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Arbitration

Is an arbitrator in Israel bound by the rules of evidence?

Generally no. Under the Arbitration Law 5728-1968, an arbitrator is not bound by the rules of evidence or the rules of civil procedure that govern the courts, unless the parties agree otherwise in the arbitration agreement. The default terms in the First Schedule to the Law give the arbitrator flexibility over how evidence is received and how the proceeding is run. The arbitrator must still act fairly, hear both sides, and observe the principles of natural justice.

The Arbitration Law 5728-1968 supplies a set of default terms in its First Schedule that apply whenever the parties have not stipulated their own. Among them, the arbitrator is released from the formal laws of evidence and from the procedural rules practised in court, which is one of arbitration's main attractions: informal documents, streamlined timetables, and pragmatic handling of testimony are permitted. Parties who want a more court-like process can contract out of this default, for example by requiring the arbitrator to decide according to substantive law or to follow specified procedural rules. Whatever the parties choose, the arbitrator's discretion over evidence is procedural and does not license ignoring the agreement. The framework is set out in the guide to Israeli arbitration law.

Freedom from the evidence rules does not mean freedom from fairness. Israeli courts consistently require an arbitrator to give each party a genuine opportunity to present its case and to respond to the other side, and a serious breach of natural justice is a recognized ground to ask the court to set the award aside. For a foreign party this balance is worth understanding before drafting the clause: leaving the default in place buys speed and informality, while specifying that the arbitrator must apply the rules of evidence or reason according to law buys predictability. The choice should be made deliberately when drafting the arbitration clause, not left to chance.

⚖ In Practice
  • Governing law: Arbitration Law 5728-1968, First Schedule (default terms applying unless the parties agree otherwise)
  • Competent authority: the District Court (Beit Mishpat Mechozi) supervises and hears applications to confirm or set aside awards
  • Default position: the arbitrator is not bound by the court rules of evidence or civil procedure
  • Mandatory floor: the arbitrator must observe natural justice and give both sides a fair hearing
  • Opting out: parties may require the arbitrator to follow the rules of evidence or to decide according to substantive law
  • Risk if breached: denying a party a fair opportunity to be heard is a ground to set aside the award

From the full guide: Introduction to Israeli Arbitration 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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