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Arbitration

What happens if the parties cannot agree on an arbitrator in Israel?

If the arbitration agreement does not name an arbitrator or set a workable appointment method, and the parties cannot agree, either side can apply to the District Court to appoint one. Section 8 of the Arbitration Law 5728-1968 gives the court power to make the appointment, and by default the dispute is heard by a single arbitrator unless the agreement says otherwise. The court can also appoint where an agreed mechanism fails, for example when a party refuses to nominate. This judicial backstop prevents a reluctant party from blocking the arbitration simply by withholding agreement.

The Arbitration Law sets out a default framework that fills gaps in the parties' agreement. The First Schedule provides that, absent contrary agreement, there is one arbitrator, so parties who assumed a three-member panel may be surprised. Where the contract specifies an appointing body, such as an arbitration institution, the head of the Bar Association, or a named professional association, that mechanism governs. Only if there is no agreed method, or the agreed method breaks down, does the court step in under Section 8 on the application of a party. The court will appoint a suitable arbitrator, often after inviting the parties to propose candidates. How appointment and challenge work in detail is covered in Appointing and Challenging an Arbitrator in Israel.

To avoid a court detour, a well-drafted clause should name the arbitrator or, better still, a neutral appointing authority that will act if the parties deadlock. Foreign parties in particular benefit from designating an institution, so that appointment does not depend on cooperation from a counterpart who may stall. If you are already deadlocked, applying to the District Court is straightforward, but it adds time and cost, and the other side can contest the candidate's suitability or independence. Building a clear appointment mechanism into the contract at the drafting stage is the simplest protection. How the case unfolds once the arbitrator is in place is set out in The Arbitration Process in Israel.

⚖ In Practice
  • Governing law: Section 8, Arbitration Law 5728-1968 (court appointment); First Schedule default of a single arbitrator
  • Competent authority: the District Court (Beit HaMishpat HaMechozi) on the application of a party
  • Default panel size: one arbitrator unless the agreement provides otherwise
  • When the court acts: no agreed method, or an agreed method that fails, for example a party refusing to nominate
  • Typical timeline: an appointment application is usually resolved within a few weeks to a few months
  • Drafting fix: name an arbitrator or a neutral appointing institution in the clause to avoid court involvement

From the full guide: Appointing & Challenging an Arbitrator in Israel

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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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