A recent decision from a New York State Supreme Court illustrates the importance of following proper procedure when arbitrating in Bais Din. In that case, a homeowner’s insurance company sued a Bais Yaakov school, alleging that work done to expand the school building had damaged their insured’s property, requiring the insurance company to pay substantial claims to its insured.

According to the facts in the decision:

Beth Jacob began construction to expand its building at 98-100 Lawrence Street, Brooklyn, New York, in late March or early April 2006. In mid-October 2006 Rabbi Michael Levi (Levi) was served with a summons to appear on behalf of Beth Jacob at the Beis Din Zedek Rabbinical Court of the Central Rabbinical Congress of the United States and Canada (Beis Din). The proceeding was initiated by Rabbi Aharon Zaberman and Eli Baumwolspiner. According to Beth Jacob, the parties appeared before the Beis Din on October 22, 2006. Levi asserts, in his affidavit, that Eli Baumwolspiner, Zaberman, and Levi signed an agreement to have the case heard by the Beis Din, after which the three-member panel of the Beis Din heard the parties’ arguments. While Levi contends that the Beis Din did not require Beth Jacob to pay any money to Baumwolspiner, and permitted the construction to continue, there are no documents submitted on this motion regarding the parties’ agreement to arbitrate, or the Beis Din’s determination. The Baumwolspiner’s maintain that they merely sought the Beis Din’s assistance in preventing further damage, but did not submit the issue of payment for the damages to the Beis Din for consideration.

The property owner’s insurance company, Tower Insurance, paid its insured for the damage and then sued the Bais Yaakov. The school argued that the court should “compel arbitration (in the Beis Din) on the ground that plaintiff’s subrogors are bound by their agreement to arbitrate, and Tower stands in their shoes.”

The insurance company argued that there was no agreement or contract binding the parties to adjudicate their claims before Bais Din.  The court agreed, noting that:

Beth Jacob has produced no written agreement to arbitrate, either from prior to the parties’ appearance at the Beis Din, or dating from that appearance. An agreement to arbitrate must be in writing in order to be enforced. CPLR 7501. Furthermore, that writing must make it clear what issues are to be arbitrated, and make the parties’ intention to arbitrate the dispute unequivocal.

The upshot is that parties who are in Bais Din should be certain that the agreement to arbitrate, as well as the scope of the arbitration, are well documented. To protect their authority, Batai Dinim should not proceed with a hearing unless and until all parties enter in such written agreements.