Quick Answer: In Israel, arbitrators are primarily appointed by agreement between the parties, or as specified in the arbitration clause. When parties cannot agree on an arbitrator, either party may apply to a court, which will make the appointment. A party can challenge an arbitrator who has a conflict of interest or lacks impartiality, first through the arbitral tribunal itself and then, if necessary, through the courts. Getting the appointment right — especially as a foreign party — is one of the most important steps in any Israeli arbitration.

One of the first practical hurdles in any arbitration is choosing who will decide the case. Unlike litigation, where a judge is assigned by the court, arbitration puts the selection of the decision-maker largely in the hands of the parties. That autonomy is one of arbitration's greatest advantages — but it can also become a source of conflict, delay, and, if mishandled, a basis for later challenging the award.

For foreign nationals, diaspora families, and international businesses entering into or already locked in an Israeli arbitration, understanding how arbitrator appointment and challenge works under Israeli law is not optional — it is foundational. This guide explains the rules that apply, the choices you face, and the practical steps you should take to protect your position from the very beginning.

1. The Legal Framework for Arbitrator Appointment in Israel

Israeli arbitration is governed by two parallel legal regimes. Domestic arbitrations — those between Israeli parties or with a purely domestic character — are governed by the Chok HaBorrerut (Arbitration Law 1968). International commercial arbitrations are now governed by the International Commercial Arbitration Law 2024 (the ICA Law), which is modelled closely on the UNCITRAL Model Law and brought Israel's framework into alignment with global standards.

Under both regimes, the core principle is the same: the parties are free to agree on the procedure for appointing arbitrators. The statute only fills gaps where the parties have not agreed. Key rules under the Arbitration Law 1968 include:

  • The arbitration agreement may name an arbitrator directly, or specify a procedure for appointing one.
  • If the agreement provides for a sole arbitrator and the parties fail to agree within a reasonable time, either party may apply to the court to make the appointment.
  • If the agreement provides for a panel of three arbitrators, each party appoints one, and those two appoint the third (the chair). If the two party-appointed arbitrators cannot agree on the chair, the court appoints.
  • A named arbitrator who declines the appointment, dies, or becomes unable to serve triggers the same fallback: court appointment if the parties cannot agree on a replacement.

Under the ICA Law 2024, the framework is broadly similar but uses the UNCITRAL Model Law language. Parties to an international arbitration seated in Israel benefit from clearer default rules and greater certainty about what happens when the appointment mechanism breaks down.

2. How Parties Appoint an Arbitrator: The Step-by-Step Process

In practice, the appointment process follows a predictable sequence once a dispute arises and one party invokes the arbitration clause.

Step 1 — Read the clause carefully. Your arbitration agreement or the rules of any administering institution (such as the Israel Centre for Commercial Arbitration, ICCA) will specify how many arbitrators are to be appointed and the procedure for doing so. Some clauses name an arbitrator directly; others simply say "one arbitrator" or "a panel of three," leaving the mechanics to be agreed later.

Step 2 — Exchange proposals. Where no arbitrator is named, the party initiating arbitration usually proposes one or more candidates. The other side responds with agreement or counter-proposals. It is common practice for each party to propose three candidates, so that the other can choose from the list.

Step 3 — Candidate disclosure. Any proposed arbitrator must disclose, in writing, any circumstances that could reasonably give rise to doubts about their impartiality or independence. This is not merely a courtesy — it is a legal requirement under both the Arbitration Law 1968 and the ICA Law 2024. As a foreign party, you should actively request this disclosure; do not wait for it to be volunteered.

Step 4 — Confirm acceptance. Once the parties agree on a name, the arbitrator confirms their acceptance in writing, confirms their availability, and states their fee expectations. At this point the tribunal is constituted and the arbitration can formally begin.

Step 5 — Court appointment if agreement fails. If the parties cannot agree within a reasonable period (typically 30 days after a party's written request for appointment, though the contract may specify a different timeframe), either party may apply to the relevant Israeli court — usually the District Court — for a court appointment. The court will consider the nature of the dispute, the qualifications needed, and the parties' preferences, and will appoint an arbitrator it considers suitable.

3. Sole Arbitrator vs Three-Member Panel: Which Should You Choose?

Many disputes in Israel are resolved before a sole arbitrator. A single-arbitrator tribunal is faster and significantly cheaper — there is only one set of fees, one schedule to coordinate, and one deliberation stage. For disputes of moderate value (say, under NIS 2–5 million), a sole arbitrator is almost always the right choice.

A three-member arbitral tribunal makes sense when:

  • The dispute is large and complex, justifying the higher cost and longer timeline.
  • The subject matter requires expertise in more than one field (e.g. a technology contract dispute where one arbitrator has legal expertise and another has technical expertise).
  • The parties are from different jurisdictions and each wants assurance that their perspective will be represented — the party-appointment model gives each side "their" arbitrator on the panel, alongside a neutral chair.
  • The industry or transaction type traditionally uses three-member panels (e.g. international M&A, construction, commodities).

One important nuance for foreign parties: in a three-member panel, the two party-appointed arbitrators are not required to be neutral in the same way as the chair. They may — within the limits of the law and the applicable institutional rules — be perceived as having some alignment with the appointing party. This is different from many civil-law systems. If you are unfamiliar with this dynamic, it is worth discussing with Israeli counsel before you agree to a panel structure.

4. Arbitrator Qualifications and the Disclosure Obligation

Israeli law does not impose a general licensing requirement for arbitrators — any person the parties agree to appoint can serve, unless the parties' agreement or the applicable institutional rules set specific requirements. In practice, however, most commercial arbitrators in Israel are:

  • Retired judges (particularly former District Court or Supreme Court justices, known as shoftim be-dima'on).
  • Senior attorneys with specialist expertise in the relevant field (real estate, corporate, technology, construction, etc.).
  • Academics or technical experts where the dispute is predominantly factual rather than legal.

Where the parties choose to arbitrate under ICCA rules or international institutional rules, those rules will typically impose their own qualification and independence standards for the chair of a three-member panel.

The disclosure obligation is the cornerstone of arbitrator impartiality. Under Section 11 of the Arbitration Law 1968 and Article 12 of the ICA Law 2024, a proposed arbitrator must disclose — before accepting the appointment — any fact or circumstance that could reasonably give rise to doubts about their independence or impartiality. This includes:

  • Prior professional relationships with either party, their counsel, or key witnesses.
  • Financial interests in the outcome (even indirect interests through fund holdings).
  • Prior involvement in related disputes or prior expressions of opinion on the legal issues at stake.
  • Family relationships with either party.
  • Prior appointments by either party in other arbitrations (repeated appointer relationships can create an appearance of partiality).

An arbitrator who fails to disclose a material conflict at the outset — and where the other party later discovers this — creates grounds for both challenging the arbitrator and, ultimately, challenging the award itself. Always ask the proposed arbitrator for a written conflicts check before confirming the appointment. If you are the one proposing a candidate, ensure that candidate has conducted a thorough search of their own.

5. Grounds for Challenging an Arbitrator in Israel

Even after an arbitrator is appointed, a party may challenge them if circumstances arise — or come to light — that cast doubt on their independence or impartiality. Under Israeli law, the right to challenge is a serious procedural safeguard, not a tactical tool for delay. Courts treat cynical challenge applications harshly.

The legal standard. The test is objective: would a reasonable, informed third party, aware of all the circumstances, have justifiable doubts about the arbitrator's impartiality or independence? It is not necessary to prove actual bias — the appearance of partiality is sufficient. This standard applies under both the Arbitration Law 1968 and the ICA Law 2024.

Common grounds that have supported successful challenges in Israeli arbitration include:

  • Undisclosed prior relationship: The arbitrator previously acted as counsel for one of the parties, or for a corporate affiliate, without disclosing this.
  • Financial conflict: The arbitrator holds shares in a company that is a party or has a material financial interest in the outcome.
  • Repeat appointments: One party has appointed the same arbitrator in several prior arbitrations, creating an economic dependence that compromises neutrality.
  • Procedural conduct: The arbitrator's conduct during proceedings — consistently favouring one party, refusing to hear evidence, or communicating ex parte (outside the hearing, with only one side) — may support a challenge, though this bar is higher.
  • Post-appointment disclosure: A circumstance arises after appointment (e.g. the arbitrator takes on employment with a party's major client) that should be disclosed and, if not, may be challenged.

Timing matters critically. A party who becomes aware of a potential ground for challenge must act promptly. If you sit on a known ground — continuing to participate in the arbitration while intending to raise the challenge later — an Israeli court is very likely to treat this as a waiver. The rule is: challenge quickly or lose the right.

6. The Procedure for Challenging: First the Tribunal, Then the Court

Under Israeli law (mirroring the UNCITRAL Model Law approach adopted in the ICA Law 2024), a challenge follows a two-stage process.

Stage 1 — Challenge to the tribunal. The challenging party submits a written application to the arbitral tribunal itself — including to the arbitrator being challenged. The application must state the grounds clearly and be filed within 15 days of the party becoming aware of the ground for challenge (under the ICA Law; the Arbitration Law 1968 does not specify an exact period but requires prompt action). The arbitrator may recuse themselves voluntarily, or the remaining arbitrators (in a panel) may decide the challenge. If the challenge succeeds at this stage, a replacement arbitrator is appointed following the same procedure as the original appointment.

Stage 2 — Application to court. If the tribunal (including the challenged arbitrator) rejects the challenge, the challenging party may apply to the competent Israeli court — typically the District Court — for a ruling. Under the ICA Law 2024, this court application must be filed within 30 days of receiving notice that the tribunal has rejected the challenge. The court does not re-examine the merits of the dispute; it focuses only on the challenge itself. While the court application is pending, the arbitral tribunal may — and typically does — continue the proceedings, including proceeding to an award.

What happens if a biased arbitrator is not challenged in time? The ground does not disappear entirely. Under Israeli law, an award made by a partial or conflicted arbitrator can still be challenged after the award is rendered, on the basis that the composition of the tribunal was improper. However, courts are significantly less sympathetic to a party that failed to raise the issue during the proceedings when it had the opportunity to do so.

7. Practical Tips for Foreign Parties Entering Israeli Arbitration

If you are a foreign national, diaspora family member, or international business entering into a contract with an Israeli party, or already in a dispute heading to Israeli arbitration, the following steps will protect your position on the arbitrator appointment issue.

Draft the clause carefully. The best time to think about arbitrator appointment is before any dispute arises — when drafting the arbitration clause. Consider specifying: the number of arbitrators; the qualifications required (e.g. "a retired Israeli judge" or "a chartered accountant with commercial arbitration experience"); whether ICCA rules or international rules will apply; the language of the proceedings; and the timeframe for appointment. A well-drafted clause prevents most appointment disputes before they start. See our guide on drafting an arbitration clause in Israel.

Do your own research on candidates. Before agreeing to a proposed arbitrator, research their background. Israeli arbitrators are often visible through published awards (where not confidential), academic publications, and bar association records. Ask your Israeli counsel whether they know the candidate, and whether they have any prior history with the other side's counsel.

Request a written conflicts declaration. Do not rely on a verbal assurance of impartiality. Before confirming any appointment, request a signed declaration covering prior relationships with the parties, their counsel, any affiliated entities, and any financial interests. Under both Israeli arbitration laws, this is your right.

Use institutional rules for high-value disputes. For significant international disputes, consider agreeing to ICCA rules or international institutional rules (ICC, LCIA, etc.) rather than purely statutory ad hoc arbitration. Institutional rules provide a structured appointment process, an independent appointing authority, and clear challenge procedures — reducing the risk of procedural disputes that can bog down the arbitration.

Act fast if a conflict arises. If you discover a potential ground for challenge after the arbitration begins, consult Israeli counsel immediately. Waiting while the arbitration proceeds — even for a few months — can amount to a waiver of the right to challenge. Speed is everything.

Keep records of everything. Document all communications about the appointment process, all disclosure requests and responses, and all circumstances that could later be relevant to a challenge. If you do end up in a challenge application before an Israeli court, a clear contemporaneous record of how you handled the appointment will be invaluable.

In Practice: When your arbitration agreement designates ICCA or another institution for appointment, use that institution's formal process — do not shortcut it with an informal agreement on a name between the lawyers. Informal appointments that bypass the institution's conflicts-check procedure have been challenged at the award stage, with courts finding the tribunal was not properly constituted under the agreed rules. A few days saved at the appointment stage can cost months of delay and the entire award at the challenge stage.
In Practice: A challenge filed three months after you first became aware of the conflict ground will almost certainly be held to be a waiver by an Israeli court or tribunal. Continuing to participate in hearings while aware of a potential conflict — even attending one more substantive session — can be treated as acquiescence. If you need time to gather evidence before filing, document your timeline from the moment you learned of the issue, keep that timeline in writing, and file as quickly as possible. Speed and contemporaneous records are the two requirements for a credible challenge application.

A French technology company came to me after discovering, five months into an ICCA arbitration over a NIS 4.5 million software licensing dispute, that the sole arbitrator had previously acted as legal counsel for the Israeli respondent's parent company in an unrelated transaction two years earlier — a relationship not disclosed at the time of appointment. Under Section 11 of the Arbitration Law 5728-1968, the arbitrator's duty of disclosure extends to prior professional relationships with corporate affiliates of either party. We filed a challenge with the ICCA challenges committee immediately upon discovering the relationship through a registry search, supported by a sworn statement documenting when we first learned of the connection. The ICCA committee upheld the challenge, removed the arbitrator, and appointed a replacement. Because we had acted within two weeks of discovery, the court found no waiver; had we attended one more substantive hearing session after learning of the conflict, the outcome would likely have been different. Conduct a thorough professional history search on any proposed arbitrator before confirming the appointment.