ARBITRATION, method of settling disputes by their submission, voluntarily and with the mutual consent of all parties, for adjudication by a person or institution.
Function of Arbitration
In ancient Greek and Roman law – up to the middle of the third century C.E. – the adjudication of disputes was primarily dealt with by arbitration. But in Jewish law such adjudication from the beginning was based on a system of regular courts, empowered to enforce their judgments on the parties. This is ordained in the Pentateuch (Ex. 18:25–26, and more specifically Deut. 16:18 and 17:8–13). Reference is made to a system of established courts in the time of King Jehoshaphat in the eighth century B.C.E. (II Chron. 19:5–11), and talmudic tradition ascribes to Ezra, in the middle of the fifth century B.C.E., an enactment that courts (battei dinin) be held on Mondays and Thursdays (Ket. 1:1; BK 82a) to judge the people whether they wish it or not (Sif. Deut. 144 – contrary to the opinion of B. Cohen, Jewish and Roman Law, 2 (1966), 657ff., 796, and Baron, Social2, 2 (1952), 266f., that arbitration preceded a system of presiding courts in Jewish law as well; see bibliography below: Gulak, Assaf).
The beginnings of the arbitral institutions are traceable to the middle of the second century C.E., in the period of Hadrian's decrees or even, it has been suggested, to the time of Rabban Gamaliel of Jabneh (first to second century; see G. Alon, below). This was one of the low periods in the history
of Jewish judicial
, in which judicial authority was restricted, even in the field of civil law, i.e., dinei mamonot (see
), as opposed to criminal law (TJ, Sanh. 7:2, 24b), and the prohibition against ordination (
) was decreed (Sanh. 14a). To ensure the continued existence of Jewish judicial authority, therefore, the institution of arbitration was resorted to, and Jews turned to it of their own free will, prompted by their religio-national feelings. The laws of arbitration are first discussed by R. Meir and other scholars of that period (Sanh. 3:1) and the institution was known and employed mainly in Ereẓ Israel and not in Babylonia, where the Jews enjoyed wide judicial autonomy. For this reason too, the original meaning of the mishnaic term shetarei berurin ("deeds of arbitration," MK 3:3; BM 1:8; BB 10:4) was forgotten, and it was interpreted as meaning the statements of the parties, claims, or pleadings (BB 168a), whereas the amoraim of Ereẓ Israel adhered to the original meaning of the term, i.e., "Compromisin, this one chooses one [arbitrator] and this one chooses another" (TJ, MK 3:3, 82a). The existence in practice of the situation as described, and the background to the creation of arbitration as an institution of Jewish judicial authority, find expression in an order of Honorius in 398 C.E., according to which Jews were rendered subject to Roman law and the regular courts, but permitted, in civil law matters and by mutual consent of the parties, to resort to their own arbitration proceedings, enforceable at the hands of the provincial judges (Codex Theodosianus, 2:2, 10; also quoted, with slight changes, in Codex Justinianus, 1:9, 8).
At various times and in different countries of the Diaspora, arbitration continued to serve as a substitute for judicial autonomy, in particular where such autonomy had been weakened. But it also fulfilled important functions even where there was autonomy, which was general in the countries of the Diaspora. Thus, it aided in relieving the burden on the regular courts and in speeding up legal proceedings (see e.g., Or Zaru'a, BK 10:436) or was employed when the regular court was disqualified from hearing a suit because of its own interest in it (see S. Dubnow (ed.), Pinkas ha-Medinah (1925), 6, no. 13 and 307, no. 12) or for other reasons (Shevut Ya'akov, vol. 2, no 143).
Ordinarily, in Jewish law, the arbitral tribunal is composed of three arbitrators. The Mishnah (Sanh. 3:1) records a dispute between R. Meir and other scholars, the former stating that each party chooses one arbitrator and both choose the third, while the other scholars hold that the two arbitrators choose the third. Gulak correctly points out that the scholars sought to lend to arbitration proceedings (at least externally, although the matter is of substantive importance too: see below) the appearance of a Jewish court, composed generally of three judges, in contrast with the single arbiter customary under Roman law. The plain meaning of R. Meir's statement seems to be that the third arbitrator is chosen by the two parties only (so too, TJ, Sanh. 3:1, 21a), but the interpretation of the Babylonian amoraim was that all agreed that the consent of the two (arbitrators) is required for the appointment of the third and that R. Meir merely added that the consent of the parties to the third (arbitrator) is also required. The halakhah was decided accordingly (Sh. Ar., ḤM 13:1; Maim. Yad, Sanh. 7:1 gives conflicting interpretations). However, the opinion has been expressed that where the arbitrators are empowered to decide not only according to strict law, but also to effect a
(pesharah), the two arbitrators may not appoint a third without the consent of the two parties (Arukh ha-Shulḥan, ḤM 13:1).
When the two arbitrators are unable to agree on the appointment of the third, the appointment is made by the elders of the city – whose status in various matters is as that of the court (see
; and cf. Piskei ha-Rosh, Sanh. 3:2; Sh. Ar., ḤM 13: 1, Isserles ibid.) and it was often customary for the rabbi of the city to be the third arbitrator (the "shalish"; I. Halperin (ed.)., Pinkas Va'ad Arba Araẓot (1945), 111–2, no. 270; 142–3, no. 335; Dubnow, op. cit., 246, no. 932; Shevut Ya'akov, vol. 2, no. 143; He-Avar, 2 (1918), 73, no. 16). In the Vilna community, where, as in other communities, arbitration was customary despite the existence of regular battei din, it was the practice to stipulate in the rabbi's letter of appointment that he would not be required to serve as a third or fifth arbitrator etc., as the case might be (He-Avar, 2 (1918), 66, no. 11). The parties to arbitration may agree to a smaller or to a larger number than three (Sh. Ar., ḤM 3:2; Resp. Rosh, 56:1 and 56:7; Resp. Rashba vol. 2, no. 83; Resp. Jacob Weill 11; Naḥmanides, to Deut. 1:12; Isserles to Sh. Ar., ḤM 13:1), a rule carried out in practice (Halperin, op. cit., 85, 308; Dubnow, op. cit., 225, no. 843; 232, no. 888), and in one case cited, ten arbitrators were appointed (Resp. Ritba 85). A party is not heard, however, if an increase in the number of arbitrators is requested as a subterfuge (Arukh ha-Shulḥan, ḤM 13:5). When four arbitrators are appointed, the fifth is again chosen by them and not by the parties (Noda bi-Yhudah, Mahadura Kamma, ḤM 2).
The plain meaning of R. Meir's statement would allow for either party to reject the other's arbitrator, even if the latter be competent to judge and an "expert" (mumḥeh; TJ Sanh. 3:2, 21a). The Babylonian Talmud, however, interpreted R. Meir as conceding that an expert could not be so rejected (Sanh. 23a). The opinion of the scholars who differ from R. Meir is that one party cannot reject the other's arbitrator in the absence of evidence that the latter is a relative of the litigants (or of the other arbitrators: Resp. Rema 104) or not competent to serve as a judge (as detailed in the Mishnah, Sanh. 3:3–4). A bond of friendship between a party and his arbitrator does not of itself entitle the other party to disqualify him (Resp. Maharik 16), but if a defendant wishes to appoint an arbitrator whose integrity is in question, the former is not heard and he is compelled to appear before the regular court. Similarly, the defendant need not appear at arbitration proceedings until the claimant has appointed an honest arbitrator (Piskei ha-Rosh, Sanh. 3:2; Sh. Ar., ḤM 13:1). An arbitrator cannot be disqualified merely because he is not "godfearing" (Resp. Ri-Migash 114).
Status and Functions of Arbitrators
The talmudic sages saw a particular advantage in arbitration, in that each party could nominate an arbitrator of his own choice who represented the interests of the party choosing him and therefore a just decision was ensured (Sanh. 23a and Rashi, ibid., cf. TJ, Sanh. 3:1, 21a). In the 13th century,
*Asher b. Jehiel
pointed out that it was wrong to interpret the above passages as justifying the arbitrator's blind support of the party by whom he was chosen when they should rather be read as meaning that the arbitrators appointed by both parties would thoroughly investigate the facts objectively and negotiate on the respective merits of the litigants' claims – the third arbitrator listening to them and then deciding between them (his Comm. to Sanh. 3:2; see also Darkhei Moshe ḤM 13:3 and Resp. Maharik 16).
The status of arbitrators has been described as equivalent in every way to that of dayyanim (Panim Me'irot, vol. 2, no. 159), and hence an arbitrator is precluded from hearing the contentions of the party appointing him in the absence of the other party, unless this is agreed upon or is local custom (Arukh ha-Shulḥan, ḤM 13:4). Arbitrators' fees are payable to the arbitrators chosen by each party, regardless of the outcome, lest the arbitrator be unduly influenced because of his interest in recovering his fees (ibid.). To ensure the maximum integrity of the arbitrators, an opinion was expressed that these fees be defrayed from a communal fund especially set up for this purpose and that a ban (
) be imposed on both the donor and recipient of any gift beyond the allocation from this fund (Panim Me'irot, ibid.), but this far-reaching proposal was apparently not adopted (S. Assaf, Battei Din… (1924), 57).
On the other hand, formal legal requirements are relaxed in arbitration proceedings (see e.g., Resp. Rashba, vol. 2, no. 64). From the procedural point of view, too, arbitrators act as dayyanim and in various places special rules of procedure in arbitration proceedings are provided for. Thus in Cracow, in the 17th century, it was determined that arbitrators were required to commence their hearing within 24 hours of their appointment and to give their decision within three days of the hearing, a limit of nine days being provided for when the issue was complicated (Balaban, in: JJLG, 10 (1912), 333–4).
Agreement to, and the Subject Matter of Arbitration
The Talmud does not deal specifically with the question as to when an agreement to resort to arbitration is considered irrevocable. The problem is touched upon in connection with a case where the parties accepted a relative or other person legally incompetent to act as judge or witness, when it was held that, if accompanied by an act of kinyan (see Modes of
), such acceptance could not be revoked; if there was no such kinyan, either party may revoke its acceptance at any time up to the completion of the litigation, but not thereafter (Sanh. 24a–b). A fortiori, where legally competent arbitrators are appointed, there can be no withdrawal from the submission to arbitration if agreed upon by way of a kinyan, nor after the conclusion of the proceedings (Beit ha-Beḥirah, Sanh. 83–84; Isserles to Sh. Ar., ḤM 13:2).
However, additional ways were sought to enhance the institution of arbitration and to prevent a party's withdrawal of its submission thereto. One such way was the drawing up of a deed of arbitration, referred to already in the Mishnah (above), which can be written only on the decision of both parties, both of whom pay the scribe's fees (BB 10:4 and Codes). The Mishnah also mentions a deed of arbitration as one of the documents permitted to be written on ḥol ha-mo'ed ("the intermediate days of a festival"; MK 3:3). Rashi's opinion is that the purpose of a deed of arbitration is to render submission to arbitration irrevocable (BM 20a), since the writing of a document has the same legal effect as a kinyan (Nov. Ramban, BM 20a; see also Nimmukei Yosef, MK 3:3). Support for the fact that writing a deed is regarded as a kinyan is to be found also in the case of providing surety for which kinyan is required (Sh. Ar., ḤM 129:4–6; see also Ket. 102a), a view supported in most of the Codes. Other scholars express the view that a deed of arbitration is written "so that the arbitrators should not forget" (cited in Beit ha-Beḥirah, Sanh. 84; cf. Maim. Yad, Yom Tov, 7:12) and its mere reduction to writing does not preclude the parties' revocation of the arbitration agreement. Yet another opinion is that the deed is an undertaking by the arbitrators to hear the matter, which they cannot later deny (Or Zaru'a, BB 10:232).
A further opinion, accepted in most of the Codes, is that once the parties have commenced their pleas before the arbitrators, they (the parties) can no longer withdraw from the arbitration (Ha-Ittur, vol. 1, S.V. Berurin; Beit ha-Beḥirah, loc. cit; Nimmukei Yosef, BM 20a. Their reliance on TJ, Sanh. 3:4, 21a and on BK 112b may, however, be considered as not being within the plain meaning of these texts). This view is also quoted by Isserles (to Sh. Ar., ḤM 13:2), who holds that it is generally agreed that where it is not customary for a deed of arbitration to be written, the parties may not withdraw after the commencement of their pleas. Two extreme and contradictory opinions are, firstly, that once the names of the arbitrators have been determined the parties may no longer withdraw, even if no deed has been written and the parties have not yet commenced their pleas (Or Zaru'a, Sanh. 3:8), and secondly, that even where there are legally competent arbitrators the parties may withdraw at any time before the proceedings have been concluded, except where the agreement to arbitrate was effected by an act of kinyan (Ibn Migash, quoted in Ha-Ittur, loc. cit.).
There is a complete consensus of opinion that where the arbitrators are empowered to adjudicate on the basis of a compromise, the parties may withdraw, provided that they had not already performed a kinyan or undertaken in writing to observe any such compromise, as the absence of a kinyan gives rise to the suspicion of a mistaken release (see
(Sh. Ar., ḤM 12:7 and Isserles ad loc.). It was customary for most arbitration deeds to be effected with the aid of a kinyan, apparently also because the arbitrators were generally
empowered to adjudicate both on a strictly legal ruling and by way of compromise (see forms of arbitration deeds in Gulak, Oẓar, 281–6). Similarly it was customary to provide therein for payment of a fixed penalty upon withdrawal, or to deter such withdrawal by the imposition of an oath or ban (ibid.).
The subject matter of an arbitration may be an existing dispute between the parties, or one that is likely to arise between them as a result of a particular transaction (as, unlike in the case of real acquisition, a man may obligate himself in respect of something which is not yet in existence, or not quantified (see
; Leḥem Rav 82, and see Warhaftig, pp. 516–7)). Similarly, in the opinion of Nissim Gerondi, the issue for arbitration may relate to matters of both civil and criminal law, e.g., "robbery (gezelot) and assaults" (Nov. Ran, Sanh. 23a), contrary to the view of Warhaftig, pp. 518–9, that Jewish law permits arbitration in civil cases only. The reason therefore would seem to be that at times the regular courts, required to be composed of expert and professional judges, were themselves obliged to resort to the principle of arbitration, but in practice it was customary only for civil law cases to be referred to arbitration (see e.g., S. Dubnow (ed.), Pinkas ha-Medinah (1925), 145, no. 609). An important detail, frequently prescribed in deeds of arbitration, was that the proceedings had to be concluded within a stated period, the arbitrators themselves sometimes being given authority to extend such period at their discretion (Gulak, Oẓar, loc. cit; see also above).
Decision of the Arbitral Body
As in the case of the regular court, the decision of the majority prevailed, unless they were authorized to impose a compromise, for which a unanimous decision was required (Sh. Ar., ḤM 12:18). According to talmudic halakhah, a party may require the regular court to submit written reasons for its judgment (Sanh. 31b and Codes), but an arbitral body is not obliged to do so, even upon request (Tos., Yad Ramah, ibid. and Beit ha-Beḥirah, Sanh. 138, Piskei ha-Rosh, BM 5:45, Sh. Ar., ḤM 14:4, Isserles). Sometimes however, it is considered desirable to make known the reasons for a judgment – as was held by M.M. Krochmal in the 17th century, in a suit by members of the community of Vienna against the leaders for the return of money allegedly misappropriated, so that "you shall be blameless in the eyes of God and of the people" (see his Ẓemaḥ Ẓedek 37).
A decision on a matter not included in the issues submitted to the arbitrators for decision, renders their decision void pro tanto (Resp. Rosh 85:5–6, see also Resp. Jacob Berab 27; Resp. Maharashdam, ḤM 4; Divrei Rivot no. 155; Leḥem Rav 85). A compromise imposed by the arbitrators, when they were not authorized to do so in the deed of arbitration, is also a void decision (Resp. Bera 27). Similarly, their decision is voidable in the event of improper conduct on their part, e.g., if it appears that any one of them was acting for his own benefit (Resp. Maharashdam, ḤM 4) or that they gave their decision without hearing both parties (Leḥem Rav 87) or that it was given after the period prescribed in the deed of arbitration had expired (Resp. Rashba vol. 3, no. 209. See also Resp. Ribash 300; Resp. Radbaz 953 (518)). The right of appeal against the arbitrator's decision is coextensive with the right of appeal against judgments of the regular courts (OPD 71ff.), but the parties may stipulate, at the time of the arbitration agreement, that they shall not appeal against or object to the arbitral decision but accept it as final (Resp. Radbaz 953; Gulak, Oẓar, 284–5, no. 306; Takkanot Moshe Zacuto; see Assaf, p. 78).
On the role of Arbitration during the Emancipation, see M. Elon, Ha-Mishpat ha-Ivri (1988), 1324–29; idem., Jewish Law (1994), 1582–88.
In Modern Israel
In the years 1909 to 1910 there was founded in Palestine the Mishpat ha-Shalom ha-Ivri, an institution designed to serve the Jewish yishuv as a forum for the adjudication of all disputes of a civil law nature, and thus to revive the jurisdiction of Jewish law. From the point of view of the general law of the land, this institution functioned as an arbitral body, reaching the peak of its activities in the years 1920–30. Its presiding arbitrators adjudicated mainly in accordance with general principles of justice, equity, and public order. The rabbinical courts too – whose jurisdiction from the general law viewpoint is confined to matters of personal status only – have had a certain proportion of matters of a civil law nature referred to them for adjudication when sitting in effect as arbitral bodies. This tendency has to a certain extent been intensified in recent years and decisions of this nature of the rabbinical courts carry with them an element of laying down guiding principles with reference to new problems arising in all fields of civil law.
Arbitration in the State of Israel is governed by the Arbitration Law, 5728/1968, based on the recommendations of an advisory committee in 1965. The law deals in detail (inter alia) with the manner of appointing arbitrators and their removal from office, their powers and the auxiliary powers of the regular courts, and with the rules of procedure in arbitrations and the manner of confirming or setting aside decisions. The provisions of a common form of agreement between the parties to submit to arbitration, appearing in a schedule to the law, is binding upon them unless they have otherwise agreed. These provisions deal with the composition of the arbitral tribunal, the manner in which it is to be conducted, and its powers visà-vis the parties. Several of the provisions of the above law are based on Jewish law.