Can parties agree to appeal an arbitration award to a second arbitrator in Israel?

For most of its history Israeli arbitration offered no true appeal: an award could only be challenged on the narrow setting-aside grounds, where the court examines process and authority rather than whether the arbitrator decided correctly. The 2008 amendment to the Arbitration Law changed that by creating an opt-in appeal mechanism. Under Section 21A, parties who want a second look at the merits can build it into their agreement in one of two ways. They can provide for an appeal before a different arbitrator, who reviews the first award much as an appellate court reviews a judgment, or they can agree that either side may appeal to the District Court, but only on a substantial error in the law that caused a miscarriage of justice. For the appeal to be available, the first award generally must be reasoned.

For commercial parties, including foreign businesses, this is a drafting decision to make at the contract stage, not after a disappointing award. If your arbitration clause is silent, you cannot manufacture an appeal later simply because you lost; you are confined to applying to set the award aside on the limited statutory grounds. The trade-off is real: an internal appeal adds a layer of cost and time and sacrifices some of arbitration's prized finality, but it provides a safety valve in high-value disputes where a single wrong decision would be hard to live with. Parties who choose the Section 21A route should also state the appeal arbitrator's identity or appointment method and the time limit to file the appeal.

From the full guide: Challenging an Arbitral Award in Israel

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