Arbitration Agreement
The following is the arbitration agreement (legally binding contractual agreement). When noted in a contract, agreement, terms, conditions, or any other form (herein: "Primary Agreement") that refers to this document for conducting arbitration, handling a dispute, jurisdiction, or any other matter, this document's provisions constitute the agreed-upon terms, conditions, powers, authority, procedures, acts, awards, and other aspects governing any arbitration conducted hereunder (herein: "Arbitration Agreement").
Definition - Arbitration Law: Hebrew: חוק הבוררות, תשכ״ח-1968 English: Arbitration Law, 1968.
Definition - External Court / Judge: (Court of law; Hebrew: בית משפט) - The legal judicial authority, per law, that has authority and jurisdiction to render acts.
Governing Law: Regardless of a party's citizenship, residence, venue, place of business, or location of property, the laws of Israel shall exclusively apply to this Arbitration Agreement and to the substance of any dispute, unless mandatorily overridden by international law applicable to the specific circumstances as determined by the Arbitrator. All references to "judgment/ruling" herein shall refer to the judgments and rulings under Israeli law.
Arbitrator's Authority for Remedies: The Arbitrator shall have the authority to grant any remedy that an Israeli External Court is authorized to grant in a civil matter, including interim relief and final awards, subject to the provisions and limitations of the Arbitration Law, 1968. The enforcement of any interim relief against a non-compliant party shall be subject to confirmation by the competent External Court as provided by law (herein: "Act").
Nature and Interpretation of Arbitrator's Acts: The Arbitrator's Acts may be temporary or permanent and may be issued at any time by the Arbitrator for any reason deemed fit or necessary. Any content herein in Hebrew prevails over the English content in case of conflict or misunderstanding. Any dispute regarding the interpretation of this Arbitration Agreement shall be brought to the Arbitrator as the sole authority to decide on its meaning, scope, and any other matter pertaining to it.
Appointment of Sole/Head Arbitrator: Unless defined otherwise in the Primary Agreement, Mr. Erez Kalman will be the single (sole) Arbitrator and will also be the Head Arbitrator. If the Primary Agreement requires or defines more than one arbitrator, Mr. Erez Kalman will be the Head Arbitrator (herein: "Head Arbitrator"; a sole arbitrator is also the Head Arbitrator).
Additional Arbitrators Stipulated in Primary Agreement: If the Primary Agreement stipulates the identity (natural person or from an organization) of one or more arbitrators, they will serve in addition to the Head Arbitrator.
Conflict of Interest, Disclosure, and Challenge Procedure: a. Upon appointment, and throughout the proceedings, each arbitrator shall submit to the parties a written disclosure of any circumstances likely to give rise to justifiable doubts as to their impartiality or independence. b. A party shall submit any objection or challenge to an arbitrator based on an alleged conflict of interest ("Challenge") within 7 calendar days of receiving the arbitrator's disclosure, or within 7 calendar days from the date the party became aware of the circumstances giving rise to the Challenge, whichever is later. c. Failure to submit a Challenge within the specified period shall be deemed a final and irrevocable waiver of the right to object to any matter disclosed or reasonably known, and the party shall be estopped from raising such a Challenge at any later stage of the proceedings or before any External Court. d. A Challenge against an arbitrator (other than the Head Arbitrator or a Sole Arbitrator) shall be decided by the Head Arbitrator. e. Notwithstanding the above, should a Challenge be raised against the Head Arbitrator (or a Sole Arbitrator) and the Head Arbitrator issues a decision denying the Challenge, the following procedure shall apply: (i) The arbitration proceedings shall be immediately stayed. (ii) The challenging party shall have 14 calendar days from the date of the Head Arbitrator's decision to file an application with the competent External Court in Petah Tikva (Israel) to resolve the matter of the Challenge. (iii) Should the challenging party fail to file and provide proof of filing said application with the External Court within the specified 14 calendar day period, the Challenge shall be deemed irrevocably withdrawn, the stay on the arbitration shall be lifted, and the proceedings shall resume. (iv) Should an application be duly filed with the External Court, the stay shall remain in effect pending the final and non-appealable decision of the External Court on the matter.
Party-Appointed Arbitrators (זבל"א): The Head Arbitrator (or the Sole Arbitrator, if applicable) may, at their discretion or upon agreement of the parties, allow each party to appoint an arbitrator (Hebrew: זבל״א). Such party-appointed arbitrators will serve in addition to the Head Arbitrator, who will continue to preside over the Arbitral Tribunal so constituted.
Exclusion of Arbitration Law (First Addition): The arbitration is not subject to the following articles in the First Addition (Hebrew: תוספת ראשונה) to the Arbitration Law, 1968, pursuant to Article 2 of the Law: Sections ב, ג, ו, י, יג, טו, טו1, יט (corresponding to English sections 2,3,6,10,13,15,15a,19).
Exclusion of Arbitration Law (Second Addition): The arbitration is not subject to the following articles in the Second Addition (Hebrew: תוספת שניה) to the Arbitration Law, 1968, pursuant to Article 21A of the Law: Sections א, ב, ו (corresponding to English sections 1,2,6).
Exclusion of Specific Arbitration Law Articles: The arbitration is not subject to the following articles in the Arbitration Law, 1968: Sections 21A(a), 32a, 32b (Hebrew: סעיפים 21א(א), 32א, 32ב).
Duration of Arbitration: Unless defined otherwise in the Primary Agreement, the arbitration is not restricted to an end date.
Scope of Arbitration: Unless defined otherwise in the Primary Agreement, the arbitration is not restricted to specific topics. The Arbitrator has power over any dispute, disagreement, or any other matter brought before the Arbitrator by a party by virtue of this Arbitration Agreement.
Substantive Law, Evidence, and Procedure: The Arbitrator MAY decide the dispute in accordance with the substantive law of Israel (Hebrew: דין מהותי) but is NOT required to do so unless otherwise required to in the Primary Agreement. The Arbitrator shall not be bound by the rules of evidence (Hebrew: דיני ראיות) or court procedure (Hebrew: סדרי דין) and may conduct the proceedings in a manner they deem most efficient and just to resolve the dispute.
Procedural Decisions by Head Arbitrator: The Head Arbitrator will decide the location, schedule, and manner for the arbitration proceedings and all related matters concerning the parties.
Language of Arbitration: The Head Arbitrator will decide the language(s) to be used for discussions, documents, and other arbitration-related proceedings.
Arbitrator's Fees and Expenses: The Arbitrator's fees and expenses shall be determined as follows: a. The Arbitrator's fee shall be determined in accordance with the provisions of the Israel Bar Association's Rules (Recommended Minimum Tariff), 2000, specifically the rates stipulated in the chapter pertaining to Arbitration (Chapter D), as may be updated from time to time and no less than 200 USD an hour (or any part of an hour). b. In the absence of a specific provision in the aforementioned tariff for a particular action, the fee shall be determined based on the tariff applicable to corresponding actions before an External Court, with necessary adjustments as determined by the Arbitrator. c. In addition to the fee, the parties shall bear all reasonable expenses incurred by the Arbitrator for the purpose of the arbitration, including, but not limited to, travel costs, costs of external experts, and rental of hearing rooms. d. The Arbitrator is authorized to demand deposits from the parties, on account of the fees and expenses, at any stage of the arbitration. e. The final allocation of the fees and expenses between the parties shall be determined by the Arbitrator in the final award, at their discretion.
Prompt Conclusion: The Arbitrator will aim, but is not required, to conclude matters brought before them promptly, with the aim of conclusion within three months from the date no additional requests or submissions are issued to or by the Arbitrator, unless the Arbitrator deems a different timeframe appropriate.
Effect of Arbitrator's Acts and Awards: The Arbitrator's acts and awards are deemed to have the effect of res judicata (Hebrew: מעשה בית דין) between the parties, as contemplated by Article 21 of the Arbitration Law. Unless otherwise determined by the Arbitrator, all of the Arbitrator's decisions constituting an award are rulings/judgments/acts that are enforceable and actionable between the parties, allowing (if required or optional by law for confirmation or enforcement) to be submitted to any person, authority, or External Court - for any purpose, including but not limited to confirmation as an External Court act / verdict / judgment.
Finality of Award and Setting Aside: The Arbitrator's award(s) shall be final and binding upon the parties and are not subject to appeal. This provision does not prejudice the parties' non-waivable rights to apply to a competent External Court for the setting aside of the award solely on the grounds stipulated in Section 24 of the Arbitration Law, 1968.
Severability (Blue Pencil Doctrine) and Interpretation: The blue pencil doctrine is in effect. If any clause, requirement, term, condition, or Act (herein: "Item") in this Arbitration Agreement or stemming from it is deemed unlawful or unenforceable by a competent External Court, such Item shall be modified or severed to the minimum extent necessary to render it lawful and enforceable, while preserving the intent and the Arbitrator's powers and authority to the maximum possible extent. This Arbitration Agreement shall otherwise remain in full force and effect. Any language error, including but not limited to grammar, will not invalidate this Arbitration Agreement. Any dispute regarding the interpretation of this Arbitration Agreement shall be brought to the Arbitrator as the sole authority to decide on its meaning, scope, and any other matter pertaining to it.
Arbitrator's Procedural and Evidentiary Authority: The Arbitrator shall have the full authority and the widest discretion to determine all procedural and evidentiary matters for the just, speedy, and cost-effective resolution of the dispute. This authority includes, but is not limited to: determining the scope and timing of pleadings and document discovery; deciding on the admissibility, relevance, materiality, and weight of any evidence, including hearsay or evidence not strictly admissible in an External Court; deciding whether to hold oral hearings or to decide matters based on written submissions alone; and deciding whether to bifurcate the proceedings (e.g., to decide on liability before quantum).
Ex-Parte Interim Relief: The Arbitrator’s power to grant interim relief, as defined in this Arbitration Agreement, includes the authority to grant such relief on an ex-parte basis (in the presence of one party only) where the Arbitrator is satisfied that it is urgently necessary to do so to prevent irreparable harm to the applicant. Any ex-parte order shall be granted for a limited period, and the responding party shall be given an opportunity to be heard on the matter as soon as practicable thereafter.
Arbitrator's General Procedural Authority: In any matter of procedure not specifically addressed in this Arbitration Agreement or by the Arbitrator's prior rulings, the Arbitrator shall have the authority to act in any manner they see fit and is not bound by the rules of procedure or practice of any External Court, provided that the principles of natural justice (including the right of each party to be heard and to present its case) are observed.
Submission of Legal Question (אבעיה) by Head Arbitrator: The Head Arbitrator may, at their discretion, submit any question of law arising in the course of the arbitration (Hebrew: אבעיה) to an External Court for its opinion, in accordance with the provisions of the Arbitration Law, 1968, or to any other authority, organization, person, or entity if deemed helpful for the resolution of the dispute.
Arbitrator's Authority on Jurisdiction (Kompetenz-Kompetenz): The Arbitrator shall have the authority to rule on their own jurisdiction, including any objections with respect to the existence, scope, or validity of this Arbitration Agreement (Kompetenz-Kompetenz). The Arbitrator will also decide on any other topic, decision, or procedural matter not explicitly covered herein or in the Primary Agreement.
Head Arbitrator Initiating Ancillary Matters: The Head Arbitrator may, in special and exceptional circumstances they deem appropriate for the proper resolution of the overall dispute, bring an ancillary or related matter to the attention of the Arbitral Tribunal (or themselves as Sole Arbitrator) for consideration, in addition to matters brought by the parties. Such a matter initiated by the Head Arbitrator may be cancelled if both parties jointly object in writing within 14 calendar days of being notified thereof.
Arbitrator's Investigative Role: The Arbitrator (including the Head Arbitrator if part of an Arbitral Tribunal) may, where deemed necessary for the ascertainment of facts relevant to the dispute and provided the principles of natural justice are observed, take an active role in investigating certain factual matters. This may include posing direct questions to parties or witnesses, requesting specific information or documents, or, subject to the parties' agreement or specific provisions herein, appointing an expert.
Binding Effect on Parties to Agreement: If all parties to a specific dispute are subject to this Arbitration Agreement, the Arbitrator's decisions and awards shall be legally binding upon them in accordance with the terms hereof and the Arbitration Law.
Invitation to Non-Parties If a dispute involves persons or entities not party to this Arbitration Agreement, and the Arbitrator deems their participation necessary or desirable for a complete resolution, the Arbitrator or a party may invite such persons or entities to consent to be joined to the arbitration under the terms of this Arbitration Agreement. No person or entity shall be compelled to arbitrate or be bound by an award unless they have agreed to this Arbitration Agreement.
Arbitration Agreement Change This agreement may change from time to time. The current version is binding unless a verbatim version is referred or attached to the Primary Agreement.
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