Church Law and Tax 1990-09-01 Recent Developments Arbitration Richard R. Hammar, J.D., LL.M., CPA •

Church Law and Tax 1990-09-01 Recent Developments


May arbitration agreements be used to resolve ecclesiastical disputes? This interesting question was considered by a New Jersey court in a significant case. A synagogue and its rabbi were embroiled in a “lengthy and destructive dispute” that they agreed to submit to binding arbitration by a panel of ecclesiastical experts (a “Beth Din”). The “arbitration agreement” signed by the parties specified:

Blessed be the Lord. This is to certify that we the undersigned fully accept upon ourselves the following judgment of the Beth Din of the Union of Orthodox Rabbis of the United States and Canada … to adjudicate between us according to their judicious wisdom, we affirm hereby that we have accepted upon ourselves to obey and fulfill the judgment which shall issue forth from this Beth Din whether it be verdict or compromise, according to the determination of the aforementioned judges without any appeal whatsoever before any Beth Din under Jewish law or any civil court, but it is incumbent upon us to obey the verdict of the aforementioned Beth Din without any further complaint. All of the above was entered into voluntarily … without any reservations whatsoever in a recognizable and legally binding manner and is entered into in a manner so to be completely and lawfully binding.

After an extended hearing involving “voluminous documentary evidence” and “lengthy oral testimony,” the Beth Din ordered the synagogue to pay the rabbi $100,000, and asked the rabbi to resign “for the sake of peace” (it found no other basis to remove him). The synagogue appealed this arbitration order to a state civil court. A state appeals court upheld the decision of the Beth Din, and rejected the synagogue’s appeal. It observed that the “arbitration agreement” was entered into “freely and voluntarily, with an awareness on the part of both sides as to the meaning and significance of that form of religious dispute resolution.” The court rejected the synagogue’s claim that it had not “voluntarily” entered into the agreement. It observed that the synagogue’s president had signed the agreement, and this bound the synagogue. The court noted that the authority of a civil court to review an arbitration award is “extremely limited,” and is not permissible “absent proof of fraud, partiality, [or] misconduct on the part of the arbitrators ….” Since there was no evidence of any of these grounds, the decision of the Beth Din had to be affirmed and enforced by the civil courts. The court concluded that “the law favors dispute resolution through consensual arbitration, and so the award is presumed to be valid. So it is here. On this record, the Beth Din’s decision and award must be confirmed.” The court further “encouraged mutual compliance with this court judgment without the compulsion of court process.” In other words, if the parties did not voluntarily recognize the arbitration decision, the court would compel them to do so. What is the significance of this decision? Consider the following observations. First, it illustrates that the civil courts generally favor arbitration as a means of dispute resolution. This is particularly true in the context of ecclesiastical disputes, which often involve issues that are best left to church leaders. Second, the courts will enforce arbitration decisions, even in the context of religious organizations, unless the decisions were based on fraud, or partiality or misconduct on the part of the arbitrators. Third, agreements to arbitrate must be voluntary, and should be in writing and signed by authorized persons. Finally, church leaders should recognize that a substantial percentage of lawsuits involving churches are brought by “insiders” (members and others attending services). Accordingly, church leaders should consider the advantages of adopting an arbitration procedure within the local church (e.g., as a part of the bylaws). If properly drafted, such a procedure could reduce the numbers of church lawsuits resolved by the civil courts. Of course, any such procedure would have to (1) ensure impartiality, (2) be voluntarily and knowingly adopted by a church and its members alike, (3) specifically identify the disputes to be submitted to arbitration, (4) describe the procedure to be employed, and (5) be coordinated with the church’s liability insurance company. Clearly, the adoption of such a procedure would require careful study and preparation, but the potential advantages are significant—the resolution of at least some church disputes through a private and internal process. We will have more to say about this significant subject in future issues of Church Law & Tax Report. Elmora Hebrew Center v. Fishman, 570 A.2d 1297 (N.J. Super. 1990).

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