Israel as a Seat of International Arbitration: A Strategic Advantage for Businesses from the Former Soviet States
In a world in which cross-border transactions are becoming increasingly complex, the choice of a dispute-resolution mechanism is an integral part of conducting business. Companies should ask where any dispute will be heard, who will decide it, in what language, at what cost, within what timeframe, and how readily the outcome can be enforced in the jurisdictions where the parties’ assets are located.
For companies and lawyers from Russia, Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Armenia, Moldova, and other former Soviet states, Israel, and Tel Aviv in particular, offers a distinctive combination of a familiar international legal framework, commercial expertise, procedural flexibility, technological innovation, cultural affinity, and geographical accessibility.
Israel enacted the International Commercial Arbitration Law, 2024, with the aim of establishing a legal framework for the conduct of international commercial arbitrations in accordance with the principles of the UNCITRAL Model Law. In doing so, Israel joined the broad community of arbitral seats operating on the basis of internationally recognised and widely accepted principles.
The Seat of Arbitration
It is important to distinguish between the place where hearings are physically held and the seat of arbitration. The seat determines the procedural law governing the arbitration, the courts authorised to support the proceedings.
Choosing Tel Aviv as the seat does not require every hearing to take place in Israel. The parties and the tribunal may hold procedural conferences, witness hearings, or other sessions elsewhere or by remote means. This allows the parties to benefit from Israel’s legal framework while adapting the practical arrangements to the needs of the parties, counsel, witnesses, and experts.
This distinction is particularly important in disputes in which the parties, evidence, and assets are spread across several jurisdictions. Israel may serve as the legal home of the arbitration even when a substantial part of the proceedings is conducted remotely or outside Israel.
A Familiar International Legal Language
One of Israel’s principal advantages is its adoption of a framework familiar to lawyers practising international arbitration. The Model Law addresses the principal stages of the arbitral process—from the arbitration agreement, through the constitution and jurisdiction of the tribunal and the scope of court intervention, to the recognition and enforcement of the award.
Principles such as party autonomy, the separability of the arbitration clause, the tribunal’s authority to rule on its own jurisdiction, and limited judicial intervention form the shared professional language of international arbitration.
For a lawyer from a former Soviet state, this means that Israel does not present an entirely unfamiliar system. Counsel may draw on international experience, established practices, and the legal literature and case law developed in other Model Law jurisdictions. Israeli law also directs that the statute be interpreted with regard to its international character and the need to promote uniformity in its application.
Practical Neutrality
In a transaction between parties from different jurisdictions, choosing the courts of one party’s home state may be perceived as conferring an unfair advantage. Israel can offer a third forum that is not the national court system of either party. Israel is not a member of the European Union or NATO and is therefore outside the institutional framework of those blocs, including their institutional sanctions regimes.
At a presentation delivered during the Russian International Arbitration Congress, it was emphasised that, from the perspective of Russian parties, Israel may be regarded as a more pragmatic and balanced forum than some of the world’s leading arbitral centers. Israel is an environment in which attention can remain focused on the legal and commercial dispute rather than on political tensions.
Broad Party Autonomy
The Israeli framework gives the parties extensive freedom to design the arbitration around their needs. They may select the arbitral institution, the method of appointing the arbitrators, the language of the proceedings, the substantive law, and the location of hearings.
For example, a company from Kazakhstan and a European company may agree that the seat will be Tel Aviv, the language will be Russian or English, the applicable substantive law will be a foreign law, and the tribunal will include an international lawyer alongside a specialist in energy, infrastructure, construction, or finance.
Arbitration-Supportive Courts and Limited Judicial Intervention
An effective arbitration system requires courts that respect the parties’ choice. Israeli law adopts the principle that the courts should respect the arbitral process and the parties’ intentions, intervening only in circumstances expressly authorised by law.
At the same time, the courts may provide assistance when judicial authority is required. For example, by appointing an arbitrator when the agreed appointment mechanism fails, assisting with the taking of evidence, granting interim relief, and recognising and enforcing awards.
The result is an appropriate balance: the court does not replace the arbitrators or manage the case on their behalf, but provides a supporting framework where powers available only to a state judicial system are required.
The Finality of the Award
Israeli law recognises the principle of competence-competence, under which the arbitral tribunal may rule on its own jurisdiction, including objections concerning the existence or validity of the arbitration agreement. The arbitration clause is treated as a separate agreement, so an allegation that the main contract is invalid does not, in itself, invalidate the arbitration clause.
The grounds for setting aside an award are likewise limited to fundamental defects, such as the absence of a valid arbitration agreement, a denial of the right to be heard, a serious defect in the composition of the tribunal or the conduct of the proceedings, or a conflict with public policy. The courts do not function as an appellate tribunal reviewing the interpretation of the contract, factual findings, or the assessment of evidence.
For businesses, this creates the possibility of obtaining a final determination within a predictable framework, without a prolonged chain of appeals that may delay the resolution of the dispute for years.
International Enforcement
Israel is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Convention is a cornerstone of the international arbitration system and requires contracting states, as a general rule, to recognise arbitration agreements and facilitate the recognition and enforcement of foreign arbitral awards.
For businesses, this is a central advantage: it helps transform a favourable award into an effective remedy by enabling enforcement against assets in relevant jurisdictions.
Geographical and Logistical Accessibility
Tel Aviv lies at the crossroads of Europe, Asia, and the Middle East and is relatively accessible from many former Soviet states. In many cases, direct flights are available, and the time difference with much of the region is limited. This also facilitates the organisation of virtual and hybrid hearings.
Citizens of Russia and several other former Soviet states benefit from visa-exemption arrangements for travel to Israel and are generally required only to obtain an electronic travel authorisation, known as ETA-IL.
Linguistic and Cultural Affinity
Israel probably has the highest proportions of Russian speakers in the world outside the former Soviet Union. It has deep human and cultural ties with the region and is home to a very large Russian-speaking community that includes lawyers, accountants, engineers, experts, translators, and businesspeople. Russian is widely heard in everyday life, in the business community, and among professional service providers.
For parties and counsel from the region, this means access to professionals who understand both the language and the business culture. An arbitration may be conducted in English, Russian, or a combination of the two. Arbitrators and experts may be appointed who are familiar both with international arbitration practice and with the parties’ commercial context.
Technological Innovation and Digital Proceedings
Israel is closely associated with entrepreneurship and technological innovation, and this culture is also reflected in the legal sector. Israeli arbitral institutions and law firms are accustomed to digital case management and to conducting hearings online or in hybrid form.
The ability to conduct a substantial part of the proceedings remotely reduces travel costs, facilitates the participation of witnesses and experts from different countries, and enables more efficient scheduling.
The Israeli Institute of Commercial Arbitration offers digital case management, virtual and hybrid hearings, and linguistic flexibility as part of its international arbitration services.
Multilingual Arbitrators and Sector-Specific Expertise
A further advantage is the ability to appoint arbitrators with multidisciplinary and international experience. In addition to experienced lawyers and arbitrators, the tribunal may include specialists in energy, infrastructure, construction, real estate, technology, finance, and international trade.
The Israeli Institute of Commercial Arbitration maintains a roster of Israeli and international arbitrators, including multilingual professionals with sector-specific expertise. It also offers an “Arbitration by Two” model, combining a senior lawyer with a professional expert. This structure may be particularly effective in disputes that require engineering, accounting, or economic expertise alongside legal adjudication.
Time, Cost, and Flexibility
Compared with high-cost international arbitration centers, Tel Aviv may offer a competitive alternative, while also allowing the parties to choose among in-person, online, and hybrid hearings.
The International Arbitration Rules of the Israeli Institute of Commercial Arbitration are based on flexibility, early case management, and clear timetables. The parties may adapt the procedure to the complexity of the dispute and agree on the use of appropriate professional rules and international standards.
The objective is for the process to serve the business. Time is money, and an efficient arbitration must respect both.
An Experienced Institution Committed to the Region
The Israeli Institute of Commercial Arbitration was established in 1989 under the Federation of Israeli Chambers of Commerce and has operated for nearly four decades. The Institute has accumulated experience through thousands of arbitral awards, none of which has been set aside by a court.
The Institute is working to deepen its relationships with legal and business communities in Russia and other former Soviet states. This effort involves building long-term strategic ties, creating an accessible channel for parties from the region, providing services in the languages most suitable for them, and connecting professionals and arbitral institutions. As part of this strategy, the Institute is pursuing accreditation as an international arbitral institution in Russia and is establishing banking arrangements there.
This approach regards the legal and business communities of the former Soviet states as partners in developing a new forum for the resolution of international disputes.
Trust as the Central Advantage
Ultimately, arbitration is not merely a system of laws and rules. It is built on trust: trust in the arbitrators, trust in the institution administering the proceedings, and trust that the award will be effective.
Tel Aviv combines a Model Law-based legal framework, a supportive judicial system, the possibility of international enforcement, professional expertise, technological infrastructure, cultural affinity with the region, and the flexibility to tailor the proceedings to the parties’ commercial needs.
When drafting an international contract, it is not enough to state in general terms that disputes will be referred to arbitration. The contract should expressly identify the arbitral institution, the seat of arbitration, the language of the proceedings, and the applicable law.
For companies from the former Soviet states seeking an accessible, professional, flexible, and commercially oriented seat, Israel deserves serious consideration. Israel can serve as a bridge between markets, cultures, and legal systems—and as a forum in which international disputes are resolved efficiently, fairly, and with confidence.