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Arbitration

Can an Israeli court stop a party from suing abroad in breach of an arbitration clause?

An Israeli court can order the party, not the foreign court. Israeli law carries no express anti-suit provision, so the relief comes from the general power to grant injunctions together with Section 16 of the Arbitration Law 5728-1968, which lists the matters a court may deal with in support of an arbitration. The order operates in personam and forbids the party from continuing the foreign claim. Courts grant it sparingly and expect the applicant to move quickly, to show a clear arbitration agreement, and to give an undertaking in damages.

Section 5 of the Arbitration Law deals with the mirror problem: when someone sues in Israel despite an arbitration clause, the court stays its own proceedings, and Section 6 does the same where the New York Convention applies. Stopping a claim filed abroad is a different exercise, because no Israeli court can direct a foreign judge. What it can do is act on a party subject to its jurisdiction and prohibit that party from pursuing the foreign action, with contempt as the sanction. Judges weigh whether the arbitration agreement plainly covers the dispute, whether the foreign filing was a tactical move, and whether the foreign forum is better placed to decide the point itself.

A foreign company facing an Israeli counterparty that has filed abroad usually has two better routes to try first. The tribunal can order the party to discontinue the foreign proceedings as an interim measure, and an order of that kind carries weight with most courts. The foreign court can also be asked to stay under Article II(3) of the New York Convention, which is the remedy the Convention was designed to give. Save the Israeli application for a case where the counterparty holds assets in Israel and the foreign forum will not act. Timing decides these applications, so file before taking any step on the merits abroad, for the same reason that a late request for a stay of Israeli proceedings fails.

⚖ In Practice
  • Governing law: Sections 5, 6 and 16, Arbitration Law 5728-1968, with the International Commercial Arbitration Law 5784-2024 applying to international cases
  • Competent authority: the District Court (Beit Mishpat Mechozi) exercising the arbitration jurisdiction under the Arbitration Law
  • Nature of the order: it binds the party rather than the foreign court, and is enforced through contempt proceedings
  • Conditions: a valid arbitration agreement covering the dispute, a prompt application, clean hands, and an undertaking to compensate the respondent if the order proves wrong
  • Timeline: an urgent application can be heard within days, and the court usually requires security before granting relief without notice
  • Alternatives first: an interim measure from the tribunal itself, and an application to the foreign court to stay under Article II(3) of the New York Convention

From the full guide: Stay of Court Proceedings in Favour of Arbitration Under Israeli Law

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Get a Free Consultation with Adv. Eli ShimonyPrepared under the direction of Adv. Eli Shimony, Eli Shimony Law Office · Editorial policy

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