The current limit is $10,000. You can choose whether to file in Justice Court or Superior Court, but plaintiffs are discouraged from filing such minor cases in the Superior Court's calendar unless you plan to accept the arbitration ruling. The Superrior court calendars are packed with much larger cases. I am not surpried that the Judge is irritated that one party appealed the arbitration ruling. You are not limited to recieving $10,000. A Joint Pretrial Memo filed with the Superior Court Judge is binding, if filed with the arbitrator, you might be able to get out of it. But why irritate the Judge any more by clogging his calandar with a jury trial about an engagement ring? The trial will likely cost taxpayers more that the value of the ring.
You are correct that the limit in Justice court is 10K. There is concurrent jursidiction because the low end limit for superior court currently is 2.5K. The value of alleged damages you reference means that the case belongs in superior court.