Which disputes cannot be resolved by arbitration in Israel?

Arbitrability in Israel turns on a single test set by Section 3 of the Arbitration Law 5728-1968: an arbitration agreement is valid only for a matter that the parties could resolve by private agreement. Rights the parties can freely dispose of, such as contract, property, and money claims, may be handed to an arbitrator. Matters that engage the public interest or third parties fall outside that reach. Criminal liability cannot be arbitrated, because the state, not the parties, controls prosecution. Questions of personal status, chiefly marriage and divorce, sit within the exclusive jurisdiction of the religious and family courts and cannot be delegated to an arbitrator. The same applies to matters a statute reserves to a named court or regulator.

The practical consequences matter for anyone drafting a contract. A well-drawn commercial arbitration clause is safe, but an attempt to route a family, status, or regulatory matter into arbitration will not hold, and an award made on a non-arbitrable subject can be set aside under Section 24 or refused enforcement as contrary to public policy. Where a single dispute mixes arbitrable and non-arbitrable elements, an arbitrator may be able to decide only the private-rights part. For foreign parties, the common error is assuming that any disagreement can be swept into arbitration. Keeping clauses focused on commercial and civil claims avoids a later fight over the tribunal's authority.

From the full guide: Introduction to Israeli Arbitration Law

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