Quick Answer: If both parties to an Israeli arbitration agree to settle before the arbitrator rules, they have two clean exit paths. They can ask the arbitrator to issue a consent award (psak din be-haskama) under Section 20 of the Arbitration Law 5728-1968 — a document with exactly the same legal force as a contested award, enforceable through the Execution Office without any separate court proceedings. Alternatively, the parties can withdraw the claim by mutual agreement, which closes the arbitration with no enforceable document. The consent award route is usually the better choice whenever any realistic chance remains that the settling party might not follow through on payment.

Settlement is the outcome most parties say they want when they start arbitration, yet it gets remarkably little attention in guides aimed at foreign parties. The discussion almost always centres on what happens if you fight to the end: how to challenge the award, how to enforce it, what appeals lie open. This guide covers the middle ground — what happens legally and practically when parties decide, somewhere between the first exchange of pleadings and the final hearing, that continuing to the end is not worth it.

Israeli law handles this well. The Arbitration Law 5728-1968 anticipates settlements and provides a specific mechanism for them. The consent award is not a lesser document than a regular arbitration ruling: it carries the same weight, travels through the same enforcement channels, and can be collected against the same assets. For foreign parties managing an Israeli dispute from abroad, that enforcement certainty matters a great deal.

1. Why Arbitrations Settle Before the Final Award

Arbitrations rarely reach a final hearing on exactly the issues they started with. Most shift somewhere along the way.

The economics change once the full cost picture is visible. A claimant reviewing the arbitrator's preliminary fee schedule and timetable for the first time may discover that a NIS 400,000 dispute could cost NIS 150,000–250,000 per side to fight through. A respondent who genuinely owes NIS 350,000 of the NIS 400,000 claimed may settle for NIS 320,000 rather than spend NIS 180,000 defending a case it will probably lose.

Pleadings do the rest. A well-drafted response can expose flaws in the claimant's damages theory. An expert report can undercut it further. Parties often settle after the first round of written submissions, when each side has read what the other actually has rather than guessing.

Preliminary hearings sometimes move things too. Many Israeli arbitrators use an early case management conference to identify the real issues and test whether they can be narrowed. That conversation can open a corridor toward settlement, particularly where the dispute is about money rather than principle.

Settlement in Israeli arbitration is treated as a routine professional achievement, not a sign of weakness. The Israel Centre for Commercial Arbitration (ICCA) encourages it in its procedural rules, and experienced Israeli arbitrators regularly ask parties whether they have explored resolution before scheduling extended hearing dates.

Section 20 of the Arbitration Law 5728-1968 is the governing provision. If, at any point before the arbitrator issues his ruling, the parties inform him they have settled, the arbitrator may — provided both parties jointly request it — record the settlement in the form of an award. That document is the consent award.

Once confirmed by the court under Section 28, it has exactly the same legal status as a contested award issued after a full hearing. Under Section 23 of the Arbitration Law, an arbitral award binds the parties and has the force of a court judgment. A consent award confirmed through the same process goes directly to the Execution Office — no separate lawsuit needed. The arbitrator does not touch the merits. He is recording what the parties agreed and giving it the formal structure of an award, not judging who was right.

In Practice: Under Section 20 of the Arbitration Law 5728-1968, the arbitrator's discretion to decline is narrow. He may refuse if the request is not genuinely joint, if the settlement terms are unlawful, or if he has reason to believe one party's consent was coerced. In practice, a joint written request accompanied by a signed settlement agreement almost always results in the award being issued. If the arbitrator sits on an ICCA panel, the ICCA secretariat coordinates the administrative steps; allow 14–30 days from the joint request to receiving the signed award document. Ad hoc arbitrators set their own pace, but most experienced Israeli practitioners issue consent awards within 3–6 weeks of a clear joint request.

The consent award also preserves confidentiality that a court judgment cannot. Arbitration proceedings in Israel are private by default. The consent award itself does not appear in any public database unless the parties take it to court for confirmation, and even then they can apply to seal the file. For commercial disputes where both sides prefer not to air grievances publicly, this matters.

3. How to Request a Consent Award

The procedural steps are straightforward, but doing them in writing avoids disputes later.

Step 1. Sign the settlement agreement first. The consent award records a settlement that already exists. Before approaching the arbitrator, the parties execute a signed settlement agreement setting out the terms: the payment amount, the timeline, any non-monetary conditions, and which party bears the arbitration costs. This agreement is the source document. The consent award formalises it.

Step 2. File a joint notice with the arbitrator. Address a brief letter to the arbitrator, signed by both parties or both sets of counsel, confirming that the dispute has been settled and asking the arbitrator to record the settlement as a consent award pursuant to Section 20 of the Arbitration Law 5728-1968. Attach a summary of the settlement terms or the agreement itself.

Step 3. Specify exactly what the award should contain. A consent award can mirror the settlement precisely: NIS 280,000 payable within 21 days, interest at the statutory rate from a stated date if payment is late, and an agreed allocation of costs. The more specific the request, the less room for argument at the enforcement stage.

Step 4. Confirm the award in court if enforcement may be needed. Court confirmation under Section 28 of the Arbitration Law is filed in the District Court. Once the confirmation order is issued, the award goes directly to the Execution Office and is enforced like any money judgment.

In Practice: Many settling parties skip court confirmation because they expect the other side to pay voluntarily. That works when trust is solid. When there is any doubt, confirm the award before the settlement payment deadline arrives, not after the debtor defaults. Confirmation under Section 28 is a routine court application and typically takes 4–8 weeks where no objection is filed. Starting confirmation the day the joint request goes to the arbitrator means it will be ready, or close to ready, by the time the payment deadline passes. Waiting until the debtor misses the deadline adds those 4–8 weeks to the recovery timeline.

4. Partial Settlements: Settling Some Claims While Continuing Others

Complex commercial disputes often bundle multiple claims. A construction contractor disputes three separate payment milestones. A landlord raises claims for unpaid rent and for property damage caused by the tenant. A joint venture partner claims breach of the JV agreement and also pursues an indemnity claim against an individual guarantor.

Israeli arbitration law does not require parties to settle everything or nothing. Section 20 of the Arbitration Law can be used for a partial settlement: the parties identify which claims they have resolved, ask the arbitrator to issue a consent award on those claims, and allow the remaining claims to proceed to a full hearing or a separate award.

In Practice: Partial consent awards require careful drafting. The award must state precisely which claims are settled and which remain open. A loosely worded consent award that says "the parties have settled their dispute" without listing the remaining open claims can later be read as a global settlement resolving everything, including claims the parties intended to keep alive. This can become a second dispute after the first was already resolved. The joint request should explicitly list: (a) which claims are being settled and on what terms; (b) which claims are expressly excluded and remain for determination; and (c) that the arbitration continues on the remaining claims without interruption. If the settled payment is needed to fund the continued phase of litigation, agree the timeline for that payment before submitting the request, so the arbitration does not stall while waiting for funds to arrive.

5. Withdrawing Without a Consent Award

Not every settlement needs a consent award. Where payment has already been made in full, or where both parties genuinely trust each other, a simple withdrawal is sometimes all that is required.

Under Section 23 of the Arbitration Law 5728-1968, the parties can agree to close the arbitration without any award being issued. The claimant files a notice of withdrawal; if the respondent consents, the arbitration is closed. There is no award, no document with enforcement power, and nothing that needs to be registered with the court or the Execution Office.

The risk is straightforward: if the paying party later fails to pay, the receiving party has no award to enforce. Starting fresh proceedings, either in arbitration or in the civil courts, to recover a sum that was already agreed adds months and costs to a dispute the parties thought they had closed.

Two situations genuinely suit withdrawal. Where the respondent has already transferred the full settlement amount and the claimant has confirmed receipt in writing, there is nothing left to enforce and the consent award adds formality with no practical use. Similarly, where the settlement is for a non-monetary outcome — a product replacement, a service delivery, or an agreed business restructuring — there is no cash sum to register as a judgment in any case.

6. Enforcing a Consent Award Through the Execution Office

A confirmed consent award is enforced through the Execution Office (Lishkat HaHotzaa LaPoal), operated by the Enforcement and Collection Authority (Rashut HaAkifa VehaGviya) under the Execution Law 5727-1967. The process is identical to enforcing any other arbitral award.

The creditor opens an execution file at any Execution Office branch. Filing fees are graduated by claim size: NIS 235 for amounts up to NIS 50,000, rising to approximately NIS 1,600 for amounts up to NIS 1 million, with higher fees for larger claims. The Execution Office then notifies the debtor, who has 30 days to pay or to file an objection through the court. If the debtor does neither, the Execution Office can:

  • Attach and freeze bank accounts electronically through the banking system
  • Garnish salary at source from the employer
  • Register a caveat (azhara) against Israeli real estate in the Land Registry
  • Seize and sell movable assets through court-authorised bailiffs
  • Issue a stay-of-exit order (tzav ikuv yetzia) preventing the debtor from leaving Israel
In Practice: Foreign creditors often assume they need a separate Israeli court judgment to enforce an arbitral award. They do not. A consent award confirmed under Section 28 of the Arbitration Law 5728-1968 goes directly to the Execution Office — no new trial, no fresh proceedings. The practical sequence is: (1) obtain the District Court confirmation order; (2) open an execution file at the nearest Execution Office branch, paying the graduated filing fee; (3) file the confirmed award and the confirmation order; and (4) instruct Israeli counsel to apply immediately for account attachments, ideally within the first 7 days of opening the file, before the debtor receives formal notice and moves assets. Account attachments are applied electronically and typically freeze accounts within 24–48 hours of the order being transmitted to the banking system through the Enforcement and Collection Authority's centralised database.

7. What Happens to Arbitration Fees When You Settle?

Settlement mid-arbitration does not automatically return the filing fees and arbitrator deposits already paid. The outcome depends on whether the arbitration is institutional or ad hoc, and on how the settlement agreement addresses costs.

In an ICCA institutional arbitration, the Israel Centre for Commercial Arbitration charges an administrative fee and an arbitrator fee calculated on the sum in dispute. When a case settles before the final hearing, the ICCA typically returns a portion of the arbitrator's deposit based on how much work was actually done. A case settling after one case management conference returns more than one settling after a full document production round and a preliminary hearing. The administrative fee itself, a percentage of the claim value subject to a minimum of approximately NIS 5,000–20,000 depending on claim size, is generally non-refundable once proceedings have started.

In ad hoc arbitrations, the arbitrator's fees follow whatever the arbitrator agreement provides. Many Israeli ad hoc arbitrators charge by the hour, so fees for work already done are kept regardless. Where a deposit was paid against future hearing time that is no longer needed, the unearned portion is usually returned. Confirm this in writing at settlement time; do not assume the arbitrator will bring it up.

On costs within the settlement itself, most Israeli arbitrations that settle end with each party bearing its own legal fees and its proportional share of the arbitrator fees, with no transfer between them. Where one party is settling a weak claim or a dispute it expected to lose, absorbing a larger share of the costs is a common concession.

In Practice: Costs are frequently negotiated as a package with the substantive settlement — and they should be. In an ICCA arbitration with a claim of NIS 2 million, the total arbitrator and administrative fees typically range from NIS 70,000–130,000, split between the parties based on the ICCA fee schedule in force at the time of filing. If you have already paid a substantial deposit and the case settles before the final hearing, how much you recover matters to the overall economics. Ask the ICCA secretariat for a running cost statement as part of the settlement negotiation, and include an explicit clause in the settlement agreement specifying which party is entitled to any balance refunded from the ICCA account. Leaving that point open generates a second argument after the first one is resolved.

8. International Arbitrations Under the ICA Law 2024

The International Commercial Arbitration Law 5784-2024 governs arbitrations seated in Israel where at least one party is a foreign entity or where the subject matter has a substantial international dimension. It replaced the international provisions that previously sat within the Arbitration Law 5728-1968.

Article 30 of the ICA Law 2024 mirrors Article 30 of the UNCITRAL Model Law on International Commercial Arbitration. It provides that where parties settle during the proceedings, the arbitral tribunal terminates the proceedings. On the parties' joint request, and provided the tribunal has no objection, it may record the settlement in the form of an arbitral award on agreed terms — the international equivalent of the consent award.

The international consent award issued under Article 30 of the ICA Law 2024 has the same status as any award under that law. Articles 35–36 of the ICA Law govern its recognition and enforcement in Israel, giving it the force of a court judgment once confirmed. For a foreign party seeking to enforce an Israeli ICA consent award outside Israel, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) applies. Israel is a signatory, and a consent award issued by an Israeli arbitral tribunal seated in Israel qualifies as a Convention award enforceable in all 170 signatory states.

In Practice: Foreign parties in ICA-governed arbitrations sometimes worry that a consent award will be harder to enforce abroad than a contested award, on the theory that it was "not really decided." Under the New York Convention, this concern is unfounded. Article I of the Convention covers "arbitral awards," and consent awards issued by a properly constituted arbitral tribunal on the parties' request are treated as awards for Convention purposes by courts in the major commercial jurisdictions — England, Germany, the United States, Singapore, and France among them. The more important due diligence step is confirming that the consent award is formally issued by the tribunal itself, not merely recorded as a contractual settlement signed by the parties outside the tribunal process. The distinction matters at enforcement: a tribunal-issued award travels under the Convention; a private settlement agreement does not.

Frequently Asked Questions

Under Section 20 of the Arbitration Law 5728-1968, the arbitrator may issue a consent award if both parties jointly request it. The discretion to refuse is narrow: typically only where the settlement records something unlawful, where one party's consent was clearly coerced, or where the request is not genuinely joint. In practice, a clear joint request accompanied by a signed settlement agreement is almost always honoured, and most experienced Israeli arbitrators issue the consent award within three to six weeks.

A consent award requires both parties to request it jointly. If one party wants the enforcement security of a formal award and the other refuses, the first party cannot compel the issue. The arbitration then either continues to a final ruling or closes by the claimant's unilateral withdrawal. Where payment has already been made, simple withdrawal is usually adequate. Where payment remains outstanding, the party expecting to receive money should push for a consent award — it is the only mechanism that preserves enforcement rights without starting fresh proceedings.

Court confirmation under Section 28 of the Arbitration Law 5728-1968 is filed in the District Court. Routine applications, where no objection is filed, typically take four to eight weeks from filing to receiving the signed confirmation order. If the other party objects, proceedings extend to several months. Once the confirmation order is in hand, opening an Execution Office file and applying for account attachments can be done within days. Start the confirmation application as soon as the joint request goes to the arbitrator, not after the payment deadline passes.

The arbitration proceedings themselves are private. The consent award does not appear in any public database unless the parties seek court confirmation, in which case a file is opened in the District Court. Parties can apply to seal the court file on confidentiality grounds. An Execution Office file is accessible to the parties and to creditors with a legitimate interest, but is not published in a searchable public registry. If confidentiality is important, address it in the settlement agreement and in any court application from the outset.

Yes. A consent award can record any obligation the parties have agreed to, including non-compete undertakings, delivery obligations, injunctions, or confidentiality terms. Monetary obligations are enforced straightforwardly through the Execution Office. Non-monetary obligations backed by a confirmed consent award can be enforced through the courts by way of a specific performance or contempt application. Draft non-monetary terms with precision: the wider the obligation, the more likely it is to be disputed at the enforcement stage.

Related Guides

Arbitration Costs in Israel: Fees, Allocation and What to Expect The Arbitration Process in Israel — Step by Step Enforcing an Arbitration Award in Israel Setting Aside an Arbitration Award in Israel ICCA Arbitration in Israel: Rules, Fees and How to File
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Adv. Eli Shimony

Licensed Israeli Attorney

Adv. Shimony advises foreign companies and individuals involved in Israeli arbitration proceedings, including negotiating settlements, drafting consent award requests, and managing enforcement through the Execution Office. He regularly acts for clients who are managing Israeli disputes remotely from abroad.

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Adv. Eli Shimony advises foreign parties on consent awards, settlement strategy, and enforcement in Israeli arbitration — including managing proceedings remotely from Europe and North America.

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