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ISRAEL 2025-1
Magistrate Court, Netanya, 17 May 2024, Case No. CC 47713-01-24
(Shtang Construction & Engineering Ltd v. Axis (a foreign company)
ISRAEL 2025-1
The Magistrate Court stayed the proceedings commenced by the present respondent in favor of arbitration. The stay motion met all the conditions under Israeli law, including the applicant’s willingness to resort to arbitration. The applicant had invoked the arbitration agreement in the parties’ contract at the first opportunity, namely after receiving the statement of claim in the court action. The notices sent by the respondent requesting payment and threatening legal were not an occasion to invoke the arbitration agreement.
The court discusses the meaning and effect of the referral of the resolution of disputes to arbitration, including: who can ask for referral and when, whether a party has waived its right to request arbitration, the defense that there was no contract at all; whether there was a condition precedent to the commencement of arbitration (e.g. mediation), stay of proceedings v. compelling arbitration, and national procedural specificities such as remand and removal (US), effect of class action. etc.
The court discusses how to interpret the Convention’s requirement that the agreement is not null and void etc., as well as specific cases of invalidity: e.g., lack of consent (misrepresentation, duress, or fraud), vague wording of the arbitral clause; other terms of the contract contradict the intention to arbitrate, etc.