Case Over Hebrew Insults Prompts International Arbitration Challenge in Atlanta U.S. Court

An Israeli company has asked a federal judge in Atlanta to declare that an arbitrator had no authority to levy hundreds of thousands of dollars in damages against it in response to claims of defamation made by a Norcross company.

The case stems from a sprawling dispute between Israeli-based Profimex and Norcross-based OAD Development (OAD). It started when Profimex claimed to an arbitrator in Kennesaw that OAD owed Profimex hundreds of thousands of dollars in fees from real estate deals. OAD responded with counter-claims that Profimex officials defamed OAD to investors in emails, some of which were written in Hebrew.

The arbitrator, Nisbet Kendrick III of Kennesaw’s Kendrick Conflict Resolution, in December awarded Profimex $401,675 in unpaid fees, interest and attorney fees. But Kendrick also awarded OAD $950,000 on its counterclaims, leaving OAD ahead by about $550,000.

Profimex argues that OAD’s claims should have been handled in Tel Aviv, Israel, because the arbitration clause in the companies’ contract mandated that any dispute be arbitrated in the defendant company’s chosen venue, Atlanta for claims against OAD and Tel Aviv for claims against Profimex.

Lawyers for OAD argue that Profimex’s effort to have their claims set aside turns the federal court into an appellate forum for arbitration awards losing parties don’t like. Allowing Profimex’s case to go forward, OAD’s lawyers said, threatens to undermine the very reasons that binding alternative dispute resolution exists.

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