ISRAEL Law and Practice Contributed by: Joseph (Yossi) Ashkenazi, Haim Machluf and Roy Schondorf, Herzog Fox & Neeman
If the opposing party successfully proves any of the above conditions, the foreign judgment will not be declared enforceable in Israel. 4. Arbitral Awards 4.1 Legal Issues Concerning Enforcement of Arbitral Awards Until recently, all arbitration proceedings in Israel were exclusively governed by the Israeli Arbitration Law of 5728-1968 (the “Arbitration Law” or the “Old Law”) and its supplementary regulations. While this law was applicable to both international and non-internation - al arbitral proceedings, it did not take into account developments in the field of international arbitration in the years that followed its enactment. On 12 February 2024, the International Commercial Arbitration Law, 5784-2024 (the “International Arbitra - tion Law” or the “New Law”) was adopted by the Knes - set. The New Law incorporates into Israeli domestic legislation the main tenets of the 1985 UNCITRAL Model Law on International Commercial Arbitration. While the Old Law still applies to non-international arbitration proceedings, the New Law provides a novel regulatory framework for the enforcement and recog - nition of international arbitral awards (as defined in Section 3 of the New Law) that is in line with the provi - sions of the UNCITRAL Model Law. As demonstrated in Article 3 (b) of the new law, although the law in its entirety applies to international commercial arbitra - tions seated in Israel, some of its provisions apply also to international arbitrations seated outside of Israel, in situations where Israeli courts are resorted to in the context of such arbitrations, eg, in the matter of stay - ing the court’s proceedings and referring the dispute to arbitration pursuant to an agreement between the parties (Article 9), or the court’s examination of the possibility of granting interim relief prior to, or during, the arbitration proceedings, as well as the recognition and enforcement of such relief issued by an arbitral tribunal seated outside of Israel (Articles 10 and 24). Whereas non-international arbitral awards, which are governed by the Old Law, must first be approved by the Israeli court before they can be enforced via
execution proceedings, international arbitral awards, which are governed by the New Law, require an appli - cation for recognition and enforcement of the award. In practice, it is unclear whether the procedure estab - lished in the New Law is substantively different from that under the Old Law, and some Israeli courts have similarly raised questions on this issue, as demon - strated in Civil Appeal 15299-03-24 Hilton Worldwide Manage Limited v Michel Ohayon (Nevo, 25 October 2024). Until there is a sufficient body of case law under the New Law, it is difficult to draw concrete conclu - sions about its interpretation and implications in this respect. With regards to non-international arbitrations, the award debtor may object to the award’s confirmation in court, by either appealing the award (though an appeal will be possible only if the arbitration agree - ment allows for an appeal, and even then the grounds for an appeal are very limited) or by filing a motion to revoke the award (within 45 days), where the grounds for revocation are also very limited (and include only procedural rather than substantive grounds). The award debtor may do so before or after the award creditor filed their motion for confirmation (but not after the award has been confirmed). With respect to international arbitration awards, a distinction is made in the New Law between awards issued in arbitrations seated in Israel and those issued in arbitrations seated outside of Israel (Article 3 (b)). Award debtors in international arbitrations seated in Israel may file either a motion to revoke the arbitral award based on the grounds in the New Law (which strictly adhere to the grounds listed in the Model Law), or an objection to a motion to recognise and enforce an international arbitration award. The substantive grounds for the consideration of such a motion are the same grounds stipulated in the New York Conven - tion on the Recognition and Enforcement of Foreign Arbitral Awards 1958. Conversely, award debtors in international arbitration proceedings seated outside of Israel may only file an objection to a motion to rec - ognise and enforce an international arbitration. Further, the ability to appeal an international arbitral award to an Israeli court was eliminated from the New Law, regardless of the seat of arbitration. That said,
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