails a significant blow to Gartner.  It was determined, as stated, that the sum of $37.5 million that they had deposited in the trustees of the deceased was taken from them by him about 20 years ago, with the legal proceedings relating to his restitution taking more than a decade, at considerable costs, and more.  To the extent that this is possible, and this is their wish, it is their right that the matter be clarified before a forum that enables the advancement of their claim in a manner that is supposed to be quick and efficient, and which is also familiar with the material in question; This is in contrast to his clarification in court, about the longer period of time that this is expected to take.
152. Gartner claims that even before the deceased's death, as well as in the years that have passed since his death and since the estate was divided, actions were taken to empty it by the heirs of Weinroth, and it is difficult to trace the passage of so many years to the estate's money, which also seems to have been scattered in various parts of the world, under various companies and legal bodies. It is presumed that the arbitrator will take these arguments into account during the hearing before him, to the extent that they are established before him; When, after all, the burden of establishing that the value of the estate is less than the amount of the claim rests, as aforesaid, on the heirs of Weinroth, and also claims that the estate was unlawfully emptied prior to the death of the deceased, can obviously be taken into account, even given the passage of time, and to the extent that they are established.
153. This is said in order to clarify that in summary, a situation in which the hearing is rescheduled for another round of litigation before the arbitrator, does indeed entail a loss of time and additional costs, but it does not negate Gartner's rights. This is in contrast to a determination that the arbitration award will also be valid as it is with respect to the personal liability of the Weinroth heirs, which, given at least the existence of ambiguity as to whether this issue was part of the grounds that were supposed to be discussed in the course of the proceeding, would lead to a result that could be severely damaged.
154. Request for annulment in light of contradictory determinations of what was stated in the award given in the parallel arbitration
155. As explained above, the arbitration in question was conducted in continuation of the parallel arbitration that had begun about two years before the same arbitrator (first the arbitrator Goren, and then the arbitrator Orenstein). The arbitration award in the parallel arbitration was rendered on April 22, 2024.  It spans over 1,200 pages, and deals with the disputes between Gartner and Gertler.  According to the claim, different determinations in the parallel arbitration award contradict those given by the same arbitrator in the framework of the arbitration award in the present proceeding, in a manner that establishes various grounds for annulment.
156. In order to understand the essence of the contradiction between the arbitral awards that were rendered, it will be briefly explained that of Gertner's arguments against the deceased, the one that was accepted in the framework of the arbitration in this case related to the transfer of various sums executed by Gertner to the deceased in a total amount of approximately $50.5 million, during the year 2006 (in fact, a total of about $54 million was transferred to the deceased, but there was no dispute that the sum of over $50.5 million was transferred to him as fees for Gertler, which Gertler undertook to repay to Gartner). According to the determination, this was done in order to prove the seriousness of the transaction for the purchase of a mine in the Congo by way of an acquisition together with Gertler of shares in the Termalt Company (the "Termalt Transaction"), the total amount of which was ultimately $350 million.
157. From the aforesaid sum that was transferred to the deceased, it appears according to the ruling in the parallel arbitration that there is no dispute between the parties that the sum of $13 million was credited in favor of the Termalt transaction. The question that remains on the agenda is whether the deceased must return to Gartner the balance of the $37.5 million in his possession, after it was not actually used for the purpose of the Termalt deal, the sums of which came from other sources of Gartner.
158. To complete the picture, it should be noted that in the framework of the parallel arbitration, Gertner sued Gertler in connection with the sums transferred by them for the Termalt transaction, on various grounds relating to misrepresentations, bad faith, fraud, and serious misrepresentations on the part of Gertler regarding this transaction. However, since it was not claimed by them as aforesaid that the sum of $50.5 million transferred by them to the deceased was actually used to make the payment for the Termalt transaction, and that the sum was transferred from the dealer to Gertler (with the exception of the sum of $13 million), despite various claims that were made regarding him in the first place, at the end of the day the said sum was not claimed in the parallel arbitration from Gertler.  It should also be noted that in any event, Gertner's claim to Gertler regarding the sums they paid in connection with the Termalt transaction (which did not include the sum of $37.5 million held by the deceased) was rejected in the framework of the parallel arbitration.
159. With regard to the present arbitration, the question of the deceased's liability for the sum of $37.5 million entrusted to him by Gartner was therefore on the agenda. With regard to the sum of $20 million out of the said amount, the deceased claimed that it was used for the purpose of payment, which he transferred to Gertler for the purpose of acquiring rights by Gartner in two projects - Iron Or and Bauxite (the "Projects"); Since he does not hold this sum, he does not have to return it.  To complete the picture, it should be noted that as for the balance of $17.5 million, he claimed that it was paid to him by Gartner as fees and initiation fees.
160. The matter of the projects (Iron Or and Bauxite) was also discussed in the framework of the parallel arbitration. In this framework, Gertner demanded the return of the sums they paid for these projects to Gertler, claiming that this payment was stolen by Gertler, who did not use the money transferred to him to obtain rights in the projects, as he was obligated to do.  It should be noted that this claim was dismissed, since it was determined that Gertler had not breached his obligation to Gertner with respect to these funds transferred to him (see, inter alia, at paragraph 148 of the parallel arbitration award).
161. In the parallel arbitration, the arbitrator discussed the question of where Gartner was paid for the projects. Gertner claimed that the payment (which according to them amounted to only $17 million) was made by them not from the funds held by the deceased, but directly in a transfer made by them to Gertler through the Hassans law firm; Gertler claimed that the funds were transferred by the deceased out of the sums deposited with him by Gertner.
162. In the parallel arbitration award, the arbitrator analyzed the parties' arguments in this matter, and determined that the sums for the projects, amounting to $20 million, were indeed transferred by the deceased (some of them in favor of the deceased or other parties), out of the funds deposited in his hands by Gartner. In doing so, he ruled, inter alia, that "the plaintiffs [Gertner - the undersigned] are raising claims regarding the manner in which the money transfers were made, to Adv. Weinroth, who transferred them to Mr. Dan Gertler...  The money transfers were proven by real-time evidence, and confirmed by emails and correspondence sent by the parties to each other in real time...  Dan Gertler presented evidence from real time, and as stated, this is convincing evidence that the plaintiffs have not been able to refute ..." (paragraph 146.2 of the parallel arbitration award).  And later on, "the plaintiffs' version is inconsistent because it is inconsistent with the relationship arrangement agreement..." (paragraph 146.3 of the parallel arbitration award), and also: "My above determinations are sufficient to reject the plaintiffs' arguments in this matter, since they contradict real-time evidence, which creates a clear picture of the defendants' claims in the matter" (paragraph 146.6 of the parallel arbitration award) (emphases are not in the original).
163. In contrast to the rulings in the parallel arbitration, in the framework of the arbitration award in the present proceeding, the arbitrator did not accept the deceased's version that the sum of $20 million of the sums deposited in his hands by Gartner were transferred by him for the projects. It was determined that the deceased did not transfer the sums for the projects to Gertler, but rather that Gertner paid the funds for the projects directly to Gertler, in another way through the Hassans law firm.  Therefore, it was determined that the deceased must return the sum of $20 million in his possession to Gartner.  This is in addition to the return of the sum of $17.5 million that he held, for which the arbitrator rejected the deceased's version of the award on the basis of claims that they were used for fees and initiation fees that the deceased received.
164. The aforesaid analyses of the arbitrator in the present arbitration and in the parallel arbitration were based on evidence that is at least partly identical, but his conclusions regarding it are prima facie inconsistent. Thus, inter alia, and for the sake of illustration, in the parallel arbitration award, the arbitrator relied in his determination that the funds for the projects were transferred by the deceased, on an email message dated July 26, 2006 by Adv. Uri Bar of the deceased's office, in which, according to him, Adv. Bar wrote that "...  The first payment of $10 million was transferred to Mr. Gertler's group, and that a check for the same amount, i.e., an additional $10 million, is held by Adv. Weinroth, and in accordance with the agreement of the parties, this sum was transferred as part of the actual execution of the transaction, shares for a monetary consideration of $20 million, and this was also recorded in the share transfer notes" (paragraph 146.5 of the parallel arbitration award).  It was also added that Gartner's defense's argument in their summaries that "...  'Adv. Bar did not know the facts' and erred in the content, there is no substance in it" (ibid.) (emphases added).
165. On the other hand, as Weinroth's heirs point out, in the framework of this arbitration, the arbitrator ruled regarding that email message of Adv. Bar, that "I did not see in the aforementioned statement any support for Adv. Weinroth's version, since what emerges from it is that Bar, was not knowledgeable about the matters of payments that were transferred between the parties..." (paragraph 177 of the arbitration award).
166. Similarly, in both proceedings, Gertner presented notices from the Hassans firm, inter alia, dated November 17, 2009 and November 19, 2009 (i.e., not long ago, the money transfers themselves), regarding the manner in which the payment was made by them by Gartner to Gertler for the projects. In the parallel arbitration, the arbitrator rejected what was stated in these notices and ruled that it was an "unsigned certificate", that "this is not an official bank document from real time..."And that "...  The weight of this document is less than the real-time bank transfer documents presented and reviewed by me, as stated above" (paragraph 146.5 of the parallel arbitration award - regarding the document of November 17, 2009); and that "this is a document that is not a real time, but rather a late document that does not detract from the validity, and certainly not override, of documents from real time, including bank confirmations, agreements and correspondence from real time," which establish that the sum of $20 million was transferred from the deceased to Gertler (paragraph 146.6 of the parallel arbitration award - regarding the document of November 19, 2009) (emphases not original).
167. On the other hand, in the current arbitration, the arbitrator relied, inter alia, on the aforementioned notices of the Hassans Firm, and determined that from the documents of this firm it emerges "... that the transfer in the sum of $17 million, which is a payment for the Iron Or and the Booksite, was made through the Hassans firm, without connection to Adv. Weinroth" (paragraph 176 of the arbitration award) (emphasis added).
168. In the framework of paragraphs 90-97 of the motion for cancellation, as well as Exhibit M/1, the Weinroth heirs pointed to additional evidentiary details that were analyzed in an ostensibly inconsistent manner, in the framework of the parallel arbitration, as opposed to the manner in which they were analyzed in the current arbitration, and in a manner where, as stated, the final result, according to which in the parallel arbitration it was determined that the sum of $20 million was transferred out of the funds deposited with the deceased for the projects, is inconsistent with the determination in the current arbitration. According to which the deceased did not transfer the sums demanded for the projects, but rather these were transferred through the Hassans firm, and therefore the deceased must return this sum to Gartner.

The main arguments of the parties

168. Weinroth's heirs claim that the arbitrator's analysis of the question of where the funds for the projects were transferred was done by him as part of the parallel arbitration award over ten pages. Gartner himself devoted more than 30 pages of parallel arbitration summaries to showing that the funds for the projects were not transferred through the deceased.  According to the claim, they also argued in their summaries in the parallel arbitration that this was a question of importance to that arbitration.
169. It was further argued by the Weinroth's heirs that the evidentiary basis on which the arbitrator relied in the two proceedings was in fact identical or almost identical, since the same witnesses and documents were presented mainly in both proceedings, and additional evidence, as heard in the current arbitration, was not material. Thus, according to the arbitrator himself, who explained that he relied mainly on written documents and not on oral evidence, so that additional witnesses, insofar as they were heard in the arbitration against the deceased, do not have the power to change the determinations in the parallel arbitration award, towards contrary determinations in the present arbitration award.  All this, since the arbitrator also did not explain or explain the meaning of the various rulings in the two arbitration awards, and did not refer to what he said in the parallel arbitration award in the framework of the arbitration award in question, which was given about a year after the arbitration award in the parallel arbitration, according to what he said in the parallel arbitration award in which the opposite was stated.  All this, when any court order has not been added or changed between the date on which the parallel arbitration award was rendered, and the date on which the arbitration award that is the subject of this proceeding was rendered.
170. In light of this, it was argued by the heirs of Weinroth that the arbitration's determination in the parallel arbitration that $20 million of the funds held by the deceased was transferred to Gertler for the projects, amounts to an act of court and estoppel of the company, to which the arbitrator was obligated from the time it was determined that he must rule in accordance with the substantive law, and as the conditions for the estoppel of such a company are met from the time the litigation took place in the company that ended in an explicit decision. which was relevant for the purposes of the first arbitration award.
171. It was further argued that this is a defensive estoppel that applies in favor of a defendant who was not a party to the original proceeding in which the act of the court was created, and serves as a defense against the plaintiff who sues him in respect of an identical company, which was decided to the plaintiff's duty in the previous proceeding. Weinroth's heirs refer to this, inter alia, in Civil Appeal Authority 2812/13 Columbia Equipment and Photographic Supplies in a Tax Appeal v.  Delta Digital in a Tax Appeal (July 11, 2013).  Weinroth's heirs also refer to section 21 of the Arbitration Law, according to which an arbitration award binds the parties as an act of court, and that such a court act also applies to a person who was not a party to the proceeding.  To illustrate the stubbornness of the contradictory rulings, Weinroth's heirs wondered what things would have looked like if the two arbitral awards had been rendered on the same day, with their rulings opposite to each other.
172. It was further argued that a determination that the Weinroth heirs must return the sum of $20 million to Gartner, even though it was determined in the parallel arbitration that these were transferred by the deceased to Gertler, severely harms the Weinroth heirs, and enriches Gertner in an unjust way that he cannot stand.
173. With regard to all of the above, Weinroth's heirs emphasized that the parties, according to their claim, agreed that the same arbitrator would hear the two arbitrations, precisely because of the need to avoid contradictions in the determinations in the two proceedings. According to them, these were intertwined, evidence in one (for example: the testimony of the deceased in the parallel arbitration was also used in the present proceeding, even though it was cross-examined again in the present proceeding), was also used in another, and the present arbitration award often mentions what was stated in the parallel arbitration award.  It is therefore not possible that in circumstances in which the two arbitral awards were rendered by the same arbitrator, and according to them, on the basis of the same evidentiary material, their determinations would be reversed, which would harm confidence in the system, even if the arbitral awards were rendered about a year apart from each other.
174. In all the aforesaid circumstances, it was argued that grounds for cancellation apply by virtue of sections 24(3) of the Arbitration Law, as well as 24(7) of the Arbitration Law, since the arbitrator disregarded the substantive law as claimed, and ruled in contravention of the silence of the company to which he was subordinate. The cause of action was also argued in accordance with section 24(6) of the Arbitration Law, since the arbitrator did not allegedly explain the contradictions between the arbitral awards that were rendered.  It was further argued that the application of a cause of annulment by virtue of section 24(9) of the Arbitration Law, since an arbitral award that contradicts a previous final ruling is contrary to public policy.
175. Gartner argues that the claims should be dismissed. It was argued, inter alia, that the arbitrator's determination that the deceased did not transfer the amount for the projects is well anchored in the material and documents presented to the arbitrator, some of which were not brought before him in the parallel arbitration.  It was further argued that the two arbitrations were conducted as separate arbitrations, which was made explicitly clarified, as stated above, inter alia in the framework of clause 3(d) of the arbitration agreement, as well as in a letter of referral prepared to the arbitrator for the purpose of initiating the arbitration proceeding, as well as at the time when an application was made to the arbitrator Orenstein, who replaced the arbitrator Goren.
176. Gartner also points out that even the arbitrator himself clarified in his arbitration award that although the two arbitrations dealt with tangential matters, the determinations of each proceeding are based on what was established in its framework. The arbitrator was therefore aware of the linguistic difference between his rulings in the various rulings, and explained its source.
177. It was further argued that the witnesses in the two arbitrations were not the same witnesses, since in the arbitration in question affidavits of a number of additional witnesses were presented, additional documents were attached, and a factual body that is not identical was analyzed. The status of the deceased was also not identical in the two proceedings.  In the parallel arbitration, his words were heard as a witness; whereas in the arbitration we are dealing with him as a litigant, who served as a lawyer and as a trustee, and the weight of his testimony in the two proceedings was therefore not identical.
178. In addition, the decision in the parallel arbitration regarding the source of the funds used for the projects was not relevant to that arbitration, and therefore it does not create an act of court and establish estoppels.
179. It was argued that the heirs of Weinroth, in the aforesaid circumstances, in fact raise essentially appealing arguments, which ask the court to intervene in the arbitrator's discretion, and that even where contradictions or errors occurred, this does not establish grounds for intervention in the judgment. This is especially so, since the arbitration was not subject to the laws of evidence (as follows from Specification 14 of the First Addendum tothe Arbitration Law), and since the rule regarding the act of the court is procedural, and the arbitrator was not subject to it, and in any event, even if he erred in its application, this does not establish grounds for annulment.
180. It was further argued that Weinroth's heirs did not raise the argument regarding the existence of a court action in view of the determinations in the parallel arbitration award. This is despite the fact that the said award was given about a year before the current arbitration award.  According to them, the fact that the claim was not raised shows that in real time it did not occur to them that the said determinations create a company estoppel.  In any event, it should not be accepted that a claim that was not raised before the arbitrator can serve as a ground for annulment from the time the arbitration award was rendered.
181. In the background, it should be further noted that in the framework of the arbitrations that were conducted, Gertner claimed that Gertler's claim in the parallel arbitration, according to which the sum of $20 million of the funds deposited by Gertner was used by the deceased for the purpose of paying Gertler for the projects, was raised by Gertler out of self-interest as an untrue claim, in order to assist the deceased in his claims against Gertner, and in view of the various agreements reached by the deceased and Gertler in this matter.

Discussion

182. I do not see fit to accept the argument of the heirs of Weinroth that in view of the contradictions between the rulings in the parallel arbitration award and those in the present award, a cause of cancellation arises with respect to the sum of $20 million, which, according to the parallel arbitration, was transferred from the deceased to Gertler for the purpose of the projects; However, in the present judgment it was clearly determined that this was not the case.
183. In order to reach this conclusion, the fact that an examination of the parallel arbitration award shows that the determination of where the sum of $20 million came to Gertler for the projects was not required for the purposes of deciding the parallel arbitration. In this regard, it was explained above that Gertner's argument against Gertler regarding the projects in the parallel arbitration was that they were entitled to a refund of the amount they paid for these projects due to claims of misrepresentation, fraud, etc.  The problem is that the arbitrator rejected these arguments (see, inter alia, also in section 159.2 at p.  897 of the parallel arbitration award).
184. Once the situation was so, the outcome of the parallel arbitration would not have changed whether the amount in respect of the projects reached Gertler's hands from the funds deposited with the deceased, as determined in the parallel arbitration; and whether it came from the Hassans account, as determined in the framework of the arbitration in this case. In these circumstances, even if the issue was analyzed comprehensively (relatively, given that it consists of 10 pages of analysis, out of more than 1,200 pages of award) in the parallel arbitration award, it was not relevant to it, and the fact that it was analyzed does not teach otherwise.
185. It appears that the arbitrator also viewed the matter in this way in the framework of the parallel arbitration award. Thus, inter alia, he explained in his analysis of where the funds for the projects were transferred from, that "...  In my opinion, the parties' arguments, in this context and their elaboration, relate mainly to parallel arbitration [where, in this case, the parallel arbitration is the arbitration vis-à-vis the deceased - the undersigned]," and continued: "Therefore, I did not elaborate on the matter in the framework of my determination that the plaintiffs paid, in accordance with the agreement, in writing, $20 million for the rights they acquired in the two companies...  However, and in order for my work to be complete, I will briefly state the arguments of the parties..." (paragraph 146 of the parallel arbitration award).
186. A condition for the establishment of an estoppel is that the decision in the company in the previous proceeding in respect of which the estoppel was claimed to exist, will be essential to the decision in that proceeding. See Lekh Salzman, The Act of the Beit Din in a Civil Proceeding (1991) ("Salzman"), which explains (p.  193) (emphases not in the original):

"...  If the litigant against whom the estoppel claim is raised succeeds in convincing the court that the decision given in the previous trial was not essential to the judgment, and that it is only in the form of 'you said, by the way, a free addition that was added to that decision that was really needed to rule on the matter,' there is no longer any justification to silence the party from denying the finding that was determined and to rekindle the dispute."