The Supreme Court addressed the issue of what is the proper method for enforcing foreign arbitral awards which have been certified by a competent court in the seat of the arbitration, i.e., whether by seeking recognition and enforcement of the award or by seeking recognition and enforcement of the foreign judgment certifying the award. It clarified that the proper process is provided under section 29a of the Israeli Arbitration Law, 5728-1968 and in the New York Convention; it is only in rare and exceptional cases that the recognition and enforcement of a foreign award may be pursued by seeking enforcement of the foreign judgment certifying it, through the procedure set out in the Enforcement of Foreign Judgments Law, 5718-1958.

The Supreme Court also explained the phrase “becomes binding” in Article V(1)(e) of the New York Convention means that it is no longer possible to file an appeal from the award in the arbitration proceeding, as distinct from an appeal before a court. The Court further confirmed that (i) once the arbitral award is set aside at the seat of the arbitration, it should not be recognized and enforced under the New York Convention, except in exceptional cases (for example, the decision to set it aside was made by a judicial forum that is not autonomous and independent); and (ii) certification of the arbitral award in the seat of the arbitration does not automatically lead to recognition and enforcement by virtue of the New York Convention. However, rejection of claims pertaining to the validity of the arbitral award in a motion to certify or set it aside could give rise to cause of action estoppel that bars identical claims from being raised in the opposition to enforcement and certification of the arbitral award in Israel.