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Arbitration in Israel
The Arbitration Law 1968
Recongnition and Enforcement of Foregin Arbitral Award
The Arbitration Agreement
The Arbiration Clause
A Consensual Appeal
Stay of Court Proceedings
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Interim Measures
The Arbitral Award
Setting Aside the Award
The New York Convention Regulations
Institutional Arbitration v. ad hoc
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Home page Arbitration & A.D.R Recongnition and Enforcement of Foregin Arbitral Award

Recongnition and Enforcement of Foregin Arbitral Award

Date 13/8/2014

 

Israel ratified in  full  and unconditionally the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention”) on June 10th 1958,  which  came into force in Israel on June 7th 1959. The Regulations for Execution of the New York Convention ("New York Regulations”) were published on August 6th 1978 and came into force on September 5th of that year. The Israeli Courts have been robustly enforcing the New York Convention ever since.1
While the Israeli Arbitration Law does not include a definition of "International Arbitration", it refers to it implicitly in Articles 6 and 29a. Article 6 governs the issue of a stay of proceedings ordered by the court when an International Convention governs the dispute, and Article 29a governs the recognition and enforcement of Foreign Arbitration Awards. In practice, both of these matters are also governed by the New York Convention, as further discussed below.

The First Amendment of the Arbitration Law added Article 29A as follows:
"Foreign Arbitral Award
29A.  A request for the approval or setting aside of a foreign arbitral award to which an international convention that israel is a party to applies, and the convention provides directions regarding the relevant matter, shall be filed and decided in accordance with and subject to those directions.

According to Article 1 of the Arbitration Law, a foreign arbitral award is: "an arbitral award rendered outside of the State of Israel".
The Highly esteemed Justice Hila Gerstel discussed the significance and operation of the New York Convention at length in her decision in the Starcom case2 :

"The New York Convention is of great importance to the international economy, since it gives foreign arbitration decisions a relative advantage in the form of the ability to approve and enforce a foreign arbitral award given in a foreign country. While enforcement or recognition of a decision of a foreign court usually depends on the principle of reciprocity (i.e. the country where the foreign award was rendered can approve and enforce the award), the approval of a foreign arbitral award in Israel according to the New York Convention is not subject to such a requirement, and the only requirement is that the award be given outside of Israel. The wide contribution of the New York Convention lies primarily in encouraging international trade, since the knowledge of the parties that they can easily enforce an arbitral award in a foreign country reduces the risk involved in international transactions [Various Civil Motions (Haifa) 17013/04 BIP Chemicals Ltd Vs. Gad Chemicals Ltd (not published, given on November 22, 2005): Bernstein & D. Wood, Handbook of Arbitration Practice, (London 1993) 441-442; SmadarOttolenghi Arbitration – Law and Procedure (Fourth Edition, 5765) 938 and also Various Civil Motions (Tel Aviv) 20981/07 Harel Insurance Company Ltd Vs. Equitas Limited (not published, given on December 3, 2008)."

 
Artical 3 Regulates the procedre for Recognition and Enforcement of Arbiral Awardas
 

3(a). A litigant who requests from the Court to approve a foreign arbitral award shall attach to its request:

(1)     The original arbitral award, legally validated in accordance with Israeli Law, or a certified copy of it;

(2)     The original arbitration agreement or a certified copy of it, in accordance with Israeli law."

3(b) A document, as stated in secondary regulation (a) not written in Hebrew, Arabic, English or French, shall be accompanied by a translation into one of the aforementioned languages; this translation shall be certified by a person legally entitled to verify translations in accordance with Israeli law, or by a consular or diplomatic representative of the State in whose language the document is written."

 

This Article should be read in tandem with Article 5 of the Arbitration regulations which provides:

The Procedural Regulations in Matters of Arbitration, 1968, shall apply to stay of proceedings and to the approval of arbitral awards in accordance with the New York Convention, as long as these Regulations do not provide otherwise and subject to the required changes.

 

Courts in Israel respect the NY Convention which Israel joined in June 1959 with no reservations. Since then, Courts have recognized and enforced foreign arbitral awards with no restrictions usually but rulled exeptions when public welfare considartion take place. Filing a request which resists the foreign arbitral awards should keep the right time table for this, basing it on the N.Y Convention causes and on domestic setting aside reasons.

 

 
 1Pursuant to Articles 5, 6 and 29A of the Israeli Arbitration Law, 1968.
 2Y. Matan Communication and Localisation Systems Ltd. & Co. vs. Starcom Systems Ltd. Case no. 3565-06-08 [Published on Nevo website].




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