International In-house Counsel Journal Vol.12, No. 47, Spring 2019, 1

Checkmate, Forum-Shoppers: How Uniform Rules of Procedure Can End The Beit Din Selection Stalemate

BEN TURIN General Counsel and Director of Public Affairs, Oorah, Inc. and Kars 4 Kids Inc., USA And YOSEF S. STEIN Legal Assistant, Oorah, Inc. and Kars 4 Kids Inc., USA

Jewish Law dispute resolution practice is built upon rabbinic traditions first described in the Mishnah – a compendium of religious and civil black letter law compiled at approximately 200 CE – and its voluminous commentary.1 Parties seeking to resolve disputes under Jewish law submit to the jurisdiction of a three-person panel tasked with mediating, arbitrating and adjudicating disputes in consonance with procedural and substantive Jewish Law.2 These panels typically operate under the auspices of institutions known as Batei Din, literally “houses of law,” or, singularly, as a Beit Din3, literally a “house of law.” Since Jewish Law has no contemporary state authority,4 even in the State of Israel,5 the decision to engage in a Beit Din dispute resolution process is wholly voluntary and

We thank Binyamin Turin (Georgetown University Law Center class of 2019) for providing invaluable research support. 1 The Mishnah, initially a compilation of laws and theological principles passed down orally from each generation to the next (the “Oral Law”), serves as an extension of, and elaboration upon, the terse black letter law set forth in the Torah (Five Books of Moses). Concerned that the Oral Law tradition was destined to be forgotten if not transcribed into written form, Judah ha-Nasi, also known as Judah I, codified the written Mishnah in Israel sometime around the turn of the third century. (Oren Gross, Venerate, Amend … and Violate, 46 Ariz. St. L.J. 1182 (2014).) Subsequently, the Babylonian Talmud (whose authority is generally considered to supersede that of the slightly older Jerusalem Talmud), an encapsulation of the Rabbinic commentary that ensued approximately over the three centuries following the transcription of the Mishnah, was compiled and edited by Rav Ashi and Ravina II, who lived during the fourth and fifth centuries. (Samuel Flaks, Law, Religion, and Pluralism: The Thought and Experiences of Nathan Isaacs (1886-1941), 29 Touro Law Review 340 (2013).) The Talmudists’ views were later discussed and debated by the Rishonim (who included such philosophical and theological luminaries as Maimonides, Rashi, Nahmanides and the Tosafists) from the eleventh century to the fifteenth century. The philosophies and codes of Jewish Law continue to be studied and deliberated in the academies of the contemporary Achronim period, which has lasted from about the sixteenth century to the present. See Isaac Roszler, Law as a Prism into National Identity: The Case of Mishpat Ivri, 38 U. Pa. J. Int’l L. 729 (2017). 2 In modern practice, Batei Din will generally seek to mediate disputes and help the parties arrive at mutually-agreed settlements. Unlike in common secular law practice, the Beit Din panel will often directly engage in the mediation process and not seek to appoint an outside mediator. (For instance, the Beth Din of America, one of the more prominent Batei Din in the United States, refers to itself as “a full service mediation and arbitration organization” on its website, https://bethdin.org/dintorah/.) If efforts at mediation fail, the Beit Din panel will instead issue a legal ruling in accordance with Jewish Law. Nonetheless, Beit Din proceedings almost always entail some element of compromise (see note 22 and accompanying text). See also Bet Din and Judges, Encyclopedia Judaica (2 ed. 2007), discussing the role of the Beit Din from antiquity to the modern age. 3 Alternative common English transliterations include “Bet Din,” “Beth Din,” and “Beis Din,” with “Batei Din” being the plural form. 4 For an in-depth discussion of the nature and extent of Jewish Law application in historical times, see Menachem Elon, Jewish Law: History, Sources, Principles (1994). See also Marcus Jastrow & Louis Ginzberg, BET DIN, The Jewish Encyclopedia (1906). See also Bet Din and Judges, Encyclopedia Judaica, supra. 5 While present-day Israeli law has developed primarily based upon the legal systems of Britain and other common law jurisdictions, there is a decades-old movement to incorporate elements of Jewish Law into the law of the modern State of Israel. This proposed integration of Jewish Law into contemporary Israeli law is known as Mishpat Ivri (“Hebrew Law”).

International In-house Counsel Journal ISSN 1754-0607 print/ISSN 1754-0607 online

2 Ben Turin and Yosef S. Stein necessarily governed by the laws of the territory in which the Beit Din functions. For example, in the United States, dozens of Batei Din presently operate to accommodate disputants who seek to resolve their disputes under Jewish Law.6 Under contemporary law,7 there are generally two ways in which a claim may be brought before a Beit Din panel. Beit Din jurisdiction attaches where the parties in dispute have previously agreed to arbitrate before Beit Din in a pre-existing contract between the parties, typically in the form of a mandatory binding arbitration clause stipulating that any disputes shall be adjudicated by a Beit Din panel. Alternatively, the parties may both agree in writing to engage a Beit Din to resolve an existing dispute. Procedurally, a Beit Din hearing shares much in common with other forms of arbitration or judicial proceedings.8 Notwithstanding such similarities, there are significant structural challenges with the current state of Beit Din practice across the world. For the most part, the hundreds of Batei Din currently operating internationally are independent and do not share uniform rules of procedure. The lack of uniformity between the proceedings of different Batei Din is one of the root causes of procedural inefficiencies and inequities in the Beit Din adjudication process. Specifically, the lack of universally accepted procedural rules has created an environment that rewards opportunistic behavior and penalizes litigants who are legitimate good-faith participants in the Beit Din process. This paper seeks to highlight a number of the procedural inconsistencies and inefficiencies in the contemporary Beit Din framework9 and proposes a path towards the establishment of a more uniform procedural landscape through the adoption of uniform Beit Din procedural rules. The paper begins with a recent case study in which carefully-drafted dispute resolution provisions were ineffective at preventing a protracted and inefficient procedural dispute between disputing parties. The paper seeks to identify procedural inefficiencies and interstices which would be improved by the adoption of uniform Beit Din procedural standards. In closing, the paper proposes a two-stage approach for the development and adoption of uniform Beit Din rules of civil procedure. This paper proposes the development of model uniform procedural rules for Beit Din adjudication, which could be elected into by parties either at the drafting phase of commercial agreements or once a dispute has arisen. Following a comment period, the proposed uniform rules would be promulgated as stand-alone dispute resolution rules, as well as in the form of model Annexes that could be appended to existing rules of alternative dispute resolution (ADR) procedure being referenced in contractual agreements, such as the rules of the International Chamber of Commerce (ICC) or the American Arbitration

See Steven F. Friedell, Some Observations About Jewish Law in Israel’s Supreme Court, 8 Wash. U. Global Stud. L. Rev. 659 (2009). 6 A non-exhaustive list of US Batei Din compiled by the Boston Agunah Task Force lists at least one Beit Din panel in each of 44 distinct US states (available at http://www.getyourget.com/beit-din-listings). It should be noted that Batei Din’s areas of expertise vary, and not all Batei Din necessarily adjudicate commercial matters. 7 See, e.g., United States of America Federal Arbitration Act (FAA), 9 U.S.C. § 2. 8 The plaintiff presents her claim, the defendant is given an opportunity to respond, the judges ask pertinent questions of both parties, evidence is presented, and witnesses may be brought to corroborate and/or contradict the positions of the respective litigants. Toanim, or rabbinic advocates, are often hired to help bolster the arguments of the respective parties. After a litigant has stated her position, her advocate may advance Jewish Law sources in favor of such position. Once the Beit Din panelists feel confident in their understanding of all relevant facts and viewpoints, they will confer amongst themselves before mediating a settlement or rendering an arbitration ruling, depending on the circumstances and based upon applicable Jewish laws. 9 Specific inefficiencies discussed in this paper include: (1) Lack of procedural rules regarding language of communication, see note 13 and accompanying text; (2) Inconsistent service requirements, see note 14 and accompanying text; (3) Inconsistent rules regarding the availability to remove to secular court, see note 18 and accompanying text; (4) Inconsistent rules with respect to availability of removal to a different Beit Din panel, see note 21 and accompanying text; (5) Requirement to enter into a supplemental arbitration agreement, see note 22 and accompanying text; and (6) Sanctions available to and in use by a given Beit Din for a party’s non-compliance with the directive of the Beit Din, see note 24 and accompanying text. Forum Shopping 3

Association (AAA). It is hoped that the proposed uniform rules will gain acceptance amongst drafting parties over the next few years. If this initiative is successful, it is further proposed that ultimately, these uniform Beit Din rules of procedure would be adopted by the various independent Batei Din and that a confederation of Batei Din might be formed. This Beit Din association would link together many disparate Batei Din, thereby generating increased uniformity and predictability in the Beit Din process. Case Study -- Kirk v. Sol10 Dov, an Israeli entrepreneur attempting to salvage the IP assets of a high-tech start-up that had become insolvent during the 2008 credit crisis, traveled to the United States in early 2009, seeking funders and partners. After raising sufficient funds to purchase the IP from the failed start-up, Dov approached Sol, a US-based investor, with a proposition. If Sol would agree to join forces with Dov, provide interim funding and assist with growing a new to-be-formed company (“TechCo”) to certain milestones, including a significant fund- raise, then Dov would transfer 50% of the ownership of TechCo to Sol. Sol accepted the offer. Subsequently, Dov, Sol and other members of the TechCo team began working towards those goals but had limited success. In 2010, Dov was introduced to Kirk, a transplanted Californian who had moved to Israel and was looking for a new business opportunity. Following a due diligence review of TechCo and its technology, Kirk decided to invest $300,000 in TechCo in exchange for 1/3 of TechCo’s equity and an agreement between the parties that Kirk would be appointed TechCo’s CEO. Following his initial investment, Kirk continued to invest in TechCo, in the form of working capital loans. Despite these investments, TechCo continued to struggle and failed to achieve profitability. As time passed, Kirk became increasingly frustrated with the ongoing situation at TechCo and expressed these concerns to Dov and Sol. Kirk also informed Dov and Sol that he was not willing to continue funding TechCo’s burn indefinitely, and that if they could not find a solution to the ongoing losses Kirk was prepared to pursue potential legal remedies. This impasse continued for some time. Kirk requests that Sol submit to binding arbitration before a Beit Din in Israel. Sol attempts to remove the matter to a Beit Din in the United States, resulting in a procedural impasse. In 2016, Sol received an e-mail communication from Zion with Justice Rabbinical Courts, an Israeli network of Batei Din (“ZWJ”) on behalf of Kirk. Attached to the cover e-mail were, (1) a written demand, listing the names of the plaintiff and his two toanim11, the name and address of the defendant, a $1.5MM demand, a statement of the facts and legal theories underlying the claims – in this case, misrepresentation and fraud, which allegedly induced Kirk to invest in and continue to fund TechCo, (2) a proposed arbitration agreement already signed by the plaintiff, and (3) a request for response, which stated that the defendant was required to respond in writing within fourteen days to avoid any sanction. The ZWJ communication contained a number of deficiencies, some of which are equally applicable to most modern Beit Din practice, and others particular to this communication. The ZWJ communication did not adequately communicate the substance of the allegations being made by the plaintiff – Although Sol was generally familiar with the Hebrew language, he did not fully understand the documents received from the ZWJ Beit

10 The proceedings described herein are not a matter of public record. Accordingly, we have altered the names of the parties and certain non-material details (including in quotations) to protect the parties’ confidences. 11 The role of a to’en, the rough equivalent of an attorney in Jewish Law, is to help his client craft and present sound legal arguments. Toanim is the plural form of to’en. See also note 8, supra. 4 Ben Turin and Yosef S. Stein

Din. As a result, after receiving the initial communication from ZWJ, Sol wrote to ZWJ and requested that ZWJ communicate with him in English. ZWJ responded, “[We] sent you a claim and a request from Betdin12 to sign an arbitration agreement (attached document in English) and to send your response.” Notwithstanding Sol’s request for an English communication, the only document provided to Sol in English was a blank arbitration agreement; ZWJ did not communicate with Sol in English regarding the substance of Kirk’s claim. ZWJ’s failure to proactively communicate with Sol in English, as well as its subsequent incomplete response to Sol’s request for clarification, is an example of how the absence of uniform Beit Din procedural rules leads to inefficiencies in an international Beit Din dispute resolution process. In our view, a Beit Din attempting to establish long-arm jurisdiction over a citizen of a different country should, at a minimum, be required to communicate with such defendant in the official language of such foreign state. The ZWJ Beit Din’s failure to do so negatively impacted Sol’s procedural due process rights under Jewish law.13 The ZWJ communication did not comport with established forms of Beit Din service of process, and failed to notify the defendant of his removal rights – A Beit Din adjudication begins with the service of a Beit Din-issued summons upon the defendant. This summons, known as a Hazmana, issues at the request of the plaintiff and requests the appearance of the defendant before the Beit Din. The summons states the claim in brief, provides a proposed date and time for the hearing, and requests a response from the defendant. The details of this summons process and procedure are established in classic Jewish Law sources, which provide that the Beit Din issue three such notices prior to sanctioning the defendant for failing to respond or appear.14 Upon the receipt of a summons, a named defendant may accept the jurisdiction of the issuing Beit Din or invoke a removal right, which allows the named defendant to identify an alternate Beit Din of her choice. The nature and limitations of the removal right will be discussed in greater detail below.15

12 Alternative spelling of Beit Din. 13 Be’er Sheva Responsa 54 rules that a plaintiff is not required to divulge the substance of his claim(s) to the defendant prior to commencing Beit Din proceedings. Siftei Kohen (the Shakh), in his commentary to Shulchan Aruch, Choshen Mishpat 11:1, cites Be’er Sheva’s ruling and disagrees, ruling that a plaintiff is generally required to disclose to the defendant the substance of his claims before summoning her to Beit Din. For purposes of this paper, we have adopted the position of the Shakh. See David Bass, Shabetai ben Me’ir ha-Kohen, The YIVO Encyclopedia of Jews in Eastern Europe (2008), writing that the Shakh’s “works were accepted as authoritative in the circle of Talmudists, so much so that almost none of the later commentators on the Shulḥan ‘arukh dared to disagree with him explicitly.” Although beyond the scope of this paper, the debate between Be’er Sheva and the Shakh just cited assumes a scenario where a plaintiff is directly summoning a defendant to Beit Din. This is unusual, as a summons typically issues from the Beit Din at the request of a party. See note 14 infra and accompanying text. 14 The core requirement to summon a party to Beit Din three times applies only to someone who resides in the villages/suburbs and therefore might have difficulty making it to Beit Din right away; someone located in the city, however, where the Beit Din is seated, has no excuse not to respond to the first Hazmana. (Shulchan Aruch, Choshen Mishpat 11.) Nonetheless, the general contemporary practice is to issue three Hazmanot to any non-appearing party before issuing a siruv, or contempt order (see note 24 infra). For a detailed discussion of contemporary Beit Din Hazmana procedure, see Rabbi Chaim Jachter, Hazmana to Beit Din - Part I (1998), available at https://www.koltorah.org/halachah/hazmana-to-beit-din-part-i-by-rabbi- howard-jachter. Rabbi Jachter states that “the practice has become to send three Hazmanot even to a city dweller, because our lives have become more hectic and thus we need reminding,” citing a number of authoritative Jewish Law sources in support of this position. 15 Choice of Beit Din can be a particularly delicate art – and litigants would be well-advised to carefully consider which Beit Din they wish to appear before to settle their disputes. As is the case with judges and arbitrators generally, within Jewish Law there are various judicial philosophies, as well as procedural variations, that may be subscribed to by a diverse range of Beit Din panels. Far from being instances of so- called “judicial activism,” the proclivities of certain Batei Din to rule in certain ways would be more accurately compared to doctrines such as “originalism” or “textualism,” judicial philosophies that may well be entirely principled and unbiased. Nonetheless, just as sincere adherents of “originalism” and equally Forum Shopping 5

The ZWJ communication to Sol deviated from classic practice inasmuch as it did not include a formal Hazmana summons. Although Sol questioned ZWJ regarding the lack of a Hazmana, ZWJ did not provide an explanation as to why ZWJ had eschewed the traditional practice of issuing a formal summons. Sol wrote to ZWJ asking for clarification regarding the procedural status of the case, and specifically whether the ZWJ communication was intended to serve as a summons. ZWJ responded by e-mail, clarifying that the communication was not a Hazmana, but rather “a request from you to sign an Arbitration Agreement and to send your response.” In addition to not including a summons, the ZWJ communication did not inform Sol of his removal rights. In response, Sol wrote to ZWJ and indicated that it was his understanding that under Jewish law, following the issuance of a Hazmana, a defendant has the right to select a Beit Din in the defendant’s home city. Sol explained that he was reluctant to respond to the Beit Din letter prior to the receipt of a summons, as he did not want to waive any of his rights as defendant to remove the case. ZWJ partially responded to Sol’s concerns. The Beit Din confirmed that, “as you wrote, the defendant [is] entitled to choose a beit din.” However, ZWJ still did not explain why it had not issued a summons, and did not confirm that the removal right had vested in Sol even without the issuance of a summons.16 Rather, ZWJ informed Sol in an e-mail: After the plaintiff filed a suit, the Beit Din sent you a letter, the claim and an Arbitration Agreement. The letter from the Beit Din says that according to the Halachah17, one is supposed to litigate in a Beit Din and therefore, you need to sign the Arbitration Agreement or to inform us [of] a different Beit Din that you prefer to litigate in. If you will refuse to litigate in a Beit Din, the plaintiff will receive permission to go to secular court.18 Although Sol was quite familiar with the Beit Din process in the US, he had never before heard of a Beit Din that would issue a “permission to go to secular court,” known as a “Heter Arkaot,” before the issuance of at least one formal summons. Rather, established practice in the US is that a Beit Din will not permit a party to proceed in secular court until after the opposing party has received and ignored three separate summonses. In contrast, ZWJ was prepared to permit Kirk to file suit in secular court before the issuance of any formal summons. As noted earlier, Sol had been reluctant to respond prior to receiving a formal Hazmana, because he did not want to risk opening the door for Kirk to argue that Sol was the plaintiff and that Kirk had a removal right. However, after being informed by ZWJ that there would be no summons issued prior to ZWJ issuing a Heter Arkaot to Kirk, Sol decided to respond immediately. Sol wrote to ZWJ and invoked his removal right:

sincere proponents of a “living, breathing Constitution” tend to find themselves at odds over numerous issues of judicial import, adherents of differing Jewish Law philosophies may as well, and sometimes those differences may form predictable patterns – which drafters of contracts can make use of in choosing Batei Din that are likely to ensure the enforceability of their agreements in conformity with their original intent. For example, Batei Din differ with regard to whether – and to what extent – applicable secular law (e.g. US law for Batei Din operating in the United States) should be weighed alongside Jewish Law in reaching Beit Din verdicts. 16 Sol suggested in an e-mail to ZWJ that perhaps they were not sending a Hazmana at the request of the plaintiff to preserve his ability to sue in civil court, but ZWJ never responded to that e-mail. (Email from Sol to ZWJ, dated February 6, 2017, in possession of authors.) 17 Jewish Law; also transliterated Halakha. 18 Under Jewish Law, litigating disputes between Jewish parties in secular courts is strictly forbidden. If the summoned party refuses to appear before a Beit Din, however, the Beit Din may provide the plaintiff with a Heter Arkaot, a dispensation allowing her to pursue the matter in the secular court system. (Shulchan Aruch, Choshen Mishpat 26) 6 Ben Turin and Yosef S. Stein

I am prepared to appear for a Din Torah19 in the Maysharim Rabbinical Court in Lakewood, NJ. I am attaching their Arbitration Agreement for your review. I have always understood that you must send me 3 Hazmanot20 before the Beit Din can even consider issuing a Heter Arkaot, however, in light of your statements above I am responding at this time.21 The ZWJ requirement that the disputing parties enter into a supplemental mandatory agreement created an additional hurdle to efficient dispute resolution – ZWJ’s request that the parties enter into a supplemental arbitration agreement was consistent with common Beit Din practice. Regardless of whether a prior agreement to arbitrate exists between the litigants, a Beit Din will generally require the parties to sign an additional binding arbitration agreement prior to the commencement of arbitration proceedings. Such an agreement will typically define the parameters of the dispute, specify that the chosen Beit Din has exclusive jurisdiction regarding the contested matter, and provide that the Beit Din’s judgment shall be binding upon the parties, unappealable, and enforceable in secular courts. The arbitration agreement will also typically set forth the Jewish Law philosophy to be applied in adjudicating the case – peshara (compromise) or peshara kerova l’din (compromise approaching strict justice).22 Such agreements also ensure that someone who receives an unfavorable outcome from a Beit Din is unable to subsequently force re- litigation of a decided case in any other court or arbitration panel. However, notwithstanding the potential utility of the Beit Din-required supplemental arbitration agreement, in practice, requiring disputants to enter into a supplemental agreement often creates an additional hurdle in the Beit Din dispute resolution process and, as such, is another example of an inefficiency in contemporary Beit Din civil procedure. The lack of established Beit Din rules of civil procedure allows litigants, in this case Kirk, to threaten opposing parties with circumvention of the Beit Din process, and to easily circumvent such process if they so choose – As described above, Sol had responded to the communication from the Beit Din with a request to invoke his removal right. Rather than respond to the substance of Sol’s removal request, Kirk threatened to circumvent the Beit Din process and immediately file a claim in civil court.23 Kirk’s threat of

19 As used herein the term Din Torah is a noun referring to a Jewish-Law-compliant adjudicative process. 20 Plural form of Hazmana. 21 Sol also wrote to ZWJ expressing his concern that their unusual procedural processes might expose him: I am concerned about this policy of yours. It is not consistent with any Beit Din I have worked with and I have worked with many. This morning Kirk sent me a threatening e-mail stating that he intends to go to Arkaot (secular court) if I don't agree to appear before ZWJ. If you were to send me a Hazmana and I would respond with a signed Shtar Birurin (Beit Din Arbitration Agreement) to Maysharim, then I would be able to show that Kirk summoned me to Beit Din. As it stands I do not have that evidence and do not have a way to prevent him from ignoring the Beit Din process. I am going to send you the signed Shtar Birurin and will forward you [h]is threats, however, I would appreciate an explanation as to why ZWJ is deviating from established practice of Batei Din to send a Hazmana. This deviation is troubling to me. I very much appreciate all the time you have spen[t] responding to my concerns and as I indicated above will forward to you the signed Shtar Birurin for Maysharim along with Kirk’s threatening e-mail. 22 As the names indicate, peshara kerova l’din involves a more substantial and precise consideration of black letter law than peshara. There is a third form of judgment – Din (the strict application of law) – the utilization of which is generally discouraged by Batei Din. However, Batei Din will adjudicate in accordance with strict Din if the disputing parties insist upon it. 23 Kirk responded to Sol’s counter-proposal within minutes, writing directly to Sol: You have two choices: accept the Beit Din summons or answer a complaint to be filed in Israeli court. I’ll assume, if the Beit Din invitation is not accepted by Monday (Feb 13) that you prefer Israeli court. In response, Sol wrote directly to ZWJ, copying Kirk and his counsel: Forum Shopping 7 circumvention was credible because of the lack of established and enforceable Beit Din rules of civil procedure. ZWJ works to resolve the jurisdictional dispute between Kirk and Sol ZWJ wrote to the parties: A. Under Jewish Law neither party may turn to the local courts without the express authorization of the Beit Din. B. ZWJ policy precludes the issuance of any excommunications or other such type sanctions. In the event that a defendant refuses to appear in front of the Beit Din, ZWJ will permit the Plaintiff to file a claim in civil court. This is the extent of our actions.24 C. With respect to the choice of Beit Din and the location for the hearing, the underlying principle is that the defendant is entitled to choose the forum. If the Plaintiff believe[s] there are extenuating mitigating circumstances justifying the removal of that right from the defendant, he should detail them. The plaintiff and defendant wrote to ZWJ and outlined their respective arguments, which follow. Plaintiff’s Position: The events underlying the case occurred in Israel, published Responsa establish that the locus of the events is the proper venue, the State of Israel is uniquely qualified to serve as the proper venue, and removal should be disallowed on these facts, where the defendant is seeking to damage the plaintiff through removal. Locus of the Events Underlying the Case Occurred in Israel and Published Responsa Rule that the Location of the Factual Events Underlying a Dispute is the Proper Venue for Resolution of that Dispute. Kirk’s toanim argued that the various activities of TechCo were based and conducted in Israel, and that Israel was therefore the proper venue for any litigation. They further cited various published opinions of Jewish Law scholars in support of the idea that a civil defendant is unable to remove a Beit Din case from the locus of the applicable business enterprise to his then-current location,25 and that when parties engage in a joint business venture in a given geographic location, there is an implied covenant to adjudicate any disputes arising out of that relationship in the same location.26

As I indicated in my e-mail of earlier this morning, in addition to the signed arbitration agreement I provided to you a few minutes ago, I am also forwarding to you below Kirk’s threats made one hour ago. 1. I hereby request that ZWJ issue an Ikul (restraining order) against Kirk forbidding him to go to secular court in light of my agreement to appear before Maysharim and my provision of a signed shtar birurin to ZWJ indicating the same a few minutes ago. 2. I hereby request ZWJ to warn Kirk that if he files an action in secular court without a Heter Arkaot that ZWJ will issue a statement declaring Kirk to be a "lo tsais dina" (someone who refuses to litigate in Beit Din) and a violator of Halakha. Kirk, in turn, responded: Again. Monday. My Beit Din or Israeli court. Kirk repeated his threats to abandon the Beit Din process in multiple additional communications while this matter was still pending. 24 ZWJ was informing the parties that its practice is not to issue an Ikul, a restraining order, or a siruv, a contempt order, but rather to simply authorize the plaintiff to seek redress in secular court via a Heter Arkaot if the defendant does not agree to appear. The primary effect of a siruv is that many religious Jews will refrain from associating or engaging in commerce with anyone who is the subject of such an order. 25 Responsa Rashba, 2:374. 26 Responsa Maharshadam, Choshen Mishpat 103. Maharshdam is an acronym for Rabbi Shmuel di Medina, who lived in Greece from 1506-1589. See, also, concurring opinion of Rabbi Ovadia Yosef, Responsa Yabia 8 Ben Turin and Yosef S. Stein

Kirk also argued that Rule 12 of the Batei Din of the Israeli Rabbinate27 provides that where parties enter into a business venture and the venture is still operational, a party making a claim may elect to bring her claim in a court at the location of the defendant or of the shared venture. Rabbi Shaul Israeli, founder of the ZWJ network of Batei Din, also ruled that in a case involving a business in Israel where the defendant was living abroad, the proper venue for dispute resolution is in Israel.28 The State of Israel Has a Unique Status, Requiring the Dispute to Be Heard in Israel. Rabbi Shaul Israeli ruled that Jewish courts sitting in the land of Israel have obtained Bait HaVaad29 status and that, accordingly, a defendant cannot remove a case to a court outside the land of Israel.30 Defendant Should Be Barred from Removal Since the Removal’s Purpose is to Damage the Plaintiff, and the Public Policy Behind the Removal Rule is Ultimately Intended to Benefit the Plaintiff. Kirk alleged that because Sol is an attorney, and an expert in the “inner workings of American law,” he was trying to use such knowledge to “avoid payment.” He cited several rabbinic rulings in support of the notion that a defendant could, under certain circumstances, be barred from removing a case to a different Beit Din. Firstly, the Maharshdam ruled that if a Beit Din has a basis to determine that the defendant will avoid accepting the Beit Din’s judgement, the Beit Din may act to prevent such avoidance.31 Additionally, where a party attempts to remove a case to a distant Beit Din in an effort to make it economically impossible for the plaintiff to recover his damages, the Beit Din can deny such motion.32 Similarly, Rabbi Moshe Feinstein had ruled that a woman could proceed against her former husband in a local court and was not obligated to bring her case in the distant court her husband was attempting removal to.33 Finally, Kirk claimed that the general right of a defendant to remove the case to a Beit Din near his location is intended to benefit the plaintiff, not the defendant.34 Defendant’s Position: The defendant was in the USA at the time of the underlying events, TechCo is a web-based enterprise with no physical address, the defendant is entitled to choice of jurisdiction, and there is therefore no reasonable basis to deny defendant’s right of removal. Kirk’s allegation was that Sol had fraudulently induced him to invest in TechCo. Sol pointed out that the pre-investment discussions and the investment itself were conducted by phone while Sol was at all times physically situated in New Jersey, where his primary

Omer, Choshen Mishpat, 2:4, citing also Ateret Devorah. Rabbi Ovadia Yosef (1920-2013) lived in Iraq, Egypt and Israel, and he served as the Sephardic Chief Rabbi of Israel from 1973-1983. 27 The Israeli Rabbinate is recognized under Israeli law as the chief Jewish Law authority in Israel, and its functions include “the conferment of eligibility to serve as a dayan (judge of a religious court) under the Dayanim Law, 5715-1955” (Section 2(4) of the Chief Rabbinate of Israel Law, 1980). Kirk was apparently citing the Rabbinate’s procedural rules on the theory that ZWJ would view them as persuasive authority. 28 Mishpatei Shaul 40. 29 The term Bait HaVaad (literally, “house of the gathering”) was used during Talmudic times to describe a meeting place of Torah scholars (Joshua Schwartz & Peter J. Tomson, Jews and Christians in the First and Second Centuries: The Interbellum 70-132 CE 204 (2017)). In this context, the term refers to the preferred status awarded to a location with an existing sophisticated Jewish Law knowledge base. The argument proffered by Kirk’s counsel was that the State of Israel should be viewed, in its entirety, as a Bait HaVaad as compared to cities in the diaspora and that, accordingly, international Jewish Law disputes involving at least one party resident in Israel should be adjudicated in Israel. 30 Mishpatei Shaul 42. 31 Responsa Maharshdam, Choshen Mishpat 7. 32 Bach, Choshen Mishpat 14. 33 Igros Moshe, Choshen Mishpat 2:3. 34 Responsa Maharival, 2:97. Forum Shopping 9 residence was and remains. Further, TechCo is a web-based business hosted on the cloud with no physical address in any country. Many of TechCo’s vendors and employees live outside of Israel. Sol further contended that there was no basis to deny a defendant the right to remove to a Beit Din panel in his geographic location where he had set forth a reasonable defense. Sol’s area was home to many qualified Beit Din panels, and he was fully prepared to appear before one of them and abide by the ruling thereof. Forcing Sol to travel to Israel would place a significant financial burden on him, in addition to the difficulties he would face because of the language barrier. ZWJ queries the parties regarding the enforceability of the Parties’ previously negotiated ADR Clause; defendant views the clause as enforceable while plaintiff does not. ZWJ then requested that the parties respond to a series of individualized questions.35 Most critically, they queried the parties regarding their respective views as to the enforceability of the existing dispute resolution clause in the parties’ shareholder agreement. Section 10 of the Shareholders’ Agreement by and between TechCo, an Israeli Company, and all of its Shareholders provides for an arbitration process in the event of a dispute.36 Please advise of your views as to the relevance of this clause to the instant dispute. Sol responded that in his view Section 10 was binding and that since the parties were unable to mutually settle upon an “Agreed Arbitrator,” he was prepared to submit the dispute for arbitration under the International Rules of Arbitration of the Israeli Institute of Commercial Arbitration.37 Kirk responded that in his view Section 10 was not binding, as the dispute related to activities that preceded entry into the Shareholders’ Agreement and therefore did not “arise under th[e] Agreement.” 38 ZWJ advises the plaintiff to accept defendant’s view that the parties’ previously negotiated ADR Clause is binding and to seek resolution thereunder. After the plaintiff fails to respond, ZWJ issues a decision ruling for the defendant.

35 They asked Kirk how frequently he travels to the New York area, his view of the value of TechCo, and to provide detail as to how the two parties met, negotiated and ultimately consummated the investment by Kirk. They asked Sol what his ownership percentage in TechCo is, what its estimated value is, and how many times a year he travels to Israel. 36 In full. 10) Mandatory Arbitration, Choice of Law. The parties to this Agreement hereby agree to submit any dispute hereunder to mandatory arbitration pursuant to the following procedure: (i) If the parties agree to submit any dispute hereunder to a mutually agreed upon arbitrator or arbitration panel (the “Agreed Arbitrator”) they shall submit the dispute to such Agreed Arbitrator and the findings of the Agreed Arbitrator shall be final and enforceable. (ii) If the parties to this Agreement cannot agree upon an Agreed Arbitrator they shall submit such dispute for arbitration pursuant to the International Rules of Arbitration of the Israeli Institute of Commercial Arbitration. In the event that a dispute is adjudicated under subsection (ii), above, then the parties will use New York law. The parties hereto all consent that any process or notice of motion therewith may be served by certified or registered mail or personal service, anywhere in the world, provided a reasonable time for appearance is allowed. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues, and therefore each party hereby irrevocably and unconditionally waives any right such party may have to a trial by jury with respect to any litigation directly or indirectly arising out of or relating to this Agreement, or the breach, termination or validity of this Agreement, or the transactions contemplated by this Agreement. The parties further agree that any judgment, order or injunction granted by any Agreed Arbitrator or arbitrator chosen pursuant to the International Rules of Arbitration of the Israeli Institute of Commercial Arbitration shall be enforceable in any jurisdiction in which the Company or its affiliates do business. 37 E-mail from Sol to ZWJ dated May 22, 2017, in possession of authors. 38 Letter from Kirk to ZWJ dated May 23, 2017, in possession of authors. In addition to providing for arbitration under the rules of the Israeli Commercial Arbitration Society, Section 10 also provided that New York Law would govern any such arbitration. It is defendant’s view that plaintiff was attempting to avoid New York law, as his claim would be barred under New York law as the six-year statute of limitations for fraud had already run. In contrast, Israeli law provides for a seven-year statute of limitations in cases of fraud. 10 Ben Turin and Yosef S. Stein

On June 6, 2017, following their receipt and review of the parties’ responses to the Beit Din’s questions, ZWJ wrote to the parties and suggested to Kirk that he accept Sol’s view of the binding nature of the ADR clause and seek redress thereunder.39 ZWJ asked the plaintiff to respond to their suggestion on or before June 11, 2017; Kirk did not respond. On July 9, 2017, a three-person panel issued their written opinion and found for the defendant on the jurisdictional questions before the Beit Din. The panel made no findings on the substance of plaintiff’s claims. Regarding defendant’s right to remove, the panel held that the established rule “that the plaintiff must follow the defendant applies.”40 Plaintiff had argued that the rabbinic courts in the State of Israel have the status of a Bait HaVaad and that the plaintiff should therefore have the power to force defendant to appear before the Israeli Beit Din. The ZWJ panel disagreed. The panel distinguished between matrimonial matters, where the rabbinic courts in the State of Israel are superior – as they have enforcement powers that exceed rabbinic courts in other jurisdictions – and civil disputes, where Batei Din in Israel have the same authority as panels operating in countries outside Israel, as both rely on local laws which vest authority in arbitration panels selected by disputing parties. Accordingly, the panel wrote, it was not necessary for the panel to rule on the Bait HaVaad argument, as that distinction applies only to matrimonial matters. With respect to plaintiff’s claim that defendant’s motive in seeking removal of the case to a panel in the United States was to cause damage to plaintiff, the panel found that plaintiff had not submitted any evidence to support that allegation. Plaintiff had argued that the reason for the principle that the plaintiff follows the defendant is fundamentally for the benefit of the plaintiff; the panel found that the reason for the principle is a matter of dispute and that many authorities rule that it is for the benefit of the defendant. Regardless, the panel wrote, the arguments supporting removal were significant, including the fact that enforcement of any judgement against defendant’s assets would be in the United States. The panel also noted that the defendant was prepared to appear before a panel under the rules of the Israeli Institute of Commercial Arbitration. Based on the above, the panel found: Based on the information in front of us there is no basis to obligate the defendant to appear before a rabbinic court in Israel. The Plaintiff should notify us if he want to proceed before the Israeli Institute for Commercial Arbitration, as offered by the Defendant, before a rabbinic court in New Jersey, or that he is withdrawing his claim at this time, within 14 days of the date of this opinion. This decision can be appealed within 7 days July 9, 2017

39 E-mail from ZWJ to parties dated June 6, 2017, in possession of authors. 40 Opinion of ZWJ, dated July 9, 2017, in part. It is established law (Rama CM, §12, 140) that the plaintiff must follow the defendant. Plaintiff presented numerous arguments as to why this case should be an exception. Defendant responded to those arguments. We will address Plaintiff’s primary arguments. Plaintiff argued that proper venue lies near the location of the business activities in controversy, based on significant authority, led by the opinion of Rashba and Marharshdam. … We only apply this principle in instances where the facts in controversy occurred in a location where both parties were resident. Since in this case Plaintiff and Defendant were resident in different locations during the relevant period, the principle that the plaintiff must follow the defendant applies.

Forum Shopping 11

Conclusion The Beit Din’s ruling that any action should be brought before the Israeli Institute for Commercial Arbitration or before the Beit Din in New Jersey ended the matter. Kirk did not file an action in either forum and Sol never heard anything further from Kirk. It is worth pointing out that in addition to the failure of the arbitration clause between Kirk and Sol to sufficiently address choice of Beit Din, the clause also did not stipulate the nature of the process to be exercised by the Beit Din tasked with adjudicating any dispute – peshara or peshara kerova l’din.41 It further failed to state whether attorneys’ fees and other litigation costs could be recovered by the prevailing party, a detail which, depending on the jurisdiction and the matter at hand, either would be fatal to any attempt to recover litigation costs or would leave the matter to the discretion of the arbitrators.42 While in this case procedural inefficiencies arose from the parties’ failure to specify choice of Beit Din, similar inefficiencies could have arisen from these other common drafting weaknesses – and sometimes do. Prudently, the ADR clause did clearly explain that by agreeing to arbitrate any disputes, the parties were waiving their rights to trial by jury.43 In general, the more potential disputes that can be circumvented by precise drafting of dispute resolution provisions, the better.44 As demonstrated by the case study, the lack of uniform Jewish Law rules of civil procedure has created an environment that allows litigants to forum shop, stall, and even threaten counter-parties with civil litigation in secular fora if a Beit Din adjudication does not proceed to their liking. As noted in the introductory portion of this paper, we believe that the development of uniform Beit Din practices and procedures, which could be voluntarily elected into by contracting parties and ultimately might be adopted by the Batei Din themselves, would serve to increase the efficiency and quality of the Beit Din adjudication process. Although beyond the scope of this paper, we have begun developing a

41 See note 22 supra explaining the difference between peshara and peshara kerova l’din. See, generally, John M. Townsend, Drafting Arbitration Clauses: Avoiding the 7 Deadly Sins, 58 Disp. Resol. J. 28-36 (2003), recommending that an ADR clause not omit any procedural details of the prospective arbitration that can reasonably be determined and spelled out in advance. 42 In Milwaukee Teachers’ Education Asso. v. Milwaukee Bd. of School Directors, 147 Wis. 2d 791 (1988), the Wisconsin Court of Appeals ruled that “[t]he arbitrator's powers … are limited to those the parties agreed to give him,” and accordingly vacated the arbitrator's award of attorneys’ fees in that case, since the arbitration agreement between the parties did not specify that attorneys’ fees could be awarded. The court cited the US Supreme Court’s ruling in Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240 (1975) that “absent statute or enforceable contract, litigants pay their own attorneys' fees.” As for Jewish Law, Rabbi Shlomo Weissman, Recovering the Costs of Litigation in Beit Din, 1 The Journal of the Beth Din of America 66-67 (2012) cites a number of authoritative Jewish Law sources in support of the concept that “litigants generally must each bear the costs they incur in prosecuting or defending claims in beit din.” Nonetheless, he concludes that a Beit Din is authorized to award attorneys’ fees in several circumstances, one of which is a case where the parties’ agreement explicitly provides for it. In any event, it should be noted that the enforceability of any such contract provision is subject to a number of factors, as lucidly demonstrated by Paul J. Dubow, Collecting Attorney Fees in Arbitration, California Litigation Magazine, Vol. 22, No. 3 (2009). 43 There is some American case law suggesting that a mandatory binding arbitration clause is unenforceable unless it states explicitly that the parties to the contract are forfeiting their rights to settle disputes in a court of law. The Supreme Court of New Jersey ruled in Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430 (2015) that an arbitration clause, “at least in some general and sufficiently broad way, must explain that the plaintiff is giving up her right to bring her claims in court or have a jury resolve the dispute.” 44 See E. Charles Routh, Drafting Clauses for International Arbitration, ALI CLE Business Law Course Materials Journal, Vol. 30, No. 2 (2006), identifying a number of pertinent questions that should be resolved by an arbitration clause, such as where to arbitrate, what rules should apply to the arbitral proceedings, how the arbitrators should be selected, and which language should be used in arbitration. Unfortunately, agreement on detailed procedures for empaneling a Beit Din is not always a realistic expectation. We address this problem at the conclusion of this paper, where we propose the promulgation of universal procedural standards to regulate Beit Din proceedings. 12 Ben Turin and Yosef S. Stein comprehensive set of proposed guidelines, which we hope to publish for comment in a future article. The proposed model rules would help to eliminate various procedural inefficiencies we have identified, such as the issue of Beit Din selection stalemate that we met in our case study. By way of example, the American Arbitration Association (AAA) addresses similar problems by establishing rules that govern how arbitrators are to be selected. When the AAA’s policies, or those of a similar organization, are invoked as the governing arbitral rules in an ADR clause or other arbitration agreement, it settles a large number of additional details of the contemplated arbitration proceedings, eliminating the need to delineate all of them in the contract.45 Similarly promulgating universal rules in the world of Jewish Law would extend these benefits to litigants who wish to utilize Batei Din, allowing them to opt in to a comprehensive set of procedural rules consistent with Jewish Law. Besides for allowing the parties to a transaction to conveniently address all the details of arbitration by simply invoking the uniform rules in their ADR clause, such rules would also likely become the general standard for those whose contracts make no specification of Beit Din choice at all – serving to facilitate resolution of the Beit Din selection stalemate in all instances. With standard rules to govern Beit Din procedure, an initial failure on the part of litigants to agree on a Beit Din would not spell doom for efforts to efficiently resolve their dispute. Instead, the rules would dictate what the next steps should be. The preferred Batei Din of the respective parties might be solicited to form a joint panel for purposes of hearing the case. Alternatively, the parties might each choose a judge, the two of whom would jointly negotiate the selection of a third judge – a Beit Din selection style referred to in Jewish Law as zabla.46 The important point is not precisely how the Beit Din will be empaneled, but that a Beit Din will be efficiently empaneled – because a uniform procedure will exist to keep the case moving towards resolution. Assuming this initiative is successful and universal Beit Din procedural rules attain popular adoption over the next several years, the authors further propose that the many existing Batei Din across the globe should eventually link arms under the auspices of a Beit Din confederation much like the AAA, a non-profit organization that would unite and conform the practices of a diverse, international set of Batei Din under a single procedural umbrella. The authors of this paper intend to propose our Beit Din confederation concept to the leaderships of some prominent communal groups within the Orthodox Jewish community and to seek their collaborative assistance in advancing the idea to fruition. We believe that initiatives such as universal Beit Din procedural rules and the establishment of an international Beit Din association would go a long way towards improving the Beit Din process for twenty-first century litigants, making it more feasible for disputing parties to resolve their disputes in accordance with the abiding wisdom and inimitable jurisprudence of Jewish Law. **

45 American Arbitration Association, Drafting Dispute Resolution Clauses - A Practical Guide 10-12 (2013), available at https://www.adr.org/sites/default/files/document_repository/Drafting%20Dispute%20Resolution%20Clauses %20A%20Practical%20Guide.pdf. 46 Zabla is an acronym for zeh borer lo echad, Hebrew for “this [litigant] chooses for himself one [judge].” See Shulchan Aruch, Choshen Mishpat 13. Many contemporary Beit Din selection disputes wind up before a zabla panel. The proposed rules would facilitate such resolutions while limiting the legal wrangling and delays that are currently prevalent.