Rabbinical Court Rulings Canceled Over Flawed Arbitration Process
A senior judge in Ashkelon has overturned three rabbinical court rulings totaling over 737,000 shekels against a businessman, Mordechai Neuman, in a dispute with the Galil Tamar hotel. Judge Sabina Cohen of the Ashkelon Magistrate's Court ruled that the arbitration process initiated by the hotel and its owner, Yossi Cohen, was fundamentally flawed.
The case began in May 2025 when Neuman's company, which organizes vacations for the ultra-Orthodox sector, booked rooms at the hotel for August. Neuman sought to cancel the booking two weeks prior, citing reports of poor service. He alleged that during the first guest rotation, issues included malfunctioning air conditioning, low-quality food, a dirty pool, and long waits for rooms that were found to be unclean.
A financial dispute arose, leading the hotel to send Neuman a binding arbitration agreement. The arbitration proceeded before a panel of three rabbis. Neuman claims the first hearing, on July 30, 2025, lasted three hours and concluded after midnight. Within an hour, he received a handwritten, signed ruling by email ordering him to pay 1.59 million shekels. A second ruling, described as a continuation of the first, was issued a week later without further hearings. During a third hearing on August 26, 2025, Neuman's representative attempted to raise a challenge against the arbitrators, but they refused to hear it before addressing the main dispute. Neuman and his counsel then left the room, after which a third ruling was issued, ordering Neuman to pay the remaining balance of 737,781 shekels, leading to an enforcement action.
Neuman appealed to the Magistrate's Court, citing severe procedural defects under the Arbitration Law, including a coerced process, differing religious affiliations between parties, late-night hearings preventing witness testimony, a ban on recording, and the absence of a protocol. He also expressed serious concerns about the arbitrators' neutrality, stating the hotel owner met privately with the arbitrators after the first hearing and spoke with them by phone in his absence.
Judge Cohen agreed with most of Neuman's arguments. She highlighted the arbitrators' refusal to address the challenge before hearing the merits of the case, a violation of natural justice principles. She criticized the unusually rapid issuance of the first ruling without hearing Neuman's witnesses, the second ruling without explanation, and the private meeting between the arbitrators and the hotel owner, which she stated could undermine trust and the appearance of justice. Consequently, she canceled all three rulings, removed the arbitrators, and ordered the parties to agree on a new arbitrator within 30 days, or the court would select one. The enforcement action against Neuman will be closed, and the hotel was ordered to pay Neuman 15,000 shekels in legal costs.
