setty-lawfirm




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
Justice and Effiecnent Ruleling
Interim Measures
The Arbitral Award
Setting Aside the Award
The New York Convention Regulations
Institutional Arbitration v. ad hoc
International Arbitration & Mediation




Home page Arbitration & A.D.R A Consensual Appeal ...

A Consensual Appeal

Date 13/4/2015

The Second Amendment in 2008 codified the law regarding appeals on domestic arbitral awards by introducing two separate possibilities of appeal:

a) An appeal before an arbitrator Pursuant to article 21A; and

b) An appeal by leave of the Court Pursuant to Article 29B.

 

Parties who wish to exercise and benefit from the appeal options have to specify their choice of appeal explicitly in the arbitration agreement. If they have done so, the relevant provision applies.

Appeal before an Arbitrator

As a rule, when parties agreed on appeal before arbitrator, the arbitral award is approved and enforceable, unless one of the parties executes their option of appeal according to the agreed timetable between the parties.

Article 21(A) of the Arbitration Law states as follows:

"21A. (a) Where the parties to an arbitration agreement have agreed that the arbitral award may be appealed before an arbitrator -

(1)            The arbitrator shall state the reasons upon which the arbitral award is based;

(2)            The provisions of the Second Addendum shall apply in addition to the provisions of the First Addendum, so long as they do not contradict the provisions of the Second Addendum, and unless the parties have agreed otherwise.

(b) The provisions of this law that apply to an arbitrator, to an arbitration proceeding,  and to an arbitral award, shall apply to the appellate process before an arbitrator and the appellate arbitral award, subject to required adjustments, so long as the arbitral award for the purpose of the definition of "arbitral award" shall be the appellate arbitral award, or the arbitral award of the first arbitrator if no appeal was filed or where the time limit for its filing has passed.

(c) Where the parties have agreed as stated in subsection (a)

(1) It shall be possible to file a request to set aside the arbitral award  on the grounds specified in Sections 24(9) and (10) only;

(2 )It shall not be possible to file a request before the court for leave to appeal an arbitral award."

 

The Second Addendum provides the procedure for an arbitration process which includes an appeal process before an arbitrator:

 

Second Amendment

Article 21A

 

a.         The arbitration sessions shall be evidenced in a protocol or in any other way agreed by the parties; The protocol shall reflect the conduct of the sessions and the statements made by the parties.

b.         The appeal shall be submitted within 30 days from the day on which the arbitral award was notified to the parties or from the day on which the appellate arbitrator was appointed, whichever is later, and shall be reasoned; The other parties may submit a reasoned answer to the appeal within 30 days from the day on which they were notified of the appeal; The appellant may submit a reply to the answer within 15 days from the day on which it was notified to it.

c.         Where an appeal is submitted, the other parties may submit a counter-appeal within 30 days from the day on which they were notified of the appeal; The other parties may submit a reasoned answer to the counter-appeal within 15 days from the day on which they were notified of the counter-appeal.

d.         The appellate arbitrator may conduct sessions in the presence of the parties, hear arguments and request written briefs, however, they are not allowed to hear witnesses; The decision in the appeal shall be based on the material that was before to the first arbitrator and on the pleadings and written briefs submitted in the appeal.

e.         The appellate arbitrator shall render the arbitral award within two months from the end of the appeal process.

f.          The appellate arbitrator shall state the reasons upon which the arbitral award is based.

 

The Second Addendum provides that after the appeal allegations have been finished, the arbitrator must render a decision within two months, unless the parties agreed otherwise. This decision will be deemed to be an arbitral award, and setting it aside would only be possible in  case  the arbitral award conflicts with the Public Welfare (Article 24(9)) or where the court would have cancelled a final judicial decision that cannot be appealed(Article  24(10).

 

Appeal with Leave of the Court

This type of appeal is known as the "judicial appeal".

Article 29B of the Arbitration Law states:

Appeal on an arbitral award with live of the Court

 

"(a) Parties to an arbitration agreement who have stipulated that the arbitrator must decide in accordance with the law, are allowed to agree that the arbitral award may be appealed with leave of the Court if a fundamental mistake has occurred in the implementation of the law which could cause injustice. Such an appeal shall be decided by one judge and shall be subject to the provisions applicable to an appeal before the Court.

(b) Where parties to an arbitration agreement agree that the arbitral award may be appealed before the Court as stated in subsection (a), the arbitration sessions shall be documented in a protocol and the arbitrator shall state the reasons upon which the arbitral award is based.

(c) Where an appeal of the arbitral award was filed to the Court, a request to set aside the arbitral award shall not be required, and the parties shall be allowed to raise during the appeal their claims regarding the setting aside of the arbitral award on the basis of the grounds specified in Article 24 of the Law."

In order to benefit the "Judicial Appeal" right, the following conditions have to be met:

1. The arbitration agreement requires the arbitrator to decide in accordance with substantive law;

2. The parties have agreed in the arbitration agreement that the arbitral award may be subject to an appeal if it contains a fundamental mistake in the application of the substantive law, which may result in an abuse of justice; and

3. The arbitration agreement stipulates that the appeal will be subject to the leave of the Court.

In practice, in order to simplify matters, parties may state in their agreements that the arbitration is subject to Article 29(b) of the Arbitration Law. 

When Judicial Appeal process applies, the parties may base their claims to set aside or to amend the arbitral award on any causes elaborated in Article 24 of the Arbitration Law.  As stated in Article 29B, the appeal will be heard by one judge and will be subject to the Court's appeal procedures.

Practically there is no reason why a foreign party to commercial agreement would include such a procedure. It conflicts the international arbitration concept which is avoiding courts' intervention on the merits.

Comparing these two appeal tracks, it seems that the "private appeal” has preference when it comes to the interests of the business community, for two main reasons: First, permission of the appellate instance is not required. Thus, a fundamental mistake in the application of the substantive law, which may result in an abuse of justice is not requires in order to set up an appeal procedure. Second, it still takes place privately with no open Court intervention.

 





Back to top Print vresion Sent to friend Add comment  Get Rss feed

Set as Home page    |    Home Page    |    News    |    Links    |    Site map    |    Contact us    |    Faq    |    Articles    |    Login


2010 © All rights Ronnen setty

Built By Guy