Can an Israeli court refer a lawsuit that has already been filed to arbitration?

Israeli courts have three referral tools that are easily confused with one another. Section 79A lets the judge decide the case by compromise on a broad basis rather than by strict law. Section 79B sends the case out to an arbitrator. Section 79C sends it to mediation. Under Section 79B the court either appoints the arbitrator or approves the one the parties have chosen, sets the framework for the reference, and removes the case from its own list while the arbitration runs. The award is then confirmed or challenged in the ordinary way under Sections 23 and 24 of the Arbitration Law, exactly as it would be in a purely contractual arbitration.

For a foreign party this route is attractive and risky in the same breath. It buys speed, an arbitrator with subject-matter expertise, hearings that can run in English by agreement, and privacy that a public court file does not offer. What it costs is the appeal. An arbitral award cannot be re-argued on the merits, and the grounds for setting it aside under Section 24 are narrow and largely procedural. Before consenting, settle in writing the language of the proceeding, whether the arbitrator must apply substantive law, whether a reasoned award is required, and how the fees are divided, because those terms become much harder to renegotiate once the referral order is signed.

From the full guide: Arbitration vs. Litigation in Israel: A Side-by-Side Guide

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