Commercial Arbitration and Quorums

 

HOW SERIOUS IS THIS !

Members of the Knesset look askance when the Supreme Court takes what they consider to be a too activist role. This is understandable, as after all, the Knesset members are the elected representatives. There can be no question as to the legitimacy of their decision making in passing laws. Take for example the passing of the Amendment to the Arbitration Law. This was a sincere attempt to bring the law of more socialist times into line with today’s business environment of free trade and big business.

There were five committee meetings to discuss this amendment.

Apart from staff, advisors and arbitration firms in attendance, the Members of the Knesset who participated were as follows:

on the 16^th October, 2007     –  3 members, Menachem Ben Sasson, Amira Dotan and Gideon Sa’ar

on the 18^th December, 2007  –  3 members, Menachem Ben Sasson, Amira Dotan and Gideon Sa’ar

on the 24^th February, 2008    –  2 members, Menachem Ben Sasson, and Gideon Sa’ar  

on the  3^rd june, 2008             –  3 members, Menachem Ben Sasson, Yitzhak Levi and Gideon Sa’ar

On the 29^th October, 2008     –  5 members, Menachem Ben Sasson, Amira Dotan, Avraham Michaeli, Gideon Sa’ar and David Rotem

For the 2^nd and 3^rd reading  of the law on 5.12.2008 there were four Knesset Members present: Mohammad Barakeh   – ( the Speaker ),   Menahem Ben-Sasson,  Colette Avital,  Reuvan Rivlin

The meeting closed at12.36 AM. Happily for the promoters of the Amendment to the Arbitration Law,  the protocol does not include the results of the voting. (www.knesset.gov.il/plenum/data/06566208.doc)

There is no need for a Quorum at Knesset committee meetings or the Knesset plenum.

Which reminds me.  

MK Ahmed Tibi’s Multiple Personalities

Deputy Speaker Tibi announced that the next speaker would be MK Tibi. Because no other Deputy Speaker was in the building MK Tibi asked Deputy Speaker Tibi if he could have special permission to give his speech from the Speaker’s chair. Deputy Speaker Tibi announced that he authorized MK Tibi’s request and asked that the Knesset pretend that MK Tibi’s request did not come from the Speaker’s chair. Justice Minister Ya’akov Neaman asked Deputy Speaker Tibi if this would cause a conflict of interest. Deputy Speaker Tibi agreed it would, he said he had considered delaying the motion until another deputy speaker arrived, but because it was a special day, the world cup semifinal, he decided against it. MK Shai asked Deputy Speaker Tibi what would happen if MK Tibi caused a disruption. Deputy Speaker Tibi responded that if MK Tibi caused a disturbance that he would call MK Tibi to order and remove him from the plenum. MK Tibi started his speech by thanking the Deputy Speaker. At the end of his speech Deputy Speaker Tibi thanked MK Tibi for not going over his time limit. (knessetjeremy.com/…/knesset-day-31)

Dr. Peretz Segal

In 2007  Dr Peretz Segal, who is the director of this Center for Mediation, was invited as the Justice Department representative to speak at one of the Constitution and Law  Committee meetings on the subject of arbitration

 Dr. Peretz Segal had this to say

I want to say a couple of things about the bill; not everyone at the Ministry of Justice sees eye to eye on this. The way I see it, the objective here is not to create a forum of appeal but to empower arbitration. Our objective is not the appeal, but to uphold the status of the arbitrator and make sure that any appeal will be limited to an obvious mistake

In the introduction to one of his books the Ramban wrote:  “The wisdom of law is not that of mathematics” (actually he said astronomy). No one guarantees that a high court judge is wiser and more understanding or will arrive at a more just decision than in arbitration 

Actually we are improving the arbitration system, as at present the appeal clauses don’t allow us to correct an arbitrator’s award. This additional path is supposed to give more weight to the award of the first arbitrator because it can be corrected. And how do we do that?  If we see that indeed there is an obvious mistake we will correct it.  If the alternate arbitrator/s unanimously agree that there is a mistake, they can correct it. If it is not unanimous, the original arbitrator’s award is binding.  That is the essence of arbitration. Arbitration after all is based on the disputing parties’ belief in the arbitrator

The parties rely on three elements when appointing an arbitrator

The first element is his sphere of expertise. This is not like the court, where one doesn’t know who the judge will be, or how knowledgeable he is or isn’t, as if the case will be an open book to everyone who knows the law. Yet there are specialists and non-specialists, especially when the dispute is about mechanics or finance, or subjects not connected with law. There is no basis to suppose that whoever makes a decision on the matter won’t be an expert in the field, for instance a doctor in the field of medicine rather than a judge who depends on an expert’s opinion. That is one of the basic elements of arbitration 

The second element of arbitration is how fair or unfair, and how honest or dishonest the person is. The parties have the ability to check this.  It is true that not everyone has the resources to do this. One cannot say that this won’t be addressed by the law of contracts, but by just canceling the award. This doesn’t correct the arbitrator’s award, it just cancels it altogether.  And it is doubtful if this is the right way to deal with whether the parties really have similar bargaining power at the commencement of arbitration

The third element is judgment. Has the person reasonable judgment or does he lack judgment. Obviously the parties alone can asses this. When they put their trust in the arbitrator there is nothing more fitting than that they receive justice from the person they chose according to this criterion

I firmly believe that the reasons for canceling an award and in which venue, needs to be specified, so as to remove any doubt, and in order to prevent the abuse of the arbitration system when public policy and the rules of natural justice are disregarded. We don’t want to establish an institution immune to judicial review for the benefit of the criminal underworld