IsraelLawOverview of Israeli Arbitration
Arbitration in Israel is governed primarily by the Arbitration Law, 1968 . The law is party-centric: most procedural matters default to the parties' agreement and the arbitrator's discretion, with mandatory rules limited to fundamental fairness requirements. This gives Israeli arbitration significant flexibility but also places a premium on clear advance planning.
Israeli arbitration can be broadly categorised as:
- Domestic arbitration — between Israeli parties, conducted in Hebrew, with Israeli law governing both the substance and the procedure.
- International arbitration seated in Israel — involving at least one foreign party or cross-border element, often conducted in English under institutional rules (ICCA, ICC, LCIA).
The process described below applies to domestic arbitration under the Arbitration Law, 1968. International institutional arbitrations follow the relevant institution's rules, with the Arbitration Law filling gaps.
Step 1: Notice of Arbitration
A party wishing to commence arbitration must give the opposing party written notice of its intention. There is no prescribed statutory form, but the notice should include:
- Identification of the arbitration agreement being invoked (cite the contract clause)
- A brief description of the dispute and the relief sought
- A proposal for the arbitrator (if the clause does not specify one), or a demand that the other party propose one within a specified time
- Any relevant deadlines imposed by the contract or by applicable statutes of limitation
For institutional arbitration (ICCA, ICC, etc.), the notice of arbitration must comply with the institution's specific requirements and must be filed with — and the filing fee paid to — the institution. The institution then notifies the respondent and sets the process in motion.
Limitation Periods
Under the Limitation Law, 1958, the general limitation period for civil claims is seven years from when the cause of action arose. Commencing arbitration stops the limitation clock, just as filing a court claim does. A notice of arbitration should be sent before the limitation period expires.
Step 2: Appointment of the Arbitrator(s)
The mechanism for appointing the arbitrator(s) depends on what the parties have agreed:
Named Arbitrator in the Contract
If the parties named a specific individual in their arbitration clause, that person serves as arbitrator unless they decline or are disqualified. Many Israeli contracts name a retired judge or a specific senior lawyer as arbitrator.
Agreed Appointment Procedure
If the clause specifies a procedure (e.g., each party nominates one co-arbitrator, and those two elect a presiding arbitrator), the parties follow that procedure within any contractually specified timelines.
Court-Appointed Arbitrator
If the parties cannot agree on an arbitrator and the clause does not provide a workable mechanism, either party may apply to the relevant District Court to appoint an arbitrator under section 8 of the Arbitration Law. The court will appoint a suitable qualified person, typically from a list maintained by the court or proposed by the parties. This is a relatively quick process — courts generally act within a few weeks of a proper application.
Institutional Appointment
Under institutional rules (ICCA, ICC, etc.), the institution appoints the arbitrator if the parties cannot agree, using its panel lists and internal procedures. This avoids the need for court involvement.
Arbitrator Independence and Disclosure
Arbitrators under Israeli law are required to be independent and impartial. An arbitrator who has a conflict of interest — a relationship with a party, financial interest in the outcome, or prior involvement in the matter — must disclose it. A party that learns of a potential conflict may apply to have the arbitrator removed. Section 11 of the Arbitration Law allows removal for "justified reason."
Step 3: Preliminary Meeting and Procedural Order
Once appointed, the arbitrator typically holds a preliminary meeting (in person or by videoconference) with the parties or their lawyers to establish the procedural framework for the arbitration. Issues addressed include:
- Agreed timetable for pleadings, document production, and hearings
- Language and form of submissions
- Whether expert witnesses will be used and the procedure for expert evidence
- Whether discovery or document production will be ordered
- Confidentiality arrangements
- Location and format of hearings (in-person, video, hybrid)
- Arbitrator's fees and payment schedule
The arbitrator records these agreements in a procedural order (sometimes called a "terms of reference" in ICC arbitration). This document governs the subsequent process.
Step 4: Pleadings
The parties exchange written statements setting out their respective cases:
- Statement of Claim . Filed by the claimant, setting out the facts, the legal basis for the claim, the evidence relied upon, and the relief sought.
- Statement of Defence . Filed by the respondent, responding to each element of the claim and raising any counterclaim.
- Reply / Rejoinder. Short responses to the Defence (and Counterclaim). Arbitrators may permit further rounds but tend to limit exchanges to avoid delay.
Unlike court proceedings, there is no standard prescribed format for arbitral pleadings under the Arbitration Law. The arbitrator has broad discretion to manage submissions. In practice, many Israeli arbitrators follow a simplified version of civil court pleading conventions.
Step 5: Evidence and Document Production
Israeli law does not impose extensive pre-hearing disclosure obligations on arbitral proceedings (unlike common law discovery). Evidence is typically submitted with the pleadings as attached exhibits.
Witnesses
Witnesses generally submit written witness statements in advance of the hearing. At the hearing, the opposing party may cross-examine. The arbitrator may also ask questions.
Expert Evidence
Each party may appoint its own expert (e.g., an accountant, valuer, or technical specialist). The arbitrator may also appoint a tribunal-appointed expert under section 17 of the Arbitration Law. Party experts submit written reports; tribunal experts submit a separate report and may be questioned at hearing.
Document Production
A party seeking documents in the other party's possession must request them from the arbitrator, who may order production if the documents are relevant and material. The arbitrator has discretion to manage this process. In practice, Israeli domestic arbitrations involve limited document production; international arbitrations seated in Israel may follow the IBA Rules on the Taking of Evidence.
Inspections
In construction, real estate, and engineering disputes, the arbitrator may inspect the subject property or works — with or without the parties present. This is expressly authorised by the Arbitration Law and is commonly used in construction arbitrations.
Step 6: Hearings
The hearing is the oral phase where the parties present their cases, witnesses are examined, and legal submissions are made. The format and length depend on the complexity of the dispute.
- For simple commercial disputes, a single hearing day may suffice.
- For complex construction, technology, or financial disputes, multi-day or multi-week hearings are common.
- Hearings are private (not open to the public), which is one of arbitration's principal advantages over litigation.
The arbitrator controls the hearing and may adopt any procedure that ensures each party has a fair opportunity to present its case. The adversarial format (examination, cross-examination, re-examination) is standard in Israeli domestic arbitration.
After the hearing, the arbitrator may invite written closing submissions (legal memoranda summarising the evidence and arguments), or may hear oral closing arguments at the end of the hearing itself.
Step 7: The Award
The arbitrator's decision is called the award . Under the Arbitration Law:
- The award must be in writing and signed by the arbitrator(s).
- In a three-member tribunal, a majority award is valid; the arbitrator in the minority may record a dissent.
- The award must state the reasons for the decision unless the parties have agreed to dispense with reasons (section 23).
- An award may grant any remedy that a court could grant — damages, declarations, specific performance, account of profits, injunctions — and costs.
Types of Award
- Final award. Definitively determines all claims in the arbitration.
- Partial award. Determines some claims or some aspects of claims while others remain pending.
- Award on agreed terms. Records a settlement reached by the parties in the form of an award (giving it the force of an arbitral award).
- Costs award. Determines which party pays the costs of the arbitration and legal fees. Costs-shifting in Israeli arbitration is discretionary but commonly follows the "loser pays" principle.
Correction and Interpretation
Within the time period specified by the arbitrator (or a reasonable time if none specified), a party may apply to the arbitrator to correct clerical errors, computational mistakes, or to obtain an interpretation of an ambiguous provision in the award. The arbitrator may also correct the award on his or her own initiative.
Step 8: Enforcement of the Award
An arbitral award is not automatically enforceable as a court judgment in Israel. To enforce it, the successful party must apply to the District Court for confirmation of the award under section 28 of the Arbitration Law.
The application is usually straightforward: the court reviews the award for procedural validity but does not review the merits. Once confirmed, the award has the same force as a court judgment and can be enforced through the Execution Office (Lishkat HaHotzaa LaPoal) — including wage garnishment, bank account attachment, property seizure, and travel bans.
A losing party that wishes to oppose confirmation must apply to set aside the award under section 24 of the Arbitration Law, on one of the limited grounds specified in that section (see our guide on challenging an arbitral award).
Court Involvement During Proceedings
Israeli courts support rather than interfere with ongoing arbitration. During proceedings, a party may apply to the District Court for:
- Interim relief — attachment orders, injunctions, asset preservation orders — which the arbitrator cannot grant with the same coercive force as a court.
- Arbitrator appointment — if the appointment mechanism fails.
- Arbitrator removal — on grounds of conflict of interest or inability to act.
- Compelling a reluctant party to proceed — if one party refuses to participate in arbitration despite a valid agreement.
- Extension of time — if the arbitration runs beyond any contractual time limit.
If court proceedings are commenced in breach of an arbitration agreement, the other party may apply to the court for a stay of proceedings under section 5 of the Arbitration Law. The court must grant the stay if there is a valid, binding arbitration agreement that covers the dispute, unless the arbitration agreement is void, inoperable, or incapable of performance.
Typical Timeline
| Stage | Typical Duration |
|---|---|
| Notice of Arbitration to Arbitrator Appointment | 2–8 weeks |
| Preliminary Meeting to First Substantive Pleading | 2–4 weeks |
| Pleadings Exchange | 2–4 months |
| Hearing(s) | 1 day — 2+ weeks (depending on complexity) |
| Post-Hearing Submissions to Award | 1–4 months |
| Total (simple dispute) | 6–12 months |
Complex multi-party or technical disputes may take 18–36 months. Institutional international arbitrations tend to take longer than domestic Israeli ad hoc proceedings.
A German engineering firm came to me after discovering, mid-arbitration, that the three arbitrators in a NIS 3.2 million construction dispute had never received a complete set of the technical drawings that formed the central factual basis of the case — the documents had been cited in the statement of claim but never formally uploaded to the ICCA document platform. The respondent's counsel had not pointed this out, waiting to argue at the hearing that the evidence was inadmissible because the submission deadline had passed. Under Section 23 of the Arbitration Law 5728-1968, the tribunal has discretion to admit late evidence. We filed an urgent application to the tribunal supported by a sworn statement explaining the upload failure and the document's relevance, and the tribunal granted admission on condition that the respondent received ten additional days to respond. Missing the technical drawings would have resulted in a substantially reduced award; the procedural lesson is to verify upload confirmation receipts for every document submitted to an institutional arbitration platform.
Frequently Asked Questions
