April 3, 2017
A Victory for Barnea & Co. in the Supreme Court Regarding the Cancellation of an Arbitration Ruling
Adv. Zohar Lande, Adv. Jacques Gershoni and Adv. Yatir Madar from the Litigation Department at Barnea, succeeded in cancelling an arbitration ruling in the Tel Aviv District Court, a cancellation which was then upheld by the Supreme Court.The parties had appointed an arbitrator to hear and rule on a specific dispute between them. After the arbitrator had issued an arbitration award which had been fully carried out by both parties, the arbitrator joined forces with one of the parties, while attempting to ignore the arbitration award, which had already been carried out, with the aim of unilaterally issuing a new arbitration ruling. In fact, the new arbitration ruling overturned the original award, which, as noted, had been fully carried out by the parties.The party with whom the arbitrator had cooperated (the “other party’’), relying on the new arbitration ruling, filed a dual application to the Tel Aviv District Court - one for the approval of the new arbitration award and the second for the temporary imposition of liens on the property of Barnea’s client.Barnea's litigation team succeeded in obtaining an order for cancellation of the new arbitration award (in a judgment by the Honorable Justice Y. Shevach, District Court, December 28, 2016). The Court clarified that the new arbitration award was given without authority, because it exceeded the limits of the authorization defined by the parties and because it contradicted a previous ruling of the arbitrator.The other party did not accept the ruling of the District Court and chose to submit a motion for leave to appeal the ruling of the Tel Aviv District Court to the Supreme Court, as well as a request for temporary remedies in the appeal.Barnea filed a firm response to the other party’s request for temporary relief, in which it was made clear that the need to impose temporary liens was never examined on its merits in the District Court, and elaborated on the fact that the request for leave to appeal the judgment of the District Court lacked any basis both in law and in fact.The Supreme Court denied the motion for leave to appeal and instructed the other party to pay Barnea's client's legal fees and expenses (decision by the Honorable Justice Y. Danziger of March 26, 2017)."It is known that the annulment of an arbitration award is a rare occurrence, and that it does not happen routinely," commented Adv. Zohar Lande, Head of the Litigation Department at Barnea. "This rejection by the Supreme Court actually means the upholding of the District Court’s ruling, the cancellation of the new arbitration award and, accordingly, the cancellation of the temporary remedies imposed on the assets of our client”.