In the Matter of the Arbitration Between Mikel and Scharf

Asher Scharf (defendant) was a shareholder of a corporation that operated a nursing home and had leased property from a partnership. The corporation and the partnership agreed to modify the rent payment, which was memorialized in writing and signed by the corporation and by Ulo Barad, one of the partners, on behalf of the landlord. Subsequently, Shlomo Mikel (plaintiff), a 6 percent owner of the partnership, brought a claim against Scharf and the other shareholders (defendants). The shareholders received notice to appear in rabbinical court for a din torah, an arbitration before a tribunal of rabbis. The shareholders attended the first meeting with their attorney, but at two subsequent meetings, the court refused to allow their attorney to be present. As a result, their attorney, who had witnessed the lease negotiations, was unable to provide testimony, admit documents into evidence, or ask questions of Mikel. Mikel did not have an attorney. The arbitration process was disorganized, with no particular format followed and no witnesses called or evidence presented. At the conclusion of the din torah, the tribunal found in favor of Mikel and granted him a monetary award to be paid by the shareholders. Mikel sought an order confirming the award. The shareholders opposed and moved to vacate the order on the grounds that they were not permitted to have adequate legal representation at the din torah.