ISRAEL Law and Practice Contributed by: Zvi Bar-Nathan and Daphna Kapeliuk, Goldfarb Gross Seligman & Co
court any discretionary power and directs it to “refer the parties to arbitration” unless it finds that any of the exceptions enumerated in the Article – that is, that the agreement “is null and void, inoperative or incapable of being performed” – exist. Article 8 of the ICA Law requires that the arbitration agreement be in writing. The writing requirement may be satisfied when the agreement is entered into by way of an electronic message, as defined in the Elec - tronic Signature Law 2001, and is deemed to have been made in writing if the message can be saved and retrieved. The Article further provides the incorpora - tion by reference clause, according to which when a provision in a contract, by which provisions of a document which contains an arbitration clause shall apply to that contract, then, that contract constitutes a written arbitration agreement. By this way, Israel has adopted a broad definition of a written agreement which is in line with technological developments. 3.2 Arbitrability The ICA Law does not contain a provision regarding the arbitrability of disputes. The Arbitration Law pro - vides that an arbitration agreement which concerns matters that cannot be the subject of an agreement between the parties is invalid. It is expected that the same will apply in cases subject to the ICA Law. 3.3 National Courts’ Approach There has not been any critical case law on the approach of courts in the enforcement of arbitration agreement under the ICA Law. It should be noted, however, that before the enactment of the ICA Law, the courts’ approach in the interpretation of Article II(3) did not correspond to the wording of the Article. Despite broad international acceptance of the referral rule in Article II(3) of the New York Convention, Israeli courts have not fully recognised it. Although there are instances where a court’s rhetoric suggests recogni - tion of this principle, a close analysis of the case law reveals that, in fact, Israeli courts have failed to follow a uniform discourse on the issue and in some cases concerning the enforcement of international arbitra - tion agreements, the courts apply rules regarding domestic arbitration, thereby increasing their discre - tion in not staying proceedings. It is hoped now, as the
International Arbitration Law is in force, that the courts will follow the wording of the Article strictly. 3.4 Validity According to Article 17 (a) of the ICA Law, an arbitra - tion agreement shall be treated as independent of the other clauses of a contract, and the decision that the contract is null and void shall not affect ipso jure the invalidity of the arbitration agreement.
4. The Arbitral Tribunal 4.1 Limits on Selection
The parties are free to appoint any person they wish to the tribunal. They may agree on the method of selec - tion of the tribunal. According to Article 11 of the ICA Law, the parties are free to determine the number of
arbitrators in the tribunal. 4.2 Default Procedures
According to Article 11 (c) of the ICA Law, when the parties have not agreed on the number of arbitrators, there shall be three arbitrators. According to Article 12 (b) of the ICA Law, when the parties do not agree on the procedure of appointing the tribunal, then in a tribunal with three arbitrators, each party shall appoint one arbitrator and the arbitra - tors appointed by the parties shall appoint the third arbitrator who shall serve as the presiding arbitrator. If a party fails to appoint an arbitrator within 30 days of the receipt of a request to do so, or if the two appoint - ed arbitrators fail to agree on the third arbitrator within 30 days of their appointment, a party may apply to the court and request that it appoint the arbitrator. 4.3 Court Intervention Unless requested by a party to appoint an arbitrator, the court cannot intervene in the appointment pro - cedure. 4.4 Challenge and Removal of Arbitrators Article 14 (a) of the ICA Law provides that the parties are free to agree on a procedure for challenging an arbitrator, subject to the provisions of Article 14 (c), according to which if a request for a challenge submit - ted under the agreed procedure is denied, the chal -
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