Enforcing a Foreign Arbitral Award in Israel: What the Court Checks

If your contract sent disputes to arbitration abroad and you won, the award is only paper until it can be enforced against the assets of an Israeli company. For most foreign creditors, those assets are in Israel. This guide explains what the Israeli court asks of you and how little room the other side has to resist.

It is general information and not advice on a specific award.

The route: the New York Convention

Section 29A of the Arbitration Law, 1968 says that an application to confirm or set aside a foreign award covered by an international convention that Israel has joined is handled under that convention. The main one is the New York Convention of 1958. It requires recognition and enforcement of foreign arbitral awards, subject to a short closed list of grounds for refusal. Its purpose is to support international trade and to limit court interference.

What you file

You apply to the Israeli court and attach the original award, or a certified copy, and the original arbitration agreement, or a certified copy. You do not first have to have the award confirmed by a court in the country where it was made. The Israeli Supreme Court has rejected that “double exequatur” requirement.

Confirming the award is the rule in Israel. Refusing it is the narrow exception.

The only grounds for refusal

Article V of the Convention gives the party resisting enforcement five grounds, and that party must prove one of them:

• the arbitration agreement was invalid under the law that governs it, or a party lacked capacity;
• the party did not get proper notice of the arbitrator or the proceedings, or could not present its case;
• the award deals with a dispute outside the arbitration agreement;
• the tribunal or the procedure did not match the agreement or the law of the place of arbitration;
• the award is not yet binding, or was set aside or suspended by a competent authority where it was made.

The court may also refuse on its own initiative if the subject matter cannot be settled by arbitration under Israeli law, or if enforcing the award would offend Israeli public policy. The Israeli courts read these grounds narrowly. The public policy ground is reserved for rare breaches of basic values of morality, justice and fairness, and it looks at the content of the award, not at its result.

What to do before you apply

Check that the award and the arbitration agreement are both in hand and certified. Read the agreement for the seat and the rules, because the grounds above turn on them. Then look at where the debtor’s assets are; our guide on checking an Israeli company is the place to start. Once the court confirms the award, collection runs through the enforcement office. See also confirming and enforcing arbitration awards and what happens when you sue in the wrong forum.

Holding a foreign award against an Israeli company? Contact RNC Group and we will review the award and the agreement before you file.

---

This article provides general information only and does not constitute legal advice. It does not create an attorney-client relationship, and readers should obtain legal advice suited to the facts, jurisdictions, and procedural posture of their specific matter.