ISRAEL Law and Practice Contributed by: Benjamin (Benny) Sheffer and Lance Blumenthal, S. Horowitz & Co.
Parties in regulated sectors (of which energy and infra- structure form a part) may also be subject to addi- tional approvals from sector-specific regulators or ministries, particularly where the transaction affects critical infrastructure or market structure. Albeit not a requirement, it is common for parties to consult with the ICA at an early stage to refine market definitions and assess potential competition concerns. 5.6 Labour Law Regulations Israel has a highly protective labour law system with strong statutory rights for employees and an estab- lished role for trade unions, particularly in large enter- prises and historically state-owned infrastructure companies. Collective bargaining agreements may apply at the sectoral level and, where in force, can significantly influence terms of employment. Additionally, Israeli law requires that when a business is transferred as a going concern, employees gen- erally continue their employment with the acquiring entity without interruption, and their accrued rights (such as seniority-based entitlements, pension rights and severance pay) are preserved. Changes to terms and conditions following the transfer are subject to statutory protections and, where a collective bargain- ing agreement applies, to negotiations with the rel- evant union. Where unionised workplaces are involved (in respect of which the energy, infrastructure and transport sec- tors are indeed relevant), acquiring companies may need to conduct consultations with employee repre- sentatives before implementing structural or opera- tional changes. Changes in the workforce, including dismissals or harmonisation of employment terms, must comply with statutory procedures and good faith bargain- ing requirements, and may require engagement with government agencies such as the Commissioner of Labour Relations. 5.7 Currency Control/Central Bank Approval Israel does not impose currency control restrictions on M&A transactions and does not require central bank approval for foreign exchange activities. Generally speaking, funds may be freely transferred into and
out of Israel, subject to compliance with anti-money laundering regulations, tax and sanctions regulations administered through the Bank of Israel and other regulatory authorities (if applicable in accordance with the specific case). 6. Recent Legal Developments 6.1 Significant Court Decisions or Legal Developments In Sun-Flower (et al) v Kingdom of Spain (Tel-Aviv Dis- trict Court, 25 August/1 September 2025) the court refused to enforce an award issued by the Interna- tional Centre for Settlement of Investment Disputes (ICSID) on the basis of the Energy Charter Treaty against Spain, citing (among other things) the lack of a sufficient Israeli nexus. This appears to be the first Israeli ruling on ICSID award enforcement, and it established that a better- suited location (one that has a stronger legal connec- tion) should be utilised for enforcing energy awards unless attachable assets or stronger local connections exist. As a result of the decision, it is precedent now that winning an ICSID case does not guarantee that the successful party can collect money in Israel. For relevant parties seeking to engage Israeli energy or infrastructure M&A deals, the ruling affects judg- ment enforcement risk and forum strategy in cross- border deals. 6.2 Key Developments in Renewable Energy and Cutting Emissions Renewable Energy – Significant Recent Developments The following constitutes non-exhaustive examples. • A major regulatory move approved by the Planning Administration in collaboration with the Ministry of Energy and Infrastructure has been introduced that seeks to implement that all new buildings (residential and non-residential) in Israel must install rooftop solar systems from December 2025. The regulation is expected to add nearly 3.5 GW of solar PV capacity by 2040, enough to power around 550,000 households annually.
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