1. For purposes of this law –

“Arbitration agreement” – A written agreement to refer to arbitration a dispute which has arisen between the parties to the agreement or which may arise between them in the future, whether an arbitrator is named in the agreement or not;

“Arbitrator” – An arbitrator appointed by or under an arbitration agreement, including an umpire and a substitute arbitrator;

“Arbitration award” – An award made by an arbitrator, including an interim award;

“Foreign arbitration award” – An arbitration award made outside of Israel;

“Court” – A district Court, except in connection with sections 5 and 6.

Definitions (Amended: 1974)

2. Unless a contrary intention appears therein, an arbitration agreement will be deemed to include the provisions set out in the addendum, as far as they are relevant.

Implied Provisions

3. An arbitration agreement in a matter which cannot be the subject of an agreement between the parties is invalid.

Restriction to the Agreement

4. An arbitration agreement and the authority of an arbitrator thereunder will have effect also in respect of the successors of the parties to the agreement, and the authority of an arbitrator under an agreement is also vested in a substitute arbitrator, all unless a contrary intention appears from the agreement.

Change of Parties and of Arbitrator

5. (a) When an action is brought before Court in a dispute which it had been agreed to refer to arbitration, and if a party who is a party to the arbitration agreement applies for a stay of proceedings in the action, the Court will stay the proceedings between the parties to the agreement, provided that the applicant has been and still is prepared to do everything required for the institution and continuation of the arbitration.

(b) An application for a stay of proceedings may be submitted in the statement of defense or otherwise, but not later than on the day on which the applicant first pleads to the substance of the action.

(c) The Court may refrain from staying proceedings, if it sees a special reason why the dispute should not be dealt with by arbitration.

Stay of Court Proceedings

6. When an action is brought before Court in a dispute which it had been agreed to refer to arbitration, and if an international convention to which Israel is a party applies to the arbitration and that convention lays down provisions for a stay of proceedings, then the Court will exercise its power under section 5 in accordance with and subject to those provisions.

Stay of proceedings under international convention

7. (a) When an agreement between the parties provides that the commencement or termination of arbitration proceedings within a specific period will be a precondition to the realization of a right between them, and if a dispute arises between the parties, then the Court may – if it considers it just – extend the period, even if it already has expired, on such conditions as it may see fit.

(b) When the Court decides, whether under section 5, 6 or 12(b), that a dispute will not be dealt with by arbitration, then any stipulation in the agreement between the parties, which makes the commencement or termination of arbitration a precondition of the realization of a right between them, will be void.

Relief against lapse of rights

8. (a) When a dispute arises in a matter which it has been greed to refer to arbitration, and if an arbitrator has not been appointed under the agreement, the Court may – on application by a party – appoint an arbitrator. The Court may do so whether the arbitrator was to have been appointed by the parties or one of them, or whether he was to have been appointed by the arbitrators appointed by the parties, or by a third party.

(b) The Court will not appoint an arbitrator under subsection (a), unless the applicant has given his opponent written notice as provided hereunder and has met with no response within seven days from the day on which the notice was delivered.

(1)When the arbitration agreement provides that each party

will appoint an arbitrator, the applicant will in the notice name the arbitrator appointed by him and will call on his opponent to appoint an arbitrator;

(2) in every other case, the applicant will, in the notice, propose an arbitrator and will call on his opponent to agree to his appointment;

(c) When an arbitration agreement provides that each party will appoint an arbitrator, the Court may – on the application of a party who has appointed an arbitrator, appoint that arbitrator or another person as sole arbitrator.

Appointment of arbitrator by Court

9. When an additional arbitrator or an umpire has been appointed, whether under the arbitration agreement or by the Court, the Court may – on the application of a party and notwithstanding anything contained in the arbitration agreement – appoint that arbitrator as sole arbitrator, if it sees a special reason for doing so in the interests of instituting or completing the arbitration.

Appointment of sole arbitrator by Court

10. An arbitrator or sole arbitrator appointed by the Court will have the status of an arbitrator appointed by the parties to an arbitration agreement.

Status of arbitrator appointed by Court

11. The Court may remove an arbitrator, if –

(1) it is discovered that he is unworthy of the parties’ confidence; or

(2) his conduct in the course of the arbitration causes a delay of justice; or

(3) he is unable to perform his function.

Removal of arbitrator

12. (a) When the place of an arbitrator has fallen vacant, whether in consequence of his resignation or death or removal, the provisions of sections 8 to 10 will apply to the appointment of a substitute arbitrator, unless a contrary intention appears in the arbitration agreement.

(b) When an arbitrator has been removed, the Court may, if it sees a special reason for doing so and instead of appointing a substitute arbitrator, decide that the dispute which is the subject of the arbitration will not be dealt with by arbitration.

Appointment of substitute arbitrator

13. (a) In an arbitration, an arbitrator will have the same power of summoning witnesses to give evidence or produce documents, as a Court has in an action brought before it, and he may award them remuneration and expenses.

(b) A witness who testifies in an arbitration will have the duties and immunities of a witness who testifies in Court.

(c) When a witness has been summoned by an arbitrator, the Court may, on application by the witness, cancel the summons if it finds that an abuse of arbitration proceedings is involved.

Summoning witnesses

14. The evidence of a witness, including the evidence of a party, will be taken on oath or affirmation, unless the arbitrator and the parties have agreed that it will be taken without oath or affirmation, but that a witness will not be required to testify on oath where the Court would not have required him to do so.

Ways of taking evidence

15. (a) When a party has been duly summoned to a session and has not appeared, the arbitrator may, at that session, hear the dispute in his absence. When a party has been called upon to state his case at a prescribed time and has not done so, the arbitrator may determine the dispute in his absence.

(b) When an arbitration award was made after a hearing at which a party was absent or did not state his case, the arbitrator may, at the request of a party made to him within 30 days from the day on which a copy of the arbitration award was delivered to that party, set aside the arbitration award and reopen the hearing, if he is satisfied that the party was absent or did not state his case for justifiable cause.

Hearing in the absence of a party

16. (a) In the following matters the Court has, in respect of

arbitration, the same powers to grant relief, as it has in respect of an action brought before it:

(1) the summoning of witnesses and the determination of

their remuneration and expenses;

(2) the adoption of coercive and punitive measures against a witness who has not answered an arbitrator’s or the Court’s summons, or who has refused to testify;

(3) the taking of evidence forthwith or out of the

jurisdiction;

(4) substituted service of notices or documents on the

litigants;

(5) the attachment of property, the prevention of departure

from Israel, security for the production of property , the appointment of a receiver, a mandatory injunction and a prohibitive injunction.

(b) An application for relief under this section may be filed by a party or by the arbitrator. If an arbitrator has not yet been appointed, a party may file the application after giving the other litigant notice as provided in Section 8(b).

(c) For purposes of Subsection (a), the appointment of an arbitrator or giving notice as aforesaid will have the effect of bringing an action in Court.

(d) The provisions of this section will not derogate from the powers of the arbitrator under the arbitration agreement or under this law.

Auxiliary Powers of Court

17. (a) Relief granted under Section 16(a)(5) will be effective, unless canceled by the Court, until the arbitration award is awarded, and the arbitrator may, by the arbitration award, make all or part of it final.

(b) A decision of the arbitrator under Subsection (a) will, except as regards appeal, have the effect of a decision by the Court.

Extension of Period of Temporary Relief

18. The filing of an application to Court in connection with an arbitration, whether by a party of by the arbitrator, will not stay the arbitration proceedings, unless the Court or the arbitrator so directs.

Application to Court does not Stay Proceedings

19. (a) When an arbitration agreement or this law prescribes a period for awarding the arbitration award or for some other act of the arbitrator, the Court may, on application by a party or by the arbitrator, extend the period from time to time to such a period as it will prescribe, even if the preceding period already has expired.

(b) In calculating a period said in subsection (a), the time for which the arbitration proceedings are stayed under section 18 or 33 will not be taken into account.

Extension of Periods for Acts of Arbitrator

20. The arbitration award will be in writing and will be signed by the arbitrator, indicating the date of the signature. In the case of an arbitration before several arbitrators, the signatures of a majority of them will be sufficient, if the award indicates that the other arbitrators are unable or unwilling to sign it.

Form of Arbitration Award

21. Subject to Sections 24 to 28 and unless a contrary intention appears from the arbitration agreement, the arbitration award binds the parties and their successors as res judicata.

Legal effect of Arbitration Award

22. (a) The arbitrator may, on the application of a party and after the other parties have been given a suitable opportunity to state their cases, rectify or complete the arbitration award if it is defective in one of the following ways:

(1) It contains a clerical error, a slip of pen, an omission, an error in the description of any person or property or in any date, number, calculation or the like;

(2) It is defective on a matter not relevant to the substance of the dispute;

(3) It contains no provision on the payment of interest;

(4) It contains no provision on the expenses of the parties,

including advocates’ fees.

(b) The arbitrator will not entertain an application made to him under subsection (a)(3) or (4), if the award was made in the presence of the applicant, after 30 days have elapsed from the day on which the award was made, and, if the award was made in the absence of the applicant, after 30 days have elapsed from the day on which a copy of the award was delivered to the applicant.

(c) The arbitrator will decide upon an application under this section within 30 days from the day on which notice thereof is given to the other parties.

(d) The Court may rectify defects referred to in subsection (a)(1) or (2) in the course of the hearing of an application to confirm or set aside the award, even when no application has been made to the arbitrator, or when an application has been made to him, but he has not decided upon it.

Rectification of Arbitration Award

23. (a) The Court may, on the application of a party, confirm an arbitration award. When the award has been confirmed, it will, in all regards except as regards appeal, be treated as a judgment of the Court.

(b) The Court will not entertain opposition to the confirmation of an arbitration award, save by way of an application to set it aside.

Confirmation of Arbitration Award

24. The Court may, on the application of a party (hereafter in this law: “application to set aside”) set aside an arbitration award, in whole or in part, or supplement or amend it, or remit it to the arbitrator, for one of the following reasons:

(1) The arbitration agreement was not valid;

(2) The award was made by an arbitrator not properly appointed;

(3) The arbitrator acted without authority or exceeded the

authority vested in him by the arbitration agreement;

(4) A party was not given a suitable opportunity to state his case or to produce his evidence;

(5) The arbitrator did not determine one of the matters referred to him for determination;

(6) The arbitrator did not assign reasons for the award, although the arbitration agreement required him to do so;

(7) The arbitrator did not make the award in accordance with law, although the arbitration agreement required him to do so;

(8) The award was made after the period for making it had

expired;

(9) The contents of the award are contrary to public policy;

(10) A ground exists on which a Court would have set aside a final, nonappealable judgment.

Setting Aside Arbitration Award

25. If the Court decides to remit the award to the arbitrator, the arbitrator will make his award within a period of three months from the date of the decision, unless the Court directs otherwise.

Remittal of Award to Arbitrator

26. (a) The Court may dismiss an application to side aside, notwithstanding the existence of one of the grounds set out in section 24, if it is of the opinion that no miscarriage of justice has been caused.

(b) The Court will not set aside all of the award, if it can be set aside in part, supplemented, amended or remitted to the arbitrator.

(c) The plea of a party that the award was made out of time will not be heard, unless he reserved, by written notice to the arbitrator before the award was made, the right to make that plea.

Restrictions on Setting Award Aside

27. (a) The Court will not entertain an application to set aside, which is filed, if the award was made in the applicant’s presence, after 45 days elapsed from the day on which it was made, and if the award was made in the applicant’s absence , after 45 days elapsed from the day on which a copy of the award was delivered to the applicant by the arbitrator or by a party. The Court may extend the period, even if it already has expired, for special reasons which will be recorded, and in every case in which an application has been filed for the confirmation of a foreign arbitration award.

(b) When an application has been made to the arbitrator under section 22, the period of 45 days will begin on the day on which the arbitrator decides or ought to decide upon the application. In the case of an application to set aside, on the grounds specified in section 24(10), the said period will begin on the day on which the facts on which the application is based were discovered.

(c) The Court will not entertain an application to set aside filed after the award has been confirmed.

(d) The times set out in subsection (a) will not apply to an application to set aside, on the grounds specified in section 24(1), and the provisions of subsection (c) will not apply to an application to set aside on the grounds specified in section 24(10).

Time for Application to Set Aside (Changed 1974)

28. When an application to set aside has been filed and is dismissed, the Court will confirm the award even if no application for its confirmation has been filed. When the Court dismisses the application to set aside in part, or supplements or amends the award in consequence of hearing the application, it will confirm the award in so far as it has not been set aside, or as supplemented or amended.

Application to Set Aside and Confirmation of Award

29. (a) When an application to confirm an award or to set it aside has been made, the Court may order the attachment of the party against whom the award was made, the prevention of his departure from Israel or the provision of security for the award’s implementation. The application may be made orally and the Court may exempt the applicant from giving security.

(b) The provisions of every enactment on provisional attachment, prevention of departure from Israel or the provision of security will apply, mutatis mutandis, to relief under this section.

Attachment Order, etc.

29A. An application for the confirmation or setting aside of a foreign arbitration award to which applies an international convention to which Israel is a party and which lays down provisions on the matter in question will be filed and dealt with in accordance with and subject to those provisions.

Foreign Arbitration Award

(Added 1974)

30. An arbitrator who agreed to serve as an arbitrator must act with loyally towards the parties. If the arbitrator betrays the confidence placed in him, the injured party will, in addition to any remedy under this law, be entitled to compensation payable for breach of contract.

Obligation of Arbitrator

31. (a) Unless a contrary intention appears from the arbitration agreement, the parties will pay the arbitrator his remuneration and expenses (hereinafter: “remuneration”) in such amounts and at such times as the arbitrator has fixed.

(b) A party may pay the arbitrator, on account of his remuneration, any amount with which another party is in arrears, and upon doing so, he will at any time be entitled to resort to the other party and be reimbursed by him for what he has paid.

Remuneration of Arbitrator

32. (a) Unless a contrary intention appears from an arbitration agreement, the Court may, on the application of a party, reduce any remuneration fixed by the arbitrator otherwise than with the parties’ sanction, if it considers the remuneration excessive, and it may accordingly order the return of amounts paid to the arbitrator on account of the remuneration.

(b) The Court will not entertain an application to reduce a remuneration, filed before the award has been made or after the period said in section 27(a).

Reduction of Arbitrator’s Remuneration

33. (a) When an arbitrator has not been paid all or part of his remuneration in time, he may delay the progress of the hearings or the decision on or the delivery of the award until the outstanding amount has been paid.

(b) When the arbitrator has done as specified in Subsection (a) in respect of remuneration which a party contends is excessive, the Court may, on a party’s application, direct the arbitrator to continue the hearings or to make or to deliver the award, as the case may be, on condition that all or part of the remuneration is deposited with the Court or that the applicant has given security for its payment.

Right to Delay

34. When an arbitrator has been removed, the Court may, on a party’s application, determine whether or not he is entitled to all or part of the remuneration, and it may accordingly order the return of amounts paid to the arbitrator on account of his remuneration.

Remuneration of Arbitrator Who has been Removed

35. In relation to an application filed by one of the litigants under section 32, 33 (b) or 34, the arbitrator will be the respondent and the other parties will be given a suitable opportunity to state their cases.

Status of Arbitrator and Litigants

36. For the purposes of this Law, the State will have the same status as any other person, provided that the Civil Procedure Amendments (The State as Party Law) 1958 will apply to an arbitration to which the State is a party.

Status of the State

37. The powers vested in the Court by this law are also vested in the Registrar of the Court in the following matters:

(1) Powers which he would have been competent to exercise, if the claim under arbitration were an action brought in Court;

(2) The appointment of an arbitrator;

(3) The extension of times under this law;

(4) The confirmation of an arbitration award, and the making of an order under section 29, when there is no application to set aside the award.

Powers of Registrar

38. A decision of the Court under this law is appealable by leave, under section 19(b) of the Courts Law 1957. A decision of the Registrar under this law is appealable under section 8(b) and (d) of the Registrars Ordinance 1936.

Appeal

39. The provisions of this law will not prevent bringing an action in Court on the strength of rights and obligations set by an award under this law or by a determination made on the basis of an oral agreement.

Saving of Rights and Obligations

39A. The provisions of this law will not prevent a stay of Court proceedings, the confirmation or setting aside of an arbitration award or any other proceeding under this law, when the arbitration is governed by foreign law, or when the arbitration award is a foreign arbitration award, and no convention referred to in section 6 or 29A applies to that arbitration or award, or the convention which applies to lit does not lay down provisions for the matter in question.

Saving of Laws (Added: 1974)

40. The Arbitration Ordinance is hereby repealed.

Repeal

41. This law will come into effect on January 1, 1969, provided that an arbitration begun before this law came into effect, whether by notice from one party to the other calling him to appoint or consent to the appointment of an arbitrator or by notice to the arbitrator calling upon him to begin hearing the dispute, will continue to be governed by the previous law.

Commencement and Transitional Provisions

42. The Minister of Justice is charged with the implementation of this law and he may make procedural regulations to the extent required for the implementation of a convention referred to in section 6 or 29A.

Implementation and Regulations (Added 1974)