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Professional Legal Opinion
A New Horizon for Arbitration – Amendment No. 2
On November 5, 2008 the Knesset signed the bill amending the Arbitration Law, "Amendment No.2". This amendment created a mini revolution in alternative dispute resolution. It enables two routes of appeal for the parties involved in an arbitration proceeding, an option that did not exist in arbitration proceedings prior to the amendment of the law.

By Hyim Shechter, Adv*.

This amendment will allow parties to better resolve their disputes outside of a court setting, in a quick and efficient manner held in an informal setting. To date due to an antiquated law, that came directly from the 1889 English Arbitration Act, almost unchanged. There were no routes of appeal, at best the court only in the direst of cases would null and void the arbitrator`s judgment and the sides would be left with their dispute and their only route would be to go back to court to try and settle the issue. This only caused more aggravation, time, and wasted resources. The second amendment to the Arbitration Law, will now allow parties two routes of appeal before another arbitrator/s by agreement and to choose the arbitrator/s that will preside over the appeal. The second route would be before the court by leave of the court. In both instances the arbitrator will have to explain his line of reasoning in regard to his judgment.

The amendment that came into being due to a bill put forward by Attorney Israel Shimony and presented to the the Knesset, by two members of Knesset, Gideon Saar and Amira Dotan, the bill that finally became law will over time create a change in attitude toward alternative dispute resolution outside a court of law, the fact that now the parties will have the ability to appeal the arbitrator`s judgment, will alleviate the courts from the huge burden they now have, to adjudicate thousands of cases every year. Cases that should not have to come before a judge but before an expert in a specific field that has the knowledge and ability to arbitrate or mediate the issue for the disputed parties.

The basis for the public`s dislike of arbitration was based on two main and very logical reasons, a) there did not exist a possibility to appeal the arbitrator`s judgment and b)the arbitrator did not have to give reasons for his judgment in writing. The amendment to the Arbitration Law, 1968, changes the situation 180 degrees. The arbitrator must now give his line of reasoning in writing and the parties should they feel the need to appeal the arbitrators judgment may do so either before another arbitrator or before the court by leave of the court. This now allows the disputed parties to not only to choose the arbitrator of their choice to preside over the preliminary proceeding but also to agree upon and choose the arbitrator that will preside over the appeal should the need arise. All this at the inception of the arbitration agreement, thus the amendment creates a whole new avenue for disputing parties to explore and an alternative to going to court. The fact that one may choose the individual that will preside over the dispute does not exist in a court of law nor does the informal and relaxed atmosphere that arbitration proceedings allow.

Attorney Israel Shimony in his book "Arbitration – A New Horizon", teaches us the necessity of arbitration as well as the various legal aspects along with is importance to the business community. He explains the various judgments given by the courts over the years and highlights them along with the changes that have come along due to the new amendment to the Arbitration Law. The book like the amendment is a revolution in the way we will perceive dispute resolution outside a court of law, it gives us a new perspective and understanding to arbitration.

*Attorney Hyim Shechter has a LL.B. from Tel-Aviv University and a B.A. in International Relations from the Hebrew University in Jerusalem. He is a member of the Israel Bar Association since 1996. He has specialized in commercial and real estate law and has handled real estate and commercial law cases in Israel. Attorney Shechter has provided legal counsel to various commercial companies as well as conducted negotiations and provided expert legal opinions. He is currently Deputy CEO of Itro – The Institute for Consent Arbitration.

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