Civil Appeal Authority 26220-12-24 Shmuel David Cohen v. Satmar Institutions Center Bnei Brak

Civil Appeal Authority 26220-12-24

Before applying for leave to appeal the decision of the Jerusalem District Court (The Judge A.  Ron) In a civil case 36383-06-24 [Nevo] As of October 1, 2024, in which the applicants' request for interim relief under Section 16(a)(5) of the Arbitration Law, 5728-1968 (hereinafter: Arbitration Law or The Law).

Background to the application

1. At the center of the dispute is an agreement dated October 16, 2001 (29 Tishrei 5762) (hereinafter: the agreement) which was envisaged to be a lease agreement, but the parties disagree as to whether this is indeed the case or whether it is a sale agreement. For the sake of good order, I will bring at this stage clause 32 of the agreement, which is claimed to constitute an arbitration agreement:

"A.  The parties hereby agree to submit all disputes that may arise between them in connection with this Agreement, its interpretation and performance, including its appendices, to the decision of a single arbitrator who will be the Rabbi of the Satmar Housing Authority or any rabbi chosen by the decision of the management of the Satmar Housing Authority in Bnei Brak (hereinafter: the "Arbitrator").

The arbitrator will not be connected to the substantive law, the laws of the procedure, or the laws of evidence, and will not be tied to time, and can rule on both the law and the settlement.

1. The arbitrator's decision is final and decisive.
2. The provisions of this section constitute a valid arbitration agreement between the parties within the meaning of the Arbitration Law , 5728-1968, and will not require any additional document for the application of arbitration between the parties."

For the sake of completeness, the Applicants also referred in their application to the "Regulations of the Letter of Undertaking" that was signed as part of the agreement, and in which an arbitration clause with a similar mechanism for appointing an arbitrator was established.

2. On June 17, 2024, the Applicants filed with the Jerusalem District Court "an urgent request for a temporary injunction (ex parte) and/or for the validity of the temporary injunction granted in arbitration" under section 16(a)(5) of the Law. The application was filed after interim relief was granted by Rabbi Moshe Perkowitz in the arbitration proceeding, who was claimed to have been authorized as an arbitrator by the "Satmar Housing Administration" (hereinafter: the Housing Administration), according to the mechanism for appointing an arbitrator as detailed in the agreement.  The reason for the request for temporary relief was an eviction demand received by the applicants on May 28, 2024, according to which they must vacate their apartment within 7 days.  The main arguments of the Applicants regarding the apartment that is the subject of the agreement, in which they have been living for about 25 years, is that the apartment is owned by them and not by the Respondents, since although the language of the agreement according to which they hold the apartment is suitable for a rental agreement, it is a sale agreement for all intents and purposes.  This is taking into account the significant payment made by the Applicants at the beginning of the period of the agreement; the absence of monthly rent payments, except for a negligible sum of about ILS 170; to the bylaws of respondent No. 4, which states that its purpose is to sell apartments to members of the community; And more.  With regard to the arbitration agreement, respondents 1-3 claimed that they were the authorized party for the appointment of the arbitrator (the Housing Administration).  However, to the extent that this interpretation is accepted, it is a unilateral change in the mechanism for appointing an arbitrator in the agreement and the arbitration clause, which constitutes a discriminatory condition in a standard contract under section 4(10) of the Standard Contracts Law, 5743-1982, which is liable to be annulled.  Therefore, since the applicants have been living in the apartment for about 25 years, and the eviction demand was submitted in a particularly short time frame, the balance of convenience is tilted in their favor.
3. On the other hand, according to the position of respondents 1-3, the language of the agreement indicates that it is a lease agreement and not a sale agreement, and therefore the applicants are not the owners of the apartment. In addition, and contrary to what is claimed, respondents 1-3 did not act unilaterally, but rather approached the courts openly and orderly due to illegal construction work carried out by the applicants in the apartment, and only after claims for eviction were raised did they claim for the first time that they were the owners of the apartment and not its tenants.  The Applicants also concealed from the Court the illegal construction activities that are at the center of the dispute and even the fact that Respondents 1-3 filed a claim with the Magistrate's Court (Civil Case 64804-05-24) [Nevo] against the Applicants in order to advance the resolution of the dispute.  Injunctions were also concealed in Civil Case 48623-04-24 [Nevo] dated May 16, 2024 and in Civil Case 64804-05-24 [Nevo] dated November 21, 2024, in which the arguments of Respondents 1-3 were accepted and an order was issued ordering the cessation of construction by the Applicants.  The aforesaid was done in order to advance the proceeding in light of the Applicants' conduct, and despite the fact that Respondents 1-3 are the authorized party (the "Housing Administration") to appoint the arbitrator in accordance with the arbitration agreement.  Moreover, the Applicants are silenced from claiming that there is an arbitration agreement between them and the Respondents, where they argued that such an agreement is null and void in other legal proceedings before the Tel Aviv Magistrate's Court.  Notwithstanding the aforesaid, the Applicants acted to promote an arbitration proceeding before an arbitrator by a body that is not a member of the Housing Administration unlawfully, and it granted temporary relief in a manner that exceeded its authority.  The arbitrator's decision was not even served on respondents 1-3.  The application should be dismissed out of hand even for lack of substantive jurisdiction, since the dispute revolves around the question of "possession and use of the land" and this is a matter within the jurisdiction of the Magistrate's Court.  It was also claimed that there was no local authority, since the apartment that is the subject of the dispute is located in Bnei Brak.  The choice to turn to a court in Jerusalem was intended to locate a court that was not yet familiar with the circumstances of the case, with the improper hope that it would relate more sympathetically to the applicants' claims.  Finally, the conditions for receiving temporary relief are also not met, since the applicants' claim is tenuous, and given that the eviction request by respondents 1-3 was heard in court, the balance of convenience also tends to reject the application.
4. Respondents 4-6 argued that despite the filing of the application, the main claim was not filed on time, neither to the court nor to the arbitrator, and therefore the application should be dismissed out of hand. Moreover, they are not a party to the agreement or the arbitration proceeding, and therefore there is no reason to grant interim relief against them under section 16(a)(5) ofthe Arbitration Law.  In addition, the Applicants argued in a proceeding before the Magistrate's Court that the agreement between the parties was a "contract for appearances" and was therefore null and void, as was the arbitration clause therein, in accordance with the provisions of section 13 of the Contracts (General Part) Law, 5733-1973.  Therefore, they are now silenced from claiming that there is a valid arbitration clause in the agreement.  Finally, the arbitration proceeding was conducted in a fictitious manner behind the backs of respondents 4-6 and without their knowledge.
5. On September 29, 2024, the District Court held a hearing in the presence of all parties. In summary, the parties once again raised their main arguments on the disputed issues: the appointment of Rabbi Perkowitz as arbitrator, the identity of the housing management and the various threshold grounds claimed by the respondents.
6. In its decision that is the subject of this proceeding, the District Court held that in the circumstances of the case, the arbitration agreement "never came into existence and does not exist." This is because no document was produced indicating the appointment of Rabbi Perkowitz as an arbitrator by the Housing Administration as required by the arbitration agreement. It was further held that the arbitration clause does not in itself constitute an arbitration agreement, since it does not explicitly state that it should be regarded as an arbitration deed and does not mention the identity of the arbitrator.  It may have been possible by virtue of it to apply to the court for the appointment of an arbitrator, but this was not done.  When it was determined that there was no arbitration agreement, the court turned to examine the various proceedings that were conducted and are being conducted between the parties and determined that the appropriate hostel is located there to clarify the applicants' claims.  This is with an emphasis on civil case 48778-06-24 [Nevo] , in which a claim for eviction of the applicants from their apartment was discussed.  In addition, the applicants' argument that the concealment of other proceedings from the court stemmed from forgetfulness justifies "slightly sad questions regarding their good faith." In addition, the Applicants argued against the validity of the arbitration agreement in the other proceedings that took place in their case, but now they are filing the application by virtue of it without any reasonable explanation, and even in this there is a reason for the defect.  Taking into account all of the above, the application was rejected and the temporary order was revoked.

From here to the application before me.