{"id":283038,"date":"2024-10-02T16:23:02","date_gmt":"2024-10-02T14:23:02","guid":{"rendered":"https:\/\/dailyjus.com\/?p=283038"},"modified":"2024-10-02T16:23:02","modified_gmt":"2024-10-02T14:23:02","slug":"2023-arbitration-year-in-review-israel","status":"publish","type":"post","link":"https:\/\/dailyjus.com\/index.php\/2024\/10\/02\/2023-arbitration-year-in-review-israel\/","title":{"rendered":"2023 Arbitration Year In Review – Israel"},"content":{"rendered":"\n
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This article was featured in Jus Mundi<\/a>‘s 2023 Arbitration Year in Review<\/strong>, in collaboration with VYAPs, a yearly collection of articles from jurisdictions all around the globe updating you on arbitration-related developments from the previous year.<\/p>\n\n\n\n

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Download now<\/a><\/div>\n<\/div>\n<\/blockquote>\n\n\n\n
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THE AUTHORS:<\/strong>
Kesnya Zemsckov<\/strong>, Senior Associate at Amar, Reiter, Jeanne, Shochatovitch & Co., Lawyers<\/strong>
Lina Makhuli, <\/strong>Senior Associate at Barnea Jaffa Lande & Co<\/a><\/strong>
Dr. Myriam Feinberg<\/a>, <\/strong>Associate at Gornitzky & Co<\/a><\/strong><\/p>\n\n\n\n

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With more global companies undertaking business in Israel<\/a> in recent years, infrastructure, construction, and cross-border agreements have noticeably increased. Unfamiliar with the Israeli legal system and the governing law, these companies often bypass Israeli laws and jurisdiction in their agreements, opting for arbitration. However, international arbitration (\u201cIA\u201d) had long remained underdeveloped in Israel, with the Arbitration Law<\/a> enacted in 1968 (\u201cArb. Law\u201d) dealing primarily with local arbitration, without addressing the specific challenges and unique features of international arbitration.<\/p>\n\n\n\n

Against this backdrop, the International Commercial Arbitration Bill, 2023 (\u201cICAB\u201d) proposal has been introduced, aiming to add Israel to the list of 87 countries that have adopted the UNCITRAL Model Law on International Commercial Arbitration (2006)<\/a> (\u201cUNCITRAL Model Law\u201d), substantially changing Israel\u2019s landscape of arbitration. ICAB is slated to be adopted within a few weeks of mid-January 2024.<\/p>\n\n\n\n

In this article, we will review the most significant changes enacted by ICAB and offer a quick review of its influence on urgent relief and their enforcement under Israeli Law.<\/p>\n\n\n\n

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Highlights of the ICAB<\/strong><\/h2>\n\n\n\n

The most important contribution of the ICAB is the distinction between local and international arbitration. While the Arb. Law defines IA awards as given outside of Israel; the ICAB establishes a clear definition of IA, compatible with Article 1(3) of the UNCITRAL Model Law<\/a>. The only difference between the ICAB and the UNCITRAL Model Law is that the ICAB does not recognize the parties\u2019 autonomy to agree to conduct the arbitration as IA even when the dispute does not fully comply with the definition set in the ICAB. The intention is to retain local arbitration proceedings under the Arb. Law. However, the current discussions in Parliament seem to point to this section being re-introduced in a manner that would promote and preserve party autonomy even more than the current form of the UNCITRAL Model Law<\/a>.<\/p>\n\n\n\n

The definition of IA raises questions regarding the scope of proceedings that apply to this term, mostly since it is common for foreign companies acting as main contractors in Israeli infrastructure projects to be incorporated as an Israeli vehicle, whether for tax reasons or due to the state\u2019s requirements in national projects executed via tenders. In such cases, the ICAB will not necessarily apply, and the arbitration will be governed by the Arb. Law.<\/p>\n\n\n\n

Another important change lies within Article 6 of ICAB, which sets limits on the court\u2019s powers to intervene with the arbitral jurisdiction except in matters it expressly allows. The ICAB intends to convey to IA users that the judicial system will act as a supporting authority for arbitral disputes but will refrain from intervening in most issues that may arise as part of IA proceedings. This section expresses the great importance of parties\u2019 autonomy, its supremacy in such matters, and the need for courts to recognize and promote it. This principle also reflects the tendency in Israeli case law to refrain from interfering with arbitral proceedings and awards or to do so only in the rarest circumstances.<\/p>\n\n\n\n

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Urgent Interim Measures \u2013 Current and Future Position<\/strong><\/h2>\n\n\n\n

Perhaps the most significant change compared to the existing Arb. Law lies within Articles 18-26 to ICAB dealing with urgent interim measures, allowing parties to enforce urgent relief more easily.<\/p>\n\n\n\n

The Arb. Law offers two options for a party seeking urgent relief bonded by a cross-border Israel-related IA dispute<\/span>:<\/p>\n\n\n\n