Client Update | The Israeli International Commercial Arbitration Law

On February 12, 2024, the Israeli Parliament enacted the International Commercial Arbitration Law, 5774-2024.
The law will apply to arbitrations that will commence from the date of enactment of the law (even if the arbitration agreement was made before that date) and which have their seat in Israel, inter alia:
Between an Israeli party and a party whose place of business is situated outside Israel;
Between Israeli parties regarding a matter in which a substantial part of the commercial relationship between them is to be performed outside Israel;
Between Israeli parties when the subject-matter of the dispute is most closely connected to a state outside of Israel.
The new law does not repeal the Arbitration Law of 1968, which will continue to apply to non-international arbitrations – that is, arbitrations between Israeli parties in relation to commercial relationships or disputes relating to Israel.
The law reflects an approach that promotes the autonomy of the parties, strengthens the authority of the arbitrator and limits the court’s supervision over the arbitration. Thus, for example, according to the law, an arbitrator may grant interim measures and rule on his jurisdiction.
Of crucial importance is the drafting of the arbitration agreement, which in the absence of details and accuracy may lead to unnecessary costs. Thus, for example, unlike the Arbitration Law of 1968, in which the default position regarding the number of arbitrators, is that one arbitrator will be appointed, in the new law, in the absence of an agreement between the parties, three arbitrators will be appointed.

To read the law (in Hebrew), click here

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