IsraelLawCan an Israeli arbitration be conducted entirely in English and apply foreign substantive law?
Under Section 3 of the Arbitration Law 5728-1968, parties to an arbitration agreement may agree on any procedural rules, including the language of proceedings, the seat of arbitration, and the number and method of appointing arbitrators. The law does not prescribe Hebrew as the language of proceedings. Parties conducting international commercial arbitration in Israel commonly choose English and frequently incorporate institutional rules — LCIA, ICC, or AAA/ICDR — which are themselves typically conducted in English. As for substantive law, Israeli contract and commercial law generally respects choice-of-law clauses: where parties have chosen a foreign law to govern their contract, that law applies to interpret and determine their contractual rights, and the arbitrator applies it accordingly. Under the International Commercial Arbitration Law 5784-2024 (*Hok HaBoreroot HaMischarit HaBeinleumit*), Article 28 expressly allows the arbitral tribunal to apply the law designated by the parties.
For foreign companies contracting with Israeli counterparts, agreeing in writing on English-language arbitration and a preferred foreign substantive law provides significant procedural certainty. The arbitration clause should state the governing law expressly and separately specify the language of arbitration — silence on either point can result in default to Hebrew proceedings and Israeli substantive law. Arbitral awards rendered in English under foreign law in an Israeli-seated proceeding are still subject to Israeli challenge grounds under Section 24 of the Arbitration Law or Article 34 of the ICA Law: the procedural frame is Israeli even if the language and substantive law are not. For full guidance on structuring arbitration clauses for cross-border contracts involving Israel, see the international commercial arbitration guide.
- Governing law: Section 3, Arbitration Law 5728-1968; Article 28, International Commercial Arbitration Law 5784-2024 (ICA Law)
- Choice of language: any language by agreement — English is the most common in international Israeli arbitrations; specify expressly in the clause
- Choice of substantive law: any national law by agreement; if not specified, the arbitrator applies the law most closely connected to the dispute
- Institutional rules: ICC, LCIA, AAA/ICDR, and ICCA rules are all valid choices for Israeli-seated international arbitrations
- Challenge deadline: 45 days from receipt of award under domestic Arbitration Law; 90 days under the ICA Law — the language of the award does not affect this deadline
- Enforcement: awards in English with foreign-law reasoning are enforceable in Israel; translation into Hebrew may be required when filing court documents
From the full guide: International Commercial Arbitration in Israel: A Complete Guide
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