A message from the President of the Institute, Prof. Aharon Namdar, and Chairman and Founder Dr. Israel Shimony

The source of the institution of arbitration has been deeply embedded in the Jewish consciousness for thousands of years. In the Book of Exodus, Jethro (Itro in Hebrew), father-in-law of Moses, comes to the desert and sees that: “Moses sat to judge the people, and the people stood about Moses from morning till evening” (Exodus 18:13). Jethro, in surprise, inquires: “What is this that you are doing for the people? Why do you sit alone, and all the people stand about you from morning till evening? ...You and the people with you will wear yourselves out, for the thing is too heavy for you; you are not able to perform it alone.”

Jethro goes on to propose a solution: Instead of Moses judging all of the people alone, Jethro counsels him to “choose able men from all the people, such that fear God, men who are trustworthy … let them judge the people at all times; every great matter they shall bring to you, but any small matter they shall decide themselves; so it will be easier for you, and they will bear the burden with you.” In other words: Jethro established a hierarchical system of courts, in which the lower court would hear minor matters, while the upper court dealt with more complex affairs; thus the great prophet and leader Moses would hear only the most difficult cases, only those questions which a person of his stature alone is capable of resolving.

Jethro understood that there must be a division of labor to relieve the burden from individuals and enable other people to become involved in the case law and in the legal system. Jethro, a man with an external perspective, offered – in current terminology – constructive criticism in order to improve the lot of the people.

The Portion of Jethro is an appropriate reminder of the case burden which Israeli courts bear at present times. The case overload causes many trials to last an excessively long time and the picture is a depressing one, with each judge handling an average of 2,200 cases per year.

It is difficult for a person from within the legal system to gain a realistic grasp of the inherent problems and to clearly identify the prevailing difficulties. It is hard to come up with good and precise criticism that is not subjective. An external, objective eye is needed to see the whole picture and, from that standpoint, understand what is in the best interest of society as a whole.

Arbitration offers an alternative method of out of court dispute settlement. Some 850 applications for arbitration proceedings are filed annually, whereas the courts receive 1,300,000 cases every year. The burden on the court system is heavy, almost impossible. We believe that litigants are reluctant to use arbitration proceedings because these proceedings lack two fundamental legal rights: the duty to give grounds for an arbitration award and the right to appeal.

On November 5, 2008 the Knesset completed the alteration and amendment to the Arbitration Law 5728-1968 and passed the Arbitration Law (Amendment No. 2), 5768-2008. The new amendment integrates two consensual arbitration appeal options and imposes, inter alia, a duty to document arbitration meetings and a duty to give grounds for the arbitration award (the bill was the brainchild of Itro Institute Chairman, Attorney Dr. Israel Shimony ).

As aforesaid, the Amendment to the Arbitration Law enables appeal proceedings by agreement between the parties, as determined already at the stage of entering into the arbitration agreement. The right to appeal the arbitration proceedings will enable the examination and amendment of the arbitration award – if deemed necessary – by means of a professional higher instance. This route of appeal could represent a turning point in applications for arbitration proceedings as an alternative method of resolving disputes, and could also assist the severely overloaded court system with the implementation of extra-judicial mechanisms for the resolution of disputes, such as arbitration and mediation proceedings.

Thanks to the recent amendment, the Arbitration Law now offers a complete out-of-court proceeding and eliminates the need for attempts to appeal the award in the guise of applications to the court for its annulment.

The Amendment to the Arbitration Law renders the institution of arbitration sounder, while at the same time it offers the flexibility of selecting an arbitrator, thus reducing the risk of any miscarriage of justice in the arbitration award and avoiding delay in the implementation of the arbitration award in court.