Civil Case (Jerusalem) 71355-05-25 Moshe Gertner v. Gezel Weinroth - part 6

And later on:

"How will the court before which the claim of estoppel arises examine whether there was indeed a decision in that company, the subject of the estoppel claim, essential for the purpose of establishing the judgment in the previous litigation? To this, Sussman responds...  Other Municipality Motions 581/72 Arbiv v.  State of Israel: 'The test is whether the judgment will stand, even if it deletes the finding of the trial court...'"

See also at p.  197:

"The test of the necessity of the finding requires, as stated, that there is a connection between the decision given in the company and the final decision given by the court in the action; In other words, it is not enough that the court referred in its judgment to the company in question and even made a finding about it, but it is also necessary that that determination was essential to the judgment, in a way without which the plaintiff could not rule on the claim...". 

187. In accordance with these tests, the different determinations between the two arbitral awards do not create silences, since the determination of the source of the funds transferred for the projects in the parallel arbitration did not change the outcome of the arbitral award there, which in any case rejected Gertner's claim regarding them. As stated above, this is in fact how the arbitrator saw the matter, who noted during his analysis that the question of the source of the funds transferred for the purpose of the projects is not in fact required for the purposes of deciding in the parallel arbitration.
188. Weinroth's heirs claim that it cannot be said that the question of what was the source of the funds for the projects was not important in the parallel arbitration, since in their summaries in the said arbitration, Gertner himself defined it as important, and even devoted more than 30 pages to it. I don't see things that way.  The fact that a party believes that a claim is important to him in the proceeding, before he knows its outcome, does not mean that this is the case at the time when a decision is rendered.  After all, once it has been determined that Gartner has no right to reimbursement for the amounts paid for the projects, the question of whether funds were paid for these projects and what their source originates, becomes irrelevant, even if before the decision was made things could have looked different.  To be precise: this is not a contradictory factual claim raised by Gartner in both proceedings.  On the contrary: in both they claimed that the source of the funds paid for the projects was not in Weinroth.
189. In addition to this, in practice, even in their summaries in the parallel arbitration, Gertner noted that the importance of the question regarding the source of the funds for the projects is ultimately limited, noting in this regard, as brought by the arbitrator himself, that "... After it became clear that out of the sums transferred to Adv. Weinroth in respect of the Tremalt and Nasergy transactions, only $13 million was credited in favor of the transactions, and that the balance of the sums remained in Adv. Weinroth's hands unlawfully, and were not transferred to Mr. Gertler, the importance of the said dispute decreased, since the funds are claimed from Adv. Weinroth in the framework of the parallel arbitration" (paragraph 146 of the parallel arbitration award).  As the arbitrator notes, Gertler also argued that the question of the source of the funds in the arbitration before him was of no importance (see ibid.).
190. In the aforesaid circumstances, even if the determinations regarding the source of the funds for the projects differ in the two arbitrations, the aforesaid does not establish grounds for annulling the arbitration award. After all, the court does not sit as a court of appeal against the arbitral award.  Therefore, even if it is argued that the determination of different findings in the two proceedings would have allowed an appeal against the arbitration award rendered, if it had been a judgment, while calling on the appellate court to intervene in the manner of analyzing the evidence or the conclusions that arise from it, the arbitrator's error in analyzing the evidence (or an error in general) does not establish grounds for intervening in an arbitral award.
191. Although the aforesaid is sufficient to reject the claims of the Weinroth heirs regarding the sum of $20 million, it should be noted above necessity that it should be noted that the arbitrator was aware of the different points of convergence between the two arbitration awards, and even of the possibility that the determinations in one proceeding will not necessarily correspond to that in the other. Thus, in the framework of the parallel arbitration, the arbitrator explained that "...  The determinations in this arbitration award are in accordance with the law of the arguments and evidence presented by the parties to the arbitration, and they do not obligate the parallel arbitration.  These are two separate arbitrations in which the parties are not identical, and therefore, I do not determine anything in this arbitration award in relation to the parallel arbitration, in a positive manner" (paragraph 50 of the parallel arbitration award).
192. A similar explanation was also given in the arbitration in this case, in which the arbitrator noted, inter alia, that although the two arbitrations sometimes dealt with similar or tangential issues "... The determinations in each arbitration were made in accordance with the evidence presented by the parties in that arbitration, and are not based on what was determined or presented in the other arbitration unless expressly stated otherwise...  The determinations in this arbitration were in accordance with the evidence presented in this arbitration, and not in light of the determinations and evidence in the parallel arbitration" (paragraph 46 of the arbitration award).  And later on: "...  Although there were interfaces between the arbitrations, then given that the parties to the arbitrations are not identical, different, different evidence was presented, with the determinations in each arbitration being made in accordance with the evidence submitted in that arbitration" (paragraph 71 of the arbitration award) (emphases not in the original).
193. Weinroth's heirs argue that the arbitrator cannot nullify the rules of the court's action, insofar as they are binding in the arbitration at hand, by stating that he sees the two arbitrations as separate. After all, the estoppels exist by virtue of the law, and the decision of the panel that he does not consider himself subject to them does not exempt him from this.  Therefore, Weinroth's heirs claim that the arbitrator deviated in his determination that the parallel arbitration does not create a court action from the authority given to him, which obligated him to rule in accordance with the substantive law, and therefore a cause of annulment also arose in the matter under section 24(3). 
194. However, as explained above in our case, there is no estoppel, so that the arbitrator's words that his rulings in one arbitration are not binding on the other (which in any case were stated in the framework of the parallel arbitration that it is not on the agenda in this proceeding), at least in the matter at issue here, were not intended to exempt him from the estoppel rules (to the extent that they apply); Rather, explain the fact that there may be different determinations and findings in each of the arbitrations, taking into account the arbitrator's argument and the different evidence presented in each proceeding before the arbitrator.
195. The arbitrator did not specify a separate reference to each different finding in each of the proceedings, while explaining why it is not identical to what was determined in the other arbitration, but it cannot be said in such a situation that no explanation was brought for the existence of different findings, and this is to the extent that it is concluded that the arbitrator was tasked with giving an explanation or reasoning to the matter, which is also not required by reality, given that we are dealing with two separate proceedings. and in the determinations in the parallel proceeding, which have no effect on the proceeding at hand.  Therefore, even a cause of action by virtue of section 24(6) of the Arbitration Law, which concerns the lack of reasoning, does not exist.
196. In any event, an examination of the tractate that was before the arbitrator in each of the proceedings further clarifies that it was indeed not identical, which may explain why the findings in the two arbitrations were not necessarily identical. Thus, as Gertner pointed out, with regard to the source of the funds used for the projects, in this arbitration Gertner presented evidence that was not presented to him in the parallel arbitration.  These included the affidavits of four other witnesses, as well as documents relating to the money transfers that were made.  Weinroth's heirs claim that the aforementioned additional evidence was immaterial, inter alia, since some of the additional witnesses from whom affidavits were brought were not examined, and in any event, the arbitrator explained that he did not find much weight to be attributed to the testimonies of witnesses, as opposed to documents.  However, as detailed below, an examination of the matter shows that at least certain documents that were transferred in the framework of the arbitration in question, and which did not constitute part of those submitted in the parallel arbitration, were important for the analysis of the source of the funds.
197. In this regard, it should also be remembered that the question of why the sum of $50.5 million was deposited in the hands of the deceased in the first place was not the focus of the discussion in the parallel arbitration, since these funds were not claimed in the framework of it by Gertner from Gertler, and there was no dispute that the payment made for the Termalt transaction (in the amount of $350 million) was transferred by Gertner other than through these funds. On the other hand, a central question in the current arbitration was why the sum of $50.5 million was deposited in the hands of the deceased.
198. The arbitrator devoted a very extensive analysis to this question over the course of dozens, if not hundreds, of the arbitration award, while at the end of the day he determined that the sum was deposited in the hands of the deceased for the Termalt transaction (as well as another transaction, called Nasrji). See, in this regard, the analysis in paragraph 102 onwards of the arbitral award (starting at p.  162), and its conclusion in this matter is spread in a considerable number of places throughout the arbitral award (see, as examples only, at pp.  174, 177, 180-181, as well as 342, etc.).  All this despite the fact that, as stated, the said sum (except for the sum of $13 million) was not used for these transactions at the end of the day.
199. On the question of the purpose of the transfer of the funds to the deceased, the arbitrator was presented with real-time documents (i.e., the year 2006), which indicated that the purpose of the transfer was indeed for the Termalt and Nasergy transactions (see, inter alia, the arbitrator's analysis at pp. 341-345 of the arbitration award, where the arbitrator refers to the said documents).  These documents did not constitute part of the evidence presented in the parallel proceeding.
200. From the time it was determined that the deposit of the sum in the hands of the deceased was made for the Termalt and Nasergy transactions, thus also negating Weinroth's claim that it was intended to be used to pay for him for initiation fees; It is clear that this led to the conclusion that the said funds were not used for the purpose of the projects, and therefore that the financing of the projects was done from another source, i.e., through the Hassans Office.
201. Thus, the tractate of the plaintiff and its focus were different in each of the two proceedings. Weinroth's heirs emphasize that the analysis of the source of funds for the projects, which they say is based on similar evidence, led the arbitrator to contradictory results in each of the two proceedings.  However, not only was the evidentiary body in the matter not identical, but in the arbitration at hand, another issue was also discussed at length, which was not important in the parallel arbitration, namely why the funds were deposited in the hands of the deceased in the first place.  From the moment it was determined that this deposit was made for the Termalt and Nasergy transactions, this led to the conclusion that the funds were not used for the purpose of the projects, while this layer was not discussed in the same way in the parallel arbitration.  See also section 12 at p.  480 of the arbitration award.
202. It follows from the aforesaid that even though there are seemingly contradictory findings between the two proceedings, given evidence and a different focus of things in each proceeding, these are ultimately understandable; While the arbitrator as aforesaid was aware of the possibility of the existence of such non-conformity, and therefore explained its origin. All this, insofar as it is necessary to explain the meaning of the contradiction, which is not required by reality, given that the arbitrations were separate, and in any event, the existence of a mere error in an arbitration award, does not, as stated, constitute grounds for its annulment.
203. To the aforesaid rule, it should be added that the question is whether it is at all possible to claim the existence of an act of court where the two proceedings were conducted in parallel, and it was not requested by the heirs of Weinroth to delay the arbitration in this case, until a decision was made in the parallel arbitration, to the extent that they believed that its rulings could create estoppel. In this regard, Salzman explains that: "...  If the defendant did not make this claim, but allowed the proceeding to continue in the second action, then even if a judgment has already been given in the first action, the defendant can no longer silence the plaintiff in the second action on the grounds of an act of court.  Since he did not make a claim for the delay of the second proceeding, the defendant missed the opportunity to argue that the cause of action should be silenced..." (p.  105) (and see also Civil Appeal 9542/04 Rotem Insurance Company in a Tax Appeal Managed by Authorized Management v.  Dori Nahum (January 2, 2006) at para.  8).
204. Even if we ignore the aforesaid, the arbitrator's rulings in the parallel arbitration award were given as aforesaid as early as April 22, 2024. Weinroth's heirs, however, did not see fit to argue before him in the framework of the current arbitration that these determinations establish a company estoppel that obliges the arbitrator to determine that out of the funds entrusted to the deceased, 20 million was transferred by him to Gertler for the projects.  Even if on the date on which the parallel arbitration award was rendered, all the summaries of the parties had already been submitted in the framework of the arbitration in this case, nothing prevented the Weinroth's heirs from requesting to raise the aforesaid claim before the arbitrator, and all the more so when, as aforesaid, an additional year had passed before the arbitration award was given in the present proceeding.
205. Gertner argues that it is not for nothing that Weinroth's heirs did not raise the claim of estoppel before the arbitrator in real time, since it was clear to them that it was not true in the circumstances of two separate arbitrations, with a different evidentiary body and different questions on the agenda. Whether this is the case or not, there is indeed a difficulty in arguing that the arbitrator ruled contrary to the silence of the company to which he was obligated according to the claim, without a claim of this kind being raised before him.  See, for example, Civil Appeal 49/63 Avraham Zucker v.  Yeshayahu Leibowitz (February 13, 1964): "The court does not supervise the act of the court on its own initiative, but only where it was argued before it that the matter had already been discussed." The one who is charged must also go up at the first opportunity.  See, for example, Salzman, at p.
206. In all the aforesaid circumstances, the question of whether, since the arbitrator was not subject to the laws of evidence, the rules of the act of the court applied to him. Gertner argued that the rules of court action are a procedural matter, and therefore even though the arbitrator should have ruled in accordance with the substantive law, he was not subject to them.  In this regard, Gartner referres, inter alia, to Civil Appeal 2035/03 Lev Jasmine in Tax Appeal v.  G.I.  In the tax appeal (14 June 2004) it was noted that "the possibility given to the parties to an arbitration agreement to condition the rule regarding an act of court stems from the procedural nature of this rule, whereby any party in the framework of legal proceedings can waive the application of the rule..." (v.  4).
207. Weinroth's heirs, on the other hand, argued that the fact that an arbitration award establishes an act of court stems from section 21 of the Arbitration Law, and that in any event, this is a substantive rule whose purpose is to prevent conflicting decisions.
208. As stated, in the circumstances of the case, a decision on the question of the exact classification of the rule regarding the act of the court, whether it is substantive or procedural, is not required, given the conclusion that even if the arbitrator was subject to this rule, the act of the court does not exist in our case since the determinations in the first arbitration on the issue of the source of the funds used for the projects were not required for that proceeding, and since in any case the argument was not raised before the arbitrator at all. I will note, however, that it appears that in order for the parties to be considered as having stipulated the rule regarding the act of the court that creates the arbitral award, the fact that it applies in the matter of section 14 of the first addendum (regarding the absence of subordination to the laws of evidence) is not sufficient, and there is a need for an explicit stipulation in the matter, which does not exist in our case.  It should also be noted that Gertner's argument that in view of the terms of the arbitration agreement does not apply in our case, their position that the Weinroth heirs should be seen as personally bound by the arbitration award, in view of the provision of section 21 of the Arbitration Law, which states that an arbitration award will bind the parties and their successors as an act of court.
209. I also find it appropriate to reject the argument of the heirs of Weinroth that the contradictions between the arbitral awards give rise to grounds for annulment by virtue of section 24(9) of the Arbitration Law. In this regard, Weinroth's heirs referred to the Civil Appeals Authority 66946-01-25 Projects Initiation and Construction Enterprises (TAMA 38) in a Tax Appeal v.  Gavriel Balmas in a Tax Appeal (April 29, 2025), according to which where an arbitration award contradicts a final judgment, this may give rise to grounds for its annulment, and that "...  When positive determinations in a final judgment are contradicted in an arbitral award 'in a manner that effectively empties that judgment or decision of its content'...  The arbitration award is even contrary to public policy." See also Civil Appeal Authority 10487/07 Amidar National Housing Company in Israel in Tax Appeal v.  Zohar Chai (May 5, 2010).
210. Indeed, there are contradictions in the factual findings between the two arbitral awards. However, these stem, as explained, from the differences between the parties, the difference between the evidence presented in each of them, and the difference in the tractate that each proceeding focused on.  The arbitrator was aware of the possible points of convergence between the proceedings, as well as of the possible existence of various determinations, and explained their origin.  Contrary to the claim of the Weinroth's heirs, the proceedings were indeed conducted before that arbitrator out of a will, presumably, that, given the broad tract on the agenda, they would be decided before the same panel that would be familiar with the tractate in question.  However, it was expressly agreed as detailed above, that the proceedings would be separate.
211. In such a situation, I do not believe that circumstances have arisen that give rise to a claim for annulment because the arbitral award is contrary to public policy, which is a cause whose scope of interpretation is limited from the outset. See, for example, Civil Appeal Authority 403/05 Yehud Religious Council v.  Peer Engineers in Tax Appeal (September 12, 2006).
212. It also appears that the application of the rule regarding the annulment of an arbitral award on the ground of section 24(9) of the Arbitration Law due to a contradiction to a final ruling, derives from the rules of the act of the court (see, for example,
     CA 4479/19 Muhammad Burkan v.  Musa Ibrahim Mahlus (15 December 2019)).  For this reason as well, it has no place in our case, since, as explained above, the determinations that are the subject of the contradictions in the parallel arbitration award were not required for the purpose of deciding it, and therefore they do not amount to estoppel, in such a way that a decision contrary to them is contrary to public policy.
213. In summary, the claims of the Weinroth heirs for the existence of grounds for annulment by virtue of sections 24(3), (6), (7) or (9) of the Arbitration Law with respect to the contradictions between certain determinations in the parallel arbitration award and those in the present arbitration award are rejected.
214. Addressing Additional Claims
215. For the sake of good order, the following is a brief reference to additional arguments raised by Weinroth, which do not lead to the annulment or change of the arbitration award:
216. First, in view of the arguments they raised regarding the contradiction in the arbitration award in the present proceeding, as opposed to the rulings in the parallel arbitration award, and this regarding the sum of $20 million that was allegedly used for the projects, Weinroth's heirs requested, in the framework of the motion for annulment, to annul the entire arbitration award, i.e., also with respect to the additional $17.5 million deposited in the hands of the deceased. This is since they claim that the existence of a number of defects and deficiencies that go to the root of the matter in the arbitration award, necessitate the cancellation of the arbitration award in its entirety.  In addition, the contradictions in the arbitration award make it tainted, as claimed, illegal, which also requires its complete annulment.  It is needless to explain, however, that since the arguments regarding the annulment of the part of the arbitration award in which there are contradictions to the rulings in the parallel arbitration award have been rejected, the demand for its cancellation in its entirety for this reason should be rejected, all the more so.
217. Second, Weinroth's heirs claim (in response to their reply) that in practice there is no positive determination in the arbitration award that the sum of $20 million that was deposited in the hands of the deceased, which was determined that they were not used for the purpose of the projects, was allowed to be in his hands.  In this regard, they point to evidence indicating that, according to them, the sum in question was transferred from the deceased to Gertler.  There is no basis for this claim, which appears to have not even been raised in the framework of the cancellation request.
218. As Gartner points out, the bottom line is that the arbitrator ruled in paragraph 182.2 of the award that the sum of $37.5 million out of the total of $50.5 million, is the sum of "... that Adv. Weinroth is not entitled to it and must return it." This was therefore also determined in section 183 of the arbitration award.  Weinroth's heirs also interpreted what was stated in the arbitration award in this way - see paragraph 30 of the affidavit in support of the request for annulment.  These determinations did not come in a vacuum, but rather following an analysis of hundreds of pages of rulings that preceded them, in which it was explained that, contrary to the deceased's claim, he did not receive the sums for the purpose of transferring them for the projects; In practice, the sums for the projects were also not transferred from the funds deposited in the deceased's account, and hence - they remained in his hands and he must return them.  In this state of affairs, it is certainly not possible to turn to one kind or another of the evidence referred to by the heirs of Weinroth, which points to their position that the sum was transferred from the deceased to Gertler, in order to interfere with the arbitrator's determinations, and it does not provide grounds for cancellation.
219. Third, in the framework of the response to the response submitted by them, Weinroth's heirs further argued that the arbitrator's determination should also be revoked with respect to the sum of $17.5 million deposited in the hands of the deceased. Regarding this amount, the arbitrator rejected the deceased's claim that it was initiation fees and salaries to which he was entitled, and ruled as explained above that the sum was transferred to him as seriousness fees for the termalt transaction, even though it was not used at the end of the day for this purpose.
220. According to Weinroth's heirs, the arbitrator rejected the argument that it was a matter of initiation fees, on the basis of a finding that the issue of initiation fees was not raised prior to the date on which it was first raised by the deceased during a meeting held with him on October 28, 2012. However, according to them, the evidence on which the arbitrator based his aforementioned conclusion actually shows that the issue of initiation fees was on the agenda even earlier, since it was a request by Gertner to the deceased in which he was asked to obtain details "with regard to introductory/brokerage fees due to the conclusion of the transactions or part thereof before the parties."
221. I do not see the need to go into the analysis of the claim. It was not part of the motion for annulment, and in any event, it is a clearly appealable argument, which has no place in a proceeding seeking to annul an arbitration award, and does not establish grounds for doing so.  Beyond what is required, and as Gertner explains in response to this argument, the arbitrator also extensively analyzed the deceased's claim to entitlement to initiation fees, in various aspects, and rejected it with extensive reasoning, which is based on various aspects of analysis.  According to them, Weinroth's heirs read what was stated in the request for details is incorrect, since it referred to the funds that the deceased received from Gertler.  Either way, it is clear that there is no room to intervene in such determinations, even if it is claimed that they are wrong.
222. Fourth, Weinroth's heirs further claim that in the parallel arbitration award, the arbitrator expressed surprise as to how the sum of $50.5 million was transferred to the deceased for the termalt transaction without being used at the end of the day for that purpose (i.e., "by mistake"); this is when in the current arbitration he accepted that the sum was indeed transferred to the deceased for the purpose of the termalt transaction (Vanserji). Here, too, I see no reason to accept their argument, and what was said above regarding the contradiction regarding the source of the transfer of the sum of $20 million is also relevant here.
223. Moreover, as already explained above, in the parallel arbitration, the question of for what purpose the sum of $50.5 million was transferred to the deceased, was not at the center of the dispute, and was not required for the purposes of its decision, since this sum was not claimed from Gartner in that proceeding. It is therefore clear that the parties' investment in analyzing this question was less in that proceeding; In any event, the arbitrator's analysis, and his various statements, insofar as they were regarding the purpose of transferring the said sum to the deceased, cannot bind him at the time when he came to make findings on the matter in the present arbitration.

Conclusion

223. In light of the aforesaid and detailed above, I deem it advisable to approve the arbitration award in its entirety, insofar as it relates to the estate of the deceased. However, with regard to the personal liability of the Weinroth heirs to the amount awarded, in accordance with what is stated in section 150 above, the matter is returned to the arbitrator's decision, after hearing the arguments and evidence of the parties, all as he sees fit.
224. Although the request for cancellation was partially granted, a significant part of it was rejected, and the arbitration award was also approved with respect to the deceased's estate, in contrast to the manner requested in the framework of the cancellation request. Under these circumstances, Weinroth's heirs will bear the expenses of GertNer in the amount of ILS 118,000.

Granted today, 9 Adar 5786, February 26, 2026, in the absence of the parties.