JNF sues board member for £700k costs

By Simon Rocker, February 25, 2010

JNF UK could be heading for a new High Court case later this year after suing a former board member for nearly £700,000.

The charity claims that Maurice Sherling (known as Charlie), owes the money to cover the JNF's legal fees in its past dispute with its Israeli associate Keren Kayemet LeIsrael (KKL).

Mr Sherling, managing director of Sherling Steel, Ireland's largest independently owned steel supplier, paid £579,095 towards JNF's legal costs in the UK and Israel, according to papers filed by his lawyers in the High Court.

But the JNF is claiming a further £697,417, plus interest, which it says he is "obliged" to contribute to the charity under an agreement to underwrite its legal expenses.

The dispute between KKL and JNF broke out nearly four and a half years ago when the Israeli agency said it was going to set up a rival fundraising operation in the UK because it was not getting the funds it expected from JNF.

Taking the dispute to the High Court, the UK charity then failed to win a temporary injunction to stop KKL using the names JNF or Jewish National Fund for raising money in Britain.

Finally, the two organisations patched up their quarrel early in 2008 - but not before running up an estimated £4 million of legal fees between them.

Samuel Hayek, the businessman who had headed KKL's embryonic UK branch, became chairman of JNF UK, while Gail Seal, the president of JNF, resigned a few months later.

According to JNF's new court claim, Mr Sherling had agreed to cover its legal costs in the conflict with KKL from June 2006 but "has refused to pay" the outstanding sum of £697,417.

But his lawyers stated: "The arrangement between Mr Sherling and the JNF in respect of the English proceedings was that Mr Sherling would pay the JNF's costs and disbursements on a purely voluntary basis, without being under any legal obligation to do so."

JNF chairman Samuel Hayek commented: "It was on the strength of Mr Sherling's promise to my predecessor, Gail Seal, that the litigation continued. He must now honour that commitment by reimbursing those costs.

"JNF has a legal responsibility under charity law, and a moral responsibility to its donors to ensure that all monies properly due to the charity are recovered. JNF has been advised that it has a strong case to recover these sums in full. However we remain hopeful of settling if reasonable terms are put forward by Mr Sherling."

Mr Sherling, who resigned from the JNF board a year ago, told the JC this week: "I got involved with the JNF for purely charitable reasons.

"Whilst I regret the action they have taken against me, settlement is entirely in their hands."

If the two sides cannot reach an understanding, the case is due to come to trial between the beginning of July and the end of November this year.

Last updated: 4:23pm, February 25 2010