ISRAEL Law and Practice Contributed by: Zvi Bar-Nathan and Daphna Kapeliuk, Goldfarb Gross Seligman & Co
1. General 1.1 Prevalence of Arbitration
tion is the court authorised to adjudicate the matter agreed to be submitted to arbitration, pursuant to any law. However, the Article specifies that matters which are in the jurisdiction of the magistrate courts shall be within the jurisdiction of the district courts. This means that any specialised courts, such as the labour court, may have jurisdiction with respect to matters concerning arbitration in cases for which they have jurisdiction; however, the magistrate courts will not have such jurisdiction, and the district courts will have the jurisdiction to hear and decide on matters of inter - national arbitration instead.
In domestic disputes, public court litigation is the method for the resolution of disputes preferred by many commercial players. While domestic arbitra - tion is not very common, international arbitration has gained prominence in the past decade in Israel. In February 2024, Israel adopted the International Com - mercial Arbitration Law, 2024 (the “ICA Law”), which is based on the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”). 1.2 Key Industries There has been no increase in international arbitration activity in Israel in 2024–2025 in a specific industry. However, the number of complex international arbitra - tions in the energy and infrastructure sectors is grow - ing. Additionally, as many technology firms and start- ups are more and more involved in the international arena, there are more arbitrations involving technology disputes. 1.3 Arbitration Institutions The leading arbitration institutions used in Israel in international arbitration are the International Chamber of Commerce (ICC) and the London Court of Interna - tional Arbitration (LCIA). As Israeli players are not well acquainted with all arbitral institutions, they usually opt for the ICC or the LCIA. Israeli parties opt less often for the International Centre for Dispute Resolu - tion (ICDR) or the China International Economic and Trade Arbitration Commission (CIETAC), and feel more at ease with the ICC and the LCIA. 1.4 National Courts The Israeli court system comprises three levels of court:
2. Governing Legislation 2.1 Governing Law
The Arbitration Law, 1968 (the “Arbitration Law”), gov - erns domestic arbitration, and the ICA Law governs
international commercial arbitration. 2.2 Changes to National Law
The enactment of the ICA Law is a major change in Israeli arbitration legislation. Until the enactment, arbitration (both domestic and international) was regulated by the Arbitration Law. Now that there are two separate laws, it is expected that the courts will develop distinct case law on international arbitration.
3. The Arbitration Agreement 3.1 Enforceability
When a party files a claim before a state court in a dispute that is subject to an international arbitration agreement, the court will at first wait for the defend - ant’s reply to see whether the defendant agrees to its jurisdiction or requests a stay of proceedings due to the arbitration clause. When a party does not object to the jurisdiction of the court, the court will hear the dispute submitted to it. Article 9 of the ICA Law adopts the wording of the Model Law with respect to the enforcement of interna - tional arbitration agreements. The Article incorporates the enforcement provision of Article II(3) of the New York Convention, which, by implication, denies the court any discretionary power and directs it to “refer
• magistrate courts; • district courts; and • the Supreme Court.
The Supreme Court is the highest judicial instance in the country. In domestic arbitrations, the courts with jurisdiction are those with respect to such matters in court litigation. In international arbitration, Article 7 of the ICA Law provides that the court having jurisdic -
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