Rabbi Moshe Avram Dadoun v Yitzchok Biton
| Jurisdiction | England & Wales |
| Judge | Mr Michael Green |
| Judgment Date | 13 December 2019 |
| Neutral Citation | [2019] EWHC 3441 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC-2015-002841 |
| Date | 13 December 2019 |
On Appeal from the Beth Din of the Federation of Synagogues
In the Matter of an Arbitral Award Dated 4 April 2014
[2019] EWHC 3441 (Ch)
Mr Michael Green QC
(sitting as Deputy Judge of the Chancery Division)
Case No: HC-2015-002841
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Steven Woolf (by direct access) for the Claimant
Ms Giselle McGowan (instructed by RIAA Barker Gillette) for the Defendant
Hearing date: 27 November 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Michael Green QC
Mr Michael Green QC:
Introduction
This is an appeal pursuant to section 68 of the Arbitration Act 1996 (the Act) challenging an arbitral award dated 4 April 2014 (the Award) of the Beth Din of the Federation of Synagogues in London (the Beth Din) on the grounds that there was a serious irregularity affecting the tribunal, the proceedings or the Award. The Beth Din is a Jewish Rabbinical Court and it can be used by Orthodox Jews to arbitrate their commercial disputes, as happened in this case. The Beth Din consists of three Dayanim (or Judges) and they make their decisions by reference to Halacha, which is Jewish Law and Jurisprudence, rather than English civil law.
The sole basis for the appeal concerns alleged apparent bias on the part of the “ Rosh” or Head of the Beth Din, Dayan Yisroel Lichtenstein. There is no dispute that Dayan Lichtenstein spoke to the brother of the Defendant, Rabbi Daniel Biton, in June 2013 (the discussion). The Claimant says that the discussion, which he only discovered had taken place in 2017, is highly suspicious and led to a serious irregularity affecting the Award. The Defendant says that the discussion that Dayan Lichtenstein and Rabbi Biton had was insignificant, very short and simply concerned the timing of the Award being issued, as by then it had been 5 years since the oral hearing had taken place before the Beth Din. I heard evidence from both Dayan Lichtenstein and Rabbi Biton as to the content of their discussion.
The Claimant also challenges the Award under s.69 of the Act on a point of law, although that part of the claim is presently stayed and is not before me.
Background to the Dispute
The underlying dispute determined in the Award relates to the shareholdings in a company called RSM Ltd Property Investments Limited ( RSM) and the Defendant's entitlement to any profits from RSM. I heard no evidence in relation to the underlying dispute and I take these brief facts from the parties' skeleton arguments and the Award. The material events are now over 20 years old.
In December 1997, the Claimant and Mr Shlomo Friedman were the only shareholders in RSM and another company, Chaplin Walk Limited ( Chaplin). Each company owned and managed one property: RSM owned a property in Golders Green, London; and Chaplin, a property in Southport, Merseyside.
On 14 December 1997, a Memorandum of Agreement was signed by the Claimant, Mr Friedman, the Defendant and the Defendant's brother, Rabbi Biton. The Memorandum of Agreement provided for a quasi-partnership between the four parties in which the principal terms were for the Defendant and his brother to invest a total of £275,000 for a 50% shareholding in each of RSM and Chaplin. This would leave the Claimant and Mr Friedman with the other 50% in each company.
On 18 December 1997, the Defendant transferred £275,000 to the Claimant's solicitor. The Defendant's evidence was that he understood that the £275,000 would be repaid by the companies as soon as a mortgage was obtained by them.
In August 1999, the Claimant acquired a loan of £250,000 by mortgaging his own home. Of this sum, the Claimant paid £120,000 to Mr Friedman to purchase his shareholdings in the companies. The remaining £130,000 was paid to the Defendant and the purpose of this payment forms the subject-matter of the dispute. The Claimant's case is that he paid the £130,000 to purchase the Defendant's 50% shareholding in RSM which the Claimant thereafter would wholly own. The Defendant however maintains that the loan was actually obtained on behalf of the partnership and was a part-repayment of the Defendant's investment of £275,000. The Defendant was therefore claiming that he was still owed £145,000 and that he retained his 50% shareholding in RSM.
Nothing seemed to have happened for five years until in November 2005, the Defendant engaged lawyers to commence legal proceedings against the Claimant. The Claimant then applied to the Beth Din for a restraining order to prevent the Defendant from proceeding in Court. The Beth Din issued the restraining order and Court proceedings were not commenced.
On 6 March 2008, the parties agreed that their dispute should be referred to arbitration by the Beth Din. On 2 June and 4 August 2008, the Beth Din, consisting of three Dayanim 1, including Dayan Lichtenstein, heard submissions and evidence. In his oral evidence, Dayan Lichtenstein said that they continued to receive documents and evidence, including hearing further evidence in Israel on one occasion, until around 2011. He also said in his written evidence that:
“During the intervening period, there were numerous attempts made by intermediaries and “honest brokers” on the part of both parties to try to resolve the matter outside the formal Arbitration but ultimately no agreement could be reached and it was necessary for the Beth Din to give an Award.”
Eventually the Award was issued on 4 April 2014 (it was apparently only formally “released” to the parties on or about 1 September 2014), nearly six years after the initial oral hearing. The Beth Din largely found in favour of the Defendant, concluding that the Defendant retained his 50% shareholding in RSM and was therefore entitled to 50% of the income from both properties owned by RSM and Chaplin. The Beth Din quantified the sums owed to the Defendant based on his entitlement at £213,150.
On 4 June 2015, the Claimant issued the Claim Form seeking to appeal the Award, at that stage only pursuant to s.69 of the Act. There then followed some procedural wrangling concerning service out of the jurisdiction (the Defendant is resident in Israel).
On 8 March 2017, the Claimant became aware of the meeting that had taken place between Dayan Lichtenstein and Rabbi Biton and sought to amend his Claim Form to
include an appeal under s.68 of the Act. On 27 September 2017, Deputy Master Pickering granted the Claimant permission to challenge the Award under s.68 of the Act and to re-amend the Claim Form. At the same time, the Deputy Master stayed the appeal under s.69 of the Act.The Discussion
In the Claimant's witness statements, there were two allegations of apparent bias by Dayan Lichtenstein: the primary allegation concerned the contents of the discussion in June 2013; and there was also an allegation that the provision of a witness statement of Dayan Lichtenstein on the s.69 appeal on behalf of the Defendant was further evidence of apparent bias. Mr Steven Woolf on behalf of the Claimant confirmed at the hearing that the Claimant does not rely on the witness statement allegation and the appeal is purely based on what was discussed between Dayan Lichtenstein and Rabbi Biton in June 2013 and the fact that the discussion was not disclosed.
(a) The 23 July 2013 letter
In January 2017, the Claimant was granted access to the documents retained by the Beth Din in relation to the Award. In amongst the files of documents, the Claimant discovered a letter from the Defendant to Dayan Lichtenstein dated 23 July 2013 (or 16 Av 5773 in the Jewish calendar). This long 17 paragraph letter, written in Hebrew, revealed that there had been a meeting between Dayan Lichtenstein and the Defendant's brother some four weeks earlier and that Rabbi Biton had written to Dayan Lichtenstein a week before this letter. It is not disputed that none of this had been disclosed to the Claimant either at the time or any time thereafter.
The letter of 23 July 2013 is the only contemporaneous document in relation to the discussion. The first two paragraphs are material as it is there that the discussion is mentioned. The letter is addressed to “ Your Honor, The Israel Court of Justice” and it is headed “ Subject: Ruling on the claim Biton-Dadoun”. The first two paragraphs read as follows (in their English translation, with underlining added):
“1. My brother, Rabbi Daniel, may he live a long and healthy life, brought to my attention the content of the discussion he held with the honorable President of the Court, Rabbi Ya'acov Lichtenstein, may he live a long and healthy life, on the 17 th day of Tammuz, this year. Furthermore, [he also brought to my attention] the content of his letter that he dispatched to the honorable President of the Court on the 11 th day of Av, this year.
2. According to that stated by Rabbi Daniel, I was informed that the honorable President of the Court promised him that this time it is a final promise (after in the past, there were promises that were not honoured) and that the verdict will be handed down even before the 9 th Day of Av in the year 5773 (2013). Today, when I approached my brother with a request to contact you to speed up the materialization of the ““Promise”” (double inverted commas), his response was: “My brother, I am unable to help you any further with respect to this matter, Go ahead and do what you deem fitting”.
The letter continued in what was a somewhat aggressive diatribe to complain bitterly about the delay in the Beth Din providing its Award. The...
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...Rabbi Moshe Avram Dadoun v Yitzchok Biton [2019] EWHC 3441 (Ch), the High Court dismissed an appeal against an arbitral award (the Award) of the Beth Din of the Federation of Synagogues in London (the Beth Din) under s68 of the Arbitration Act (the Act). While there were unilateral an......