Mr David Sterling v. Mrs Miriam Rand and Mr Morris Rand

At a glance

Parties

Mr David Sterling v. Mrs Miriam Rand and Mr Morris Rand

Case no.

No. BL-2018-001435; [2019] EWHC 2560 (Ch)

Court

High Court of Justice, Chancery Division (England and Wales)

Forum and rules

Application under section 66 of the Arbitration Act 1996 to enforce a domestic award

Underlying award(s)

Award of the London Beth Din (Court of the Chief Rabbi) dated 25 January 2015

Tribunal

Ms Clare Ambrose, sitting as a Deputy High Court Judge

Sector

Real property

Outcome

Enforcement declined. The application was not dismissed, so the claimant may restore it if the Beth Din reopens the matter and leaves the Award unchanged, or if the defendants refuse to remit it.

Amount

The Award ordered transfer of the Property, not payment of money. Under the Heskem the purchase price was £745,000, and there was an existing mortgage of about £640,000.

The dispute

On around 19 March 2008 Mr Morris Rand signed a handwritten Hebrew agreement (a Heskem) with Mr David Sterling for the sale of 4 Dunsmure Road, Stoke Newington, London. The house was owned by Mr and Mrs Rand, and Mr Sterling lived there as a tenant. In October 2014 the parties referred their dispute over ownership to the London Beth Din for binding arbitration under the Arbitration Act 1996, with Jewish law governing both the procedure and the substance. The Award of 25 January 2015 ordered the Rands to transfer title to Mr Sterling or his nominee, Mr Shimon Stern, once the existing mortgage was discharged. When Mr Sterling sought summary enforcement under section 66, the Rands argued that section 48(5)(b) of the Act bars arbitrators from ordering specific performance of contracts relating to land. They also argued that the Award was unworkable and that the court should refuse enforcement as a matter of discretion. New evidence then showed that Mr Sterling had acted as undisclosed agent for Mr Stern, and that he had received housing benefit on the footing that he was a tenant.

Key holdings

1. The defendants' objection based on section 48(5) came too late. An objection that the tribunal exceeded its powers is an objection that the proceedings were improperly conducted, within section 73. It could have been raised before the Beth Din or under section 68, so it is precluded. ¶ 46
2. In any event the Beth Din had power to order specific performance of a contract relating to land. Choosing a foreign or religious governing law is not a written agreement conferring that power under section 48(5). But the parties chose Jewish law as the curial (procedural) law, and section 48 is not mandatory. Under section 4(5), the non-mandatory section 48 therefore did not apply, and Jewish law gives a Beth Din the power to order a transfer of land. ¶¶ 50–58
3. The court did not need to decide whether it could order the transfer under section 66 if the Beth Din lacked the power. The judge said she would have been willing to find that it could. ¶ 60
4. Section 66 is never a rubber-stamping exercise. The court has a wide discretion and may refuse enforcement on grounds of public policy, prejudice to third parties or non-arbitrability, as section 81 preserves. The dispute over land ownership was arbitrable in this context. The Award was not unworkable on its face, because the defendants could be required to cooperate in redeeming the mortgage. ¶¶ 66–75
5. The defendants' objection that the claimant was only an agent, not competent to sue on the Heskem, was not a ground to resist enforcement. They could have raised it before the Beth Din much earlier. ¶ 79
6. Enforcement was declined in the interests of justice. The new evidence that Mr Sterling had acted as undisclosed agent for Mr Stern contradicted the case put to the Beth Din. Housing benefit from Hackney LBC may also have been wrongly claimed and used in performing the Heskem, and Hackney would be prejudiced by a transfer. An order for specific performance could be contrary to public policy and could damage the integrity of the Beth Din system. ¶¶ 82–83
7. The application was not dismissed. The parties may ask the Beth Din to reopen the Award on the new evidence. If the defendants refuse to remit the matter, or the Beth Din leaves its Award unchanged, the claimant may restore the application. The judge was not satisfied that the court had power under the 1996 Act to remit the Award. ¶¶ 84–85

Procedural history

1. 19 March 2008Mr Rand and Mr Sterling sign the Heskem for the sale of the Property.
2. October 2014Arbitration agreement signed; hearing before the London Beth Din on 29 October 2014.
3. 25 January 2015The Beth Din's Award orders transfer of the Property to Mr Sterling or his nominee, subject to discharge of the mortgage.
4. 16 December 2016First enforcement proceedings issued in the Commercial Court; a second set follows in 2017.
5. 3 May 2018Popplewell J strikes out both claims and directs that any further enforcement proceedings be issued in the Chancery Division.
6. 26 June 2018Arbitration claim form issued seeking summary enforcement under section 66.
7. 10 April 2019First hearing. Some objections are decided, and the hearing is adjourned for further evidence, including expert evidence on Jewish law.
8. 1 October 2019Judgment: the court declines to order the transfer but does not dismiss the application.

Tribunal, counsel and experts

Decided by

• Clare Ambrose Judge, High Court of Justice, Chancery Division (sitting as a Deputy High Court Judge)

For the claimant

Waller Pollins Goldstein

For the respondent

DPA

Experts

Yohanassan Hool (claimant)

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Keywords

• Beth Din
• Jewish law
• section 66 Arbitration Act 1996
• enforcement
• specific performance
• contract relating to land
• section 48(5)(b)
• section 73 waiver
• curial law
• arbitrability
• public policy
• housing benefit
• undisclosed agent
• Heskem
• third party interests
• Kastner v Jason
• religious arbitration
• domestic award

Summary generated with AI from the published documents — refer to the award for the authoritative text.