We won an arbitration in London against an Israeli supplier. How do we actually get paid in Israel?

An award from a London seat is not self-executing in Tel Aviv, but it is close. Israel does not re-open the merits. The Israeli court asks a short list of convention questions, and if the answers hold, the award becomes an Israeli judgment you can enforce against bank accounts, receivables and property.

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Detailed Answer

Two instruments do the work. Section 29A of the Arbitration Law 5728-1968 provides that an application to confirm or to set aside a foreign arbitral award governed by an international convention to which Israel is a party is filed and decided under that convention, and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards has been in force for Israel since 7 June 1959. The Regulations for Implementation of the New York Convention (Foreign Arbitration) 5738-1978 fill in the mechanics: the applicant produces the original award authenticated in accordance with Israeli law or a certified copy of it, together with the arbitration agreement, and where the documents are not in Hebrew, Arabic, English or French they must be translated into one of those languages. Confirmation under Section 23 gives the award the standing of a final judgment. Resistance is narrow. The respondent must land one of the Article V grounds, which mirror the ten grounds in Section 24 of the Arbitration Law, and none of them lets an Israeli judge disagree with the tribunal about the contract. Note also that the Enforcement of Foreign Judgments Law 5718-1958 is the wrong statute here, and applications filed under it get sent back.

Distance helps you rather than hurting you in this particular procedure. Nobody from the English company needs to travel: an Israeli lawyer files under a power of attorney signed before a notary in England and apostilled by the Foreign, Commonwealth and Development Office, and the hearing, if one is even held, is short. The bigger tactical point is cost. A confirmation application is a motion, not a fresh money claim, so it escapes the ad valorem court fee of 2.5% of the sum claimed that a new Israeli action on the same debt would attract, and on a GBP 1,000,000 dispute that gap is worth roughly NIS 110,000 in fees alone. Timing is where English claimants slip. Section 27 gives the Israeli respondent 45 days from delivery of the award to apply to set it aside, and the court may extend that period for special reasons, which it treats more generously for foreign awards, so an Israeli debtor who has quietly moved money can buy months. File early and consider an attachment application at the same time. Our answer on securing payment from an Israeli buyer as a foreign supplier deals with the contract terms that make this stage easier.

In Practice: Section 29A of the Arbitration Law 5728-1968 sends a New York Convention award to the Israeli court under the convention, and Section 23 gives a confirmed award the force of a judgment enforceable through the Execution Office (Hotzaa LaPoal). Section 27 sets a 45-day window from delivery of the award for a set-aside application, extendable for special reasons. Because the application is a motion rather than a money claim, it avoids the 2.5% ad valorem court fee, a saving of roughly NIS 110,000 on a GBP 1,000,000 award. Expect 4 to 10 months from filing to a confirmation decision where the debtor contests, and a few weeks where it does not.

When to Consult a Lawyer

• The Israeli debtor is moving assets or has stopped filing with the Companies Registrar, in which case a temporary attachment should go in alongside the confirmation application rather than after it
• The arbitration clause was in standard terms, in a purchase order, or in an exchange of emails, which is exactly where an Article V(1)(a) attack on the validity of the agreement gets traction
• The award includes interest, costs or a currency conversion the Israeli court will need to translate into a shekel figure the Execution Office can act on

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Speak With an Israeli Attorney

An Israeli lawyer files the confirmation application under the correct statute, secures the debtor's assets while it is pending, and takes the confirmed award into execution.

Contact us for a confidential initial consultation.